Speaker 1: Welcome Attrillians.
Speaker 2: I'm Joel Webber and I'm Eric bell Cheerness.
Speaker 1: We're almost there. It's almost twenty twenty five.
Speaker 3: Yeah, but is it.
Speaker 1: But before we do anything about twenty twenty five, we
Speaker 1: have to do a year in review episode.
Speaker 3: Yeah, especially this year. It was unbelievabe.
Speaker 2: Up, this is the most interesting, exciting, best year ever
Speaker 2: for ETFs. I'm just saying that right now.
Speaker 3: There's never been a better year ever. Twenty twenty one
Speaker 3: was right up there. This was better.
Speaker 2: This is remember that movie as good as it gets. Yeah,
Speaker 2: this is as good as it gets. So everybody, just
Speaker 2: take a deep breath, savor it.
Speaker 3: It just can't be this good every year.
Speaker 1: Okay, that makes me really worried about twenty twenty five,
Speaker 1: but right now maybe feeling Okay.
Speaker 2: Listen, the key to life is to enjoy the good
Speaker 2: times and don't have your mind somewhere else.
Speaker 1: Okay, all right, live in the moment. I like it.
Speaker 1: So to help us process the moments that made up
Speaker 1: the year, we're going to be joined by Vildona Hirich
Speaker 1: of Bloomberg News. She's a cross asset reporter, also a
Speaker 1: frequent guest on Trillians. Todd Rosenbluth, an ETF analyst at Vetify,
Speaker 1: also a frequent guest on Trains and rounding out our panel,
Speaker 1: Athanasio ser Vegas, an analyst with Eric at Bloomberg Intelligence,
Speaker 1: this time on Trillions a Year to Remember Dona Todd, Athan,
Speaker 1: Welcome back to Trillians. Nice to see you, Thanks for
Speaker 1: having us.
Speaker 4: It's great to be back.
Speaker 1: All right, Well, we've got a format for this round robin.
Speaker 1: We're gonna go around. We're gonna hear everybody suggest a
Speaker 1: theme that they want to talk about that they think
Speaker 1: distinguishes this year. Athan, you're in London right now. Good
Speaker 1: to see you on our screen. Talk to us about
Speaker 1: what is your number one theme for the year.
Speaker 5: Oh, it's I guess the most obvious, but probably the
Speaker 5: most important, and that's just record flows US past the
Speaker 5: trillion and inflows. I think we just have to appreciate
Speaker 5: that number, right, Like when you say a trillion in
Speaker 5: inflows this year, I think it was like high nine
Speaker 5: hundreds and twenty twenty one. Obviously we had the market
Speaker 5: participated in that, but what I thought was even more fascinating. Yeah,
Speaker 5: so trillion in the US, but every region hit a
Speaker 5: record this year. Europe Canada, Asia Pacific. So it's just
Speaker 5: this amazing. What I love about the ETF is that
Speaker 5: it's just hitting all over the world. It's like transcending geography.
Speaker 5: So that I think was by far the most Probably
Speaker 5: the biggest thing to take away from this is that's
Speaker 5: just been a record all over the world.
Speaker 2: And let me add to that with some numbers. Eight
Speaker 2: and I agree, that's the story of the year. The
Speaker 2: record was nine hundred and ten billion, give a ticket
Speaker 2: called a billion depending on what data service you ask,
Speaker 2: So a trillion is ninety you know, almost ten percent
Speaker 2: over the record obviously, but here's also something interesting. If
Speaker 2: you look globally, as Athan was alluding to, the assets
Speaker 2: went from at eleven trillion to fifteen trillion. That is
Speaker 2: a thirty two percent growth rate for an industry that's
Speaker 2: thirty plus years old. Now, the growth rate when ETF
Speaker 2: started out was twenty five percent because it was small
Speaker 2: assets easy to grow those numbers when you're small. The
Speaker 2: next decade was seventeen percent, and so we're predicting ten
Speaker 2: percent a year going forward to get to thirty five
Speaker 2: trillion in twenty thirty five. Well, thirty two percent is
Speaker 2: so beyond what I would ever assume now of that
Speaker 2: thirty two percent number, about four tenths is from the flows,
Speaker 2: six tenths is from the market, So the market won't
Speaker 2: be this good. As I said, this is as good
Speaker 2: as it gets probably, but the flows, being that big
Speaker 2: of a contributor, is really strong. That thirty two percent
Speaker 2: number again astonishing if you had asked me again. We
Speaker 2: predict ten percent a year going forward, so thirty two
Speaker 2: is ridiculous.
Speaker 5: If there's something can add to that too, just at
Speaker 5: the issuer level, right, Yeah, while it's a record for
Speaker 5: the whole industry, it's not just Black Rock and Vanguard,
Speaker 5: but like seventy percent of the firms have had their
Speaker 5: best year ever this year, so it's the breath is
Speaker 5: winding out. So you have several issuers all hitting records
Speaker 5: this year, which I thought was also really impressive.
Speaker 2: And do you want to know, I'm gonna I'm it's
Speaker 2: gonna quiz you guys, what percentage of ETFs in the US.
Speaker 2: There's thirty eight hundred, what percent saw inflows this year?
Speaker 2: Get it between five percent and I'll give you a prize.
Speaker 2: I'll go with eighty seventy five sixty six, So you
Speaker 2: don't get the prize, but I was the prize, one
Speaker 2: of the one of those gold coins that Todd brought
Speaker 2: I was gonna give you.
Speaker 3: We haven't even had a chance to introduce what I
Speaker 3: brought it.
Speaker 1: Todd. I noticed that you brought some gold coins, chocolate
Speaker 1: gold coins, trying to sway favor.
Speaker 4: Listen, I don't think there's a judge and jury on this.
Speaker 4: The audience is going to decide which of us does
Speaker 4: the best job.
Speaker 1: I'm gonna sample your the chocolate you should.
Speaker 4: So this is an early Honkka present for those that
Speaker 4: can't see this very visual podcast. I have a basket
Speaker 4: of delt chocolate covered coins.
Speaker 1: You talked about everything as baskets when you're in the
Speaker 1: ATF world. This is just a little bag of chocolate.
Speaker 3: It is when it's closed up, it is a basket.
Speaker 1: Okay.
Speaker 3: Is that Is that a store of value? It is?
Speaker 3: It is.
Speaker 1: There's tangible diminishing because I'm eating the chocolate.
Speaker 4: There is tangibility behind this. But I would note these
Speaker 4: come from Trader Joe's not a sponsor, I don't think.
Speaker 4: But they're called coins of the world because we are
Speaker 4: taking it.
Speaker 1: Okay, Todd, let's do you next, what's your your theme
Speaker 1: of the year.
Speaker 4: Well, mine piggybacking on what Athan said, but it's VU
Speaker 4: crossing the one hundred billion dollar marked with assets for
Speaker 4: or inflows for one individual ETF and IVV, which actually
Speaker 4: got passed by VU in terms of total assets briefly
Speaker 4: had sixty billion dollars. That would have been a new
Speaker 4: record on its own if it wasn't for Vanguard five
Speaker 4: hundred ETF. So those two ETFs just setting a record
Speaker 4: is tremendous, is a great sign. Most investors probably start
Speaker 4: their their ETF journey with a core S and P
Speaker 4: five hundred based products, so that I think that sets
Speaker 4: the stage for the next thirty plus years for people
Speaker 4: who are going to add additional products. So one hundred
Speaker 4: billion dollars sixty billion dollars, that's amazing.
Speaker 3: Think about that.
Speaker 2: That's two billion dollars a week into one fund. Two
Speaker 2: billion for a firm after five years.
Speaker 3: On the market. Is good.
Speaker 2: So Vanguard again, we just get so bored of Vanguard,
Speaker 2: we get numb to it. But the numbers they put
Speaker 2: down are still just absolutely astonishing. Vanguard as a whole
Speaker 2: company is taking in a billion a day into their ETFs,
Speaker 2: VU at one hundred. Again, that's doubling a record. I
Speaker 2: had the meme of Wilt Chamberlain hold up that one hundred,
Speaker 2: which to me, this is as hard to think this
Speaker 2: will get broken, you know, like Wilt Chamberlain's record. The
Speaker 2: only ETF I could see doing it is VU again,
Speaker 2: but absolutely extraordinary. And it reminds us that as much
Speaker 2: as we give attention to this sort of hot sauce,
Speaker 2: shiny objects stuff, some of us most tooche no names, yeah, Eric,
Speaker 2: the bulk of the blob of money still goes to
Speaker 2: cheap beta que beta is.
Speaker 1: What is the margin between VU and the runner up
Speaker 1: and it's runner up?
Speaker 4: Well, it's current runner up right now is IVV, which
Speaker 4: is roughly sixty billion dollars.
Speaker 2: Now it's fifty four, okay, so it's fifty billion dollars.
Speaker 3: It's double the number two basically, I mean that's it's insane.
Speaker 1: Yeah.
Speaker 2: Why well, mostly because Vanguard's brand for fifty years has
Speaker 2: been cheap, so they have this strong brand, trusted brand.
Speaker 2: They're a boy scout in an industry that's seen a
Speaker 2: lot of corruption. Number two, it's dirt cheap. Three basis
Speaker 2: points for the entire SMP the S and P kicks
Speaker 2: so much butt and to get that for like basically
Speaker 2: no fee and the frictionlessness of it. You just click
Speaker 2: a button. You own the entire us capitalism in one shot.
Speaker 2: That's why I'm so bo bearish on this direct indexing
Speaker 2: and tokenization that it's the best, that's the deal of
Speaker 2: the century. You're not going to disrupt that.
Speaker 3: For a while.
Speaker 4: But to me again, I got a reporter on an
Speaker 4: editor in the room. To me, the story is in
Speaker 4: VU over IVV by doubling. It's that both of them
Speaker 4: crossed the fifty billion dollar mark.
Speaker 3: So that's it. It's been a success.
Speaker 1: I'm going tension todd like, you know, let's talk about tension.
Speaker 3: That's a little too kumbaya. I'm with you.
Speaker 1: Where's where was Spy on that list?
Speaker 2: By the way, Well, okay, so Spy has these big
Speaker 2: decembers because it taxles Harving. So it's rising quickly. It's
Speaker 2: number five with thirty billion, but by the end of
Speaker 2: the month it could be fifty sixty. It's possible. It's
Speaker 2: VU Spy IVV all above the last year's record. I
Speaker 2: called them three amigos because they're like always they're like
Speaker 2: the three that are tracking the S and P. But
Speaker 2: I could see that, but then SPY would lose some
Speaker 2: of that in the first quarter because it tax has
Speaker 2: harvest thing. But okay, but by the way, one thing
Speaker 2: to watch next year, VU and IVV, probably both around
Speaker 2: the same time, are going to pass by then it's
Speaker 2: like which one of those two will be the new king.
Speaker 2: I think VU separates itself in the year after that,
Speaker 2: So I think two years from now we're having VU as.
Speaker 3: The the undisputed king.
Speaker 1: That'll be a big moment.
Speaker 3: Black Rock's not gonna let that happen easily though.
Speaker 1: Yeah, okay, tensin fil done well.
Speaker 6: I was going to add to this, you know, list
Speaker 6: of great things for ETFs overall, which is that there
Speaker 6: were five hundred and thirty nine active ETF launches, which
Speaker 6: is eighty percent of the overall and it was a
Speaker 6: year of record launches, right, so active, It was a
Speaker 6: big year for active.
Speaker 3: Is that your stat because no, it's not. It should be.
Speaker 3: I was you should use that.
Speaker 6: I have some really good other stats.
Speaker 2: Okay, well, yeah, how about that'll be mine. Six hundred
Speaker 2: and sixty launches. That's record launches, Joel eighty percent of
Speaker 2: them active. The reason launches matter, and it's part of
Speaker 2: our support for the thirty five trillion prediction, is that
Speaker 2: the more launches you have, the more good ideas you have.
Speaker 2: If everybody is here launching products, one of those or
Speaker 2: two of those is going to be the next big idea.
Speaker 2: So the innovation factor is at a record pace. And
Speaker 2: this year we have an interesting group of big names
Speaker 2: coming in. You know, Phil Back said ETFs go Hollywood.
Speaker 3: I agree.
Speaker 2: We had Noriel Rubini launch a ETF, Tom Lee Rick
Speaker 2: Reader late in twenty three but close enough, Jeremy Grantham,
Speaker 2: and this Treasury Secretary Scott the Scent is supposed to
Speaker 2: have an ETF coming out, but he might withdraw because
Speaker 2: he's Treasury secretary, but he was going to launch one.
Speaker 2: And I think we could see Bill Ackman at some
Speaker 2: point launch one.
Speaker 3: Here's the deal.
Speaker 2: You know, there was a quote in the nineties Michael
Speaker 2: Jordan was asked about like Utah and this other team. Oh,
Speaker 2: you're scared it UTA. He's like, look, you could hype
Speaker 2: them up. Still got to come through Chicago. Still got
Speaker 2: to come through Chicago. If you want a ring badass, right,
Speaker 2: that's ETFs. You want the assets you want, flows you want,
Speaker 2: customers got to come through ETFs, still got to come
Speaker 2: through ETF. So everyone's going to have to come through
Speaker 2: ETFs for the most part, minus maybe some hedge funds
Speaker 2: or private equity if they want to be where the
Speaker 2: people are.
Speaker 4: When you said big names, I thought you were talking
Speaker 4: about acid managers, I mean those big individual names. But MFS,
Speaker 4: which launched the first mutual fund ever, or has the
Speaker 4: oldest mutual fund entered the ETF marketplace a week or
Speaker 4: so ago, oak Mark, which is a proven manager, so
Speaker 4: it's hard to count. In fact, I'm not sure I
Speaker 4: can even name an active manager that doesn't have in
Speaker 4: the ETF presence, either directly or from a subadvisories.
Speaker 6: I can name one Ron Baron, and they're thinking about it.
Speaker 4: Well about time.
Speaker 6: Yeah that's a fifty fifty some billion matager.
Speaker 4: You know, you earn yourself a gold coin, Thank you
Speaker 4: so much.
Speaker 2: MFS interesting because they launched the first ever mutual fund
Speaker 2: back in like nineteen twenty three or something. So for
Speaker 2: them to finally, you know, come in is I think.
Speaker 2: I think everybody is pretty much surrendered at this point.
Speaker 2: There's a couple hold out's no doubt, but Morgan Stanley
Speaker 2: to me was the big one.
Speaker 3: That was last year.
Speaker 1: All right, Vildan, if that was your your that was
Speaker 1: my extra nonstat stat bring the hammer. Let's hear the
Speaker 1: real one.
Speaker 6: Okay. So it was a really big gear for levered
Speaker 6: single stock ETFs. I can't believe they haven't come up yet.
Speaker 6: This is the hot sauce or the super spicy hot sauce,
Speaker 6: the Ghost Pepper hot sauce.
Speaker 3: Right, well, they're all flavors.
Speaker 2: The Ghost Pepper is the two X micro strategy because
Speaker 2: that broke the volatility record. It's the two x micro strategy.
Speaker 2: JROL has a volatility of run.
Speaker 3: Three hundred percent.
Speaker 2: That's a rolling twenty year t QQQ, which is triple leverage.
Speaker 2: QUES is a fifth of that, so it's five times
Speaker 2: more volatile than three xq's think about.
Speaker 1: That's the Ghost Pepper's like a new strain of ghost.
Speaker 6: Well, to step back, there's two of them, right, there's
Speaker 6: two of them. There's there's one from Defiance, there's one
Speaker 6: from Tuttle and Rex Chairs and they were so big
Speaker 6: that they were growing by billions in like days basically,
Speaker 6: where at one point I think Tuttle's was over three
Speaker 6: point five billion dollars, and that was partly because micro
Speaker 6: Strategy going up so much post election, but also people
Speaker 6: are adding tons of money. But then overall for levered
Speaker 6: single stock ETFs, we had forty five new launches, which
Speaker 6: is a record, although they've only really been in the
Speaker 6: US market for a couple of years, but forty five
Speaker 6: new ones. Now we're starting to see fee wars there
Speaker 6: as well.
Speaker 3: That's crazy.
Speaker 6: So it's really it's just I think that was one
Speaker 6: of the really big stories of the year.
Speaker 2: At the beginning of this year, single stock lever gtfs
Speaker 2: had one billion dollars one point three they have twenty
Speaker 2: now and like an NVDL two x, Navidia's six billion,
Speaker 2: that's will ryan from granite shares. That generates like fifty
Speaker 2: million a year in revenue for them because these all
Speaker 2: charge one percent, so these are lottery tickets for the issuers.
Speaker 2: And not only that, Let's say you get a little
Speaker 2: bit of flows like I don't know, one hundred million,
Speaker 2: and you're in a stock like Navidia or micro Strategy
Speaker 2: two x, the asset accumulation starts to grow even if
Speaker 2: you get no new flows. So the fact that the
Speaker 2: stocks are going up a lot. These managers are getting
Speaker 2: paid even with no new customers. It's it's really gonna
Speaker 2: draw a lot more uh competition. Now we got uh part.
Speaker 2: The guy was gonna call them parlay shares, whereas you go,
Speaker 2: you get two x coin plus.
Speaker 3: Two x Navidia, two x m M micro.
Speaker 2: Strategy plus two x u Tesla, so you could like
Speaker 2: match these up. And then they have ones that battle
Speaker 2: each other, so they got battle shares and like parlay shares,
Speaker 2: it's gonna get crazy.
Speaker 3: Cotrol.
Speaker 6: This is going to yeah when they launch.
Speaker 2: I know from a guy who likes the GARP. The
Speaker 2: garb bts you both, you guys, listen and tom this is.
Speaker 4: Look, there's a reason one hundred billion dollars went into
Speaker 4: one ETF because people like simple, low cost boring.
Speaker 3: That's why we.
Speaker 2: See in the team sometimes it's no industry for old
Speaker 2: analysts droll, Tod and tom Athan. They're they got like
Speaker 2: they like the large cap growth at a reasonable price stuff.
Speaker 2: They this is all like crazy to them.
Speaker 3: And I understand that.
Speaker 2: That said, I think a lot of this is a
Speaker 2: result of the boringness of people's core. The more you
Speaker 2: just marry passive and you're like, oh, I'll just wait
Speaker 2: thirty years. The more you're like, all right, well, I
Speaker 2: don't want to sit there and watch paint try for
Speaker 2: thirty years. I want to have a little fun. We'm
Speaker 2: not going to mess around with some you know, large
Speaker 2: cat manager because I already owned those stocks. I want
Speaker 2: something really crazy, something to get my juices flowing. And
Speaker 2: that's why I think hot Sauce is an ironic byproduct
Speaker 2: of the rise of boring passive.
Speaker 1: Build on it. When you take away micro Strategy and Nvidio,
Speaker 1: what was the next single stock etf that Tesla?
Speaker 6: Definitely, Well, you want something the.
Speaker 1: Whole suite, right, It's just like anything that can pop.
Speaker 6: That moves a lot, Yes, which is why it was
Speaker 6: so interesting that somebody filed. Actually I think two issuers
Speaker 6: filed for Berkshire Hathway, which barely moves, but they filed
Speaker 6: for two x h.
Speaker 1: Does that make it more fun?
Speaker 6: No, it makes it way less fun. So you know,
Speaker 6: the question is who if you're wanting the adrenaline, do
Speaker 6: you really want to go for something to moose point five?
Speaker 1: Yeah?
Speaker 2: And also two x micro Strategy in a way is
Speaker 2: four x Bitcoin, so they which you can't do because
Speaker 2: micro strategy is two x bitcoin.
Speaker 3: These are two x that.
Speaker 2: So that's why I also think people are trading it
Speaker 2: because there's two x bitcoin ets, But why do two
Speaker 2: x when you can do four? And I'll go to
Speaker 2: Ethan on this, They've got three x micro strategy. In Europe,
Speaker 2: They've got crazier stuff there, but nobody cares.
Speaker 5: Right, Yeah, it's just that they don't have that sort
Speaker 5: of gambling culture that they have in They.
Speaker 4: They don't like potentially losing money.
Speaker 3: There's not many Degen products there.
Speaker 5: There's by the way, five x Nasdaq here that no
Speaker 5: would They've been around for years with no as.
Speaker 3: If that was here, it'd be a jillion dollars.
Speaker 1: Could you imagine five x Nasdaq? I was salivating.
Speaker 2: I was touring around Switzerland this year and like Europe
Speaker 2: and stuff, and when I went over the hot Sauce part,
Speaker 2: I was like, so, like, you know, you know how
Speaker 2: you guys like have like a sports gambling account and
Speaker 2: like nothing.
Speaker 3: I'd see like one young dude maybe.
Speaker 2: Smile and I was like, all right, maybe you that's it,
Speaker 2: but like there was no, it did not resonate there.
Speaker 3: People are not into that.
Speaker 6: Speaking of the crypto stuff. This is also part of
Speaker 6: this you know, biggest stories of the year. Eric and
Speaker 6: James were named coin Desk's Crypto People of the Year,
Speaker 6: James James Seffert from from Blooming Intelligence and it's just you.
Speaker 2: Know a moment I think, so, yeah, they made you know,
Speaker 2: those penguin NFTs. They made a penguin n FT of
Speaker 2: my face that was kind of cool.
Speaker 6: But did you buy it?
Speaker 3: I mean they called us the etf Bros. And I
Speaker 3: like that.
Speaker 2: I've enjoyed my time there. It's an interesting crowd. Like
Speaker 2: I said, I'm a true Bogel head, so I can't
Speaker 2: go fully into it, but it's a little you know,
Speaker 2: there's it's a controversial area still, it's not something that's
Speaker 2: fully accepted everywhere. But for the most part, I think
Speaker 2: what was interesting about this year. I was going to
Speaker 2: bring up a bitcoin but is just the Larry Fink Fidelity.
Speaker 2: You know, these are people who have a lot of
Speaker 2: trust and credibility and for them to get behind this
Speaker 2: with products on their name is it definitely has brought
Speaker 2: it more mainstream and made it more acceptable and exciting
Speaker 2: for me and James to be part of that. But
Speaker 2: I'd say a year ago. It was still kind of
Speaker 2: getting rid of that SBF stench.
Speaker 6: I mentioned it because the bitcoin ETFs were huge, really
Speaker 6: so huge. I bit the I shares one it had
Speaker 6: it got over fifty billion.
Speaker 3: Right, yeah, that's an info.
Speaker 6: It's a crazy.
Speaker 1: Less than a year.
Speaker 3: Actually, yeah, let me drop a number on this. I'm
Speaker 3: gonna blow your mind.
Speaker 2: Fifty billion dollars in two hundred and twenty one days
Speaker 2: on the market. The next fastest ETF to fifty billion
Speaker 2: dollars was thirteen hundred and twenty nine days, so one
Speaker 2: year versus four years, and that was I E MG.
Speaker 2: The other thing that's interesting is if you have any
Speaker 2: given year of ETFs, if your ETF gets one percent
Speaker 2: of what ibit get got, which is five hundred million,
Speaker 2: you would probably be in the top twenty most successful
Speaker 2: launches of the year.
Speaker 4: Right yeah, I mean, let's just look at I'm assuming,
Speaker 4: first of all, this was your second story.
Speaker 6: No, I still have a really good one coming out.
Speaker 3: This one.
Speaker 1: We'll call this the interlude.
Speaker 3: We'll call this stealing thunder.
Speaker 1: Yeah, interlude.
Speaker 4: But the seventh largest bitcoin ETF, which is coin shares
Speaker 4: pulled in, has nine hundred and thirty million dollars. The
Speaker 4: eighth largest one from in Vesco. BTCo has nine hundred million,
Speaker 4: the ninth largest Franklin eight hundred million. Everybody, everybody had success.
Speaker 4: This was when you guys talked about it as being
Speaker 4: a race. It has been a race, but coming in
Speaker 4: ninth place has still been a success for the firm.
Speaker 2: Yeah, that was something some people there was. There was
Speaker 2: the haters that were like, never get approved. Then they
Speaker 2: were like, well but there'll be no demand. Then they're like,
Speaker 2: well but some of these are gonna liquidate. There's not
Speaker 2: enough demand. Now they moved on to all kinds of
Speaker 2: other stuff. But now it's not the right people, it's
Speaker 2: it's they just keep moving the goalpost. If you if
Speaker 2: you hate this area, you're just going to find ways
Speaker 2: to hate. That's fine. I think the numbers speak for themselves.
Speaker 2: You can see them getting quieter and quieter. I don't
Speaker 2: know where all this goals, Joel, but we do think
Speaker 2: that the bitcoin etifs are probably going to pass gold
Speaker 2: ETFs and assets because they do act as a store
Speaker 2: of value, yet they also have that hot sauce quality
Speaker 2: that gold doesn't.
Speaker 1: When does that happen?
Speaker 2: So right now, the in the US. Those ETFs have
Speaker 2: one hundred and ten billion, and goldietfs have one twenty
Speaker 2: eight so they're only eighteen billion dollars back.
Speaker 3: I thought it would take three or four years for
Speaker 3: them to it's tricking.
Speaker 2: Next year it is, it's it might be. I mean,
Speaker 2: at this rate, every day it's like something new happens.
Speaker 3: It's good news.
Speaker 2: Look, who knows this is? This is very volatile, unknown stuff.
Speaker 2: But I do think that the ETFs brought low cost liquidity,
Speaker 2: no friction, and again they brought cover air cover for
Speaker 2: the advisors out there who are like, well, Larry Finx
Speaker 2: is okay, it's okay, all right.
Speaker 1: Bil Donna, what's your official number two?
Speaker 6: Okay, my official number two? Well, I was going to say,
Speaker 6: and we forgot to mention. We keep forgetting because no, no,
Speaker 6: there's just no my number two is coming up. But
Speaker 6: we we didn't even say Bitcoin crossed over one hundred thousand,
Speaker 6: which is what's helped these ETOs.
Speaker 1: But Trump too, yes, but Trump held yeah, of course.
Speaker 6: But but I don't.
Speaker 1: Think any of that would have happened had that ETFs
Speaker 1: not happened earlier in the year, like laid this foundation
Speaker 1: for you know, permission, basically just a.
Speaker 6: String of really astonishing numbers and records and anyway my
Speaker 6: number two. Yeah for real, I was trying to come
Speaker 6: up with a topic that I was hoping none of
Speaker 6: you would would come up with. Yeah, we had so
Speaker 6: many executive changes at issuers this year. We had Vanguard
Speaker 6: has a new CEO. H State treat has an Apoglia.
Speaker 6: She's their executive business officer. I think chief business officer
Speaker 6: Brian Lake moved to Goldman from JP Morgan. We had
Speaker 6: huge each turnover so global X. The list goes on.
Speaker 6: It's just lots of changes happening some because some of
Speaker 6: these companies are trying to be even more innovative, even
Speaker 6: more involved, put out even more ETFs and new products.
Speaker 6: So just trying to change our perspective a little bit
Speaker 6: from just the record numbers.
Speaker 1: Like I like the attempt.
Speaker 4: Well, I think it's great because first of all, those
Speaker 4: are all proven people that have taken their talents and
Speaker 4: gone someplace else and likely can see the success. But
Speaker 4: then people are getting moved up within within those respective firms.
Speaker 4: So Invesco is Brian Hartigan that's taking on an additional role.
Speaker 4: I couldn'tame each person, but we've seen Travis Spence at
Speaker 4: JP Morgan again fresh perspectives.
Speaker 1: All right, Vell Donna, that was a good one, a
Speaker 1: slightly different note than usual, and I appreciate that. We'll
Speaker 1: distinguish it from you know, Athanasias. He only talks about
Speaker 1: inflows all the time. Todd, what's your number two?
Speaker 3: Yeah? He first the everygonality on that.
Speaker 4: Well, you set me up to now I can't talk
Speaker 4: about inflows, but yet I still will.
Speaker 1: Okay, So take a little heat off of even there.
Speaker 4: Vil Donna's interlude number one was about active launches. I'm
Speaker 4: going to just talk about active fixed income flows because
Speaker 4: I obviously we've had success and Eric can fall asleep.
Speaker 4: But one hundred billion dollars, one hundred billion dollars went
Speaker 4: into active fixed income ETFs. J Triple A, which is
Speaker 4: a COLO ETF from Janis Henderson, which was relatively late
Speaker 4: entrant into the ETF marketplace. We had Fidelity with FBND
Speaker 4: with over ten billion dollars. We saw Capitol Group what's
Speaker 4: it all about?
Speaker 1: Like? Why?
Speaker 4: So we've seen investors long embrace active management within fixed income.
Speaker 4: We have the FED that finally started cutting rates and
Speaker 4: then now perhaps might be on pause by the time
Speaker 4: people hear this because we're recording this before the FED
Speaker 4: does its meeting, and they've been embracing ETFs, and that's
Speaker 4: just the marriage of those two things plus such proven
Speaker 4: asset managers that are now in this space. So advisors
Speaker 4: are turning to active fixed income ETFs. I think that's
Speaker 4: just a great opportunity for the experts to help the
Speaker 4: investors and the advisors.
Speaker 2: Yeah, it's it's not necessarily new, but sure. I mean
Speaker 2: the bond ETFs I think took all that twenty percent more.
Speaker 2: They had a record too, and bonds haven't done that
Speaker 2: well this year. They were kind of met, you know,
Speaker 2: compared to stocks. So for them to have a record
Speaker 2: that's twenty percent above the old record is pretty good
Speaker 2: sign when you're not crushing it. JAAA is is a
Speaker 2: that really did have a good year. But like AG
Speaker 2: and B and D, what do they have three percent
Speaker 2: this year or something like, But they took in thirteen
Speaker 2: percent of all the flows. People love that AG core,
Speaker 2: you know.
Speaker 4: But people also love trying to beat the AG. So
Speaker 4: one hundred billion dollars for active fixed income ETFs is
Speaker 4: a great milestone. Is a sign that we're going to
Speaker 4: see even more success.
Speaker 2: Absolutely, and I think you'll see more managers come in
Speaker 2: as well. They seems to be a slight the bond
Speaker 2: managers get a little more love than stock pickers pound
Speaker 2: for pound.
Speaker 1: I feel like, all right, Ethan, bring us home, what's
Speaker 1: your what's your your last theme of the year.
Speaker 5: Let's talk about flows again. Okay, I don't have an
Speaker 5: actual stat but you know, we've been covering this a while,
Speaker 5: and what I thought was really interesting about this year.
Speaker 5: Whether or not they launched this year, it's it's not
Speaker 5: really The point is that there was a lot of
Speaker 5: categories that came into the spotlight this year. So for example,
Speaker 5: obviously bitcoin that was one buffer ETFs, yield max ETFs,
Speaker 5: single stock ETFs, So I can't remember.
Speaker 1: One credit credit.
Speaker 5: Credit another one that was like talked about a lot.
Speaker 5: I can't remember, Like normally this would happened like one
Speaker 5: in like once a year like something like that. But
Speaker 5: to have all these simultaneously come up in the same year,
Speaker 5: I thought was really interesting. So Steff, we had been
Speaker 5: really exciting to cover because you have all these categories
Speaker 5: that were born this year, buffers to another one like
Speaker 5: they've been around for a while, but they really like
Speaker 5: insurging an inflow.
Speaker 1: So that's really a stude observation, Like I think we
Speaker 1: talk about all of those things sort of an isolation.
Speaker 1: When we step back and have a year in review episode,
Speaker 1: it's a good moment to be like, wow, look at
Speaker 1: all of those things in tandem.
Speaker 3: So yours truly tried to thread all that together. And
Speaker 3: here's what I came up with.
Speaker 2: The ETF industry has gone from providing beta into solving
Speaker 2: problems and even further changing your mood. So I almost
Speaker 2: equate a little pharma action here because whether you're a
Speaker 2: worried boomer buffers or a bored millennial gen zer, single
Speaker 2: stock leveraged, they're providing things that are going to change
Speaker 2: your feelings. So we think that, you know, the new
Speaker 2: white space is your mind.
Speaker 1: That's deep.
Speaker 3: Yeah you like that. Yeah, it's a work in progress.
Speaker 3: I got to fine tune in a little.
Speaker 4: Bit PSYCHEDELOGYTF that was out there. That's in Canada, right.
Speaker 3: No, there's still one here.
Speaker 2: But the point being is, but the reason what Ethan
Speaker 2: just said is interesting too. Besides bitcoin, they're pretty cheap.
Speaker 3: I'm gonna move those aside.
Speaker 2: That's like a whole new asset class, but the buffers
Speaker 2: and the single stocks in particular, they all charge ninety
Speaker 2: to one hundred basis points. So for people to come
Speaker 2: in and out of nowhere, create a category in the
Speaker 2: Vanguardian era that can charge that much.
Speaker 3: You gotta study that.
Speaker 2: Because we write to our clients a lot who are
Speaker 2: in this industry like, hey, this is what worked and why,
Speaker 2: and that's why we're like, maybe don't think about what
Speaker 2: asset class you can cover, but maybe think about what
Speaker 2: problem you can solve or what mood you can change.
Speaker 1: Hmmm, twenty twenty five, be talking about moods some more.
Speaker 2: An you think, yeah, okay, can I give my last one?
Speaker 3: You guys hit on a little.
Speaker 1: Bit the final interlude, final countdown?
Speaker 2: Yeah, mind flicks forward too. Well, there's I'll do a
Speaker 2: quick too, fir.
Speaker 3: Because I want to hear both your all your comments
Speaker 3: on this. First is what he said. Private credit file.
Speaker 2: Every year there is one filing or two filings that
Speaker 2: are earthquake level, and this year it.
Speaker 3: Was the Spider Apollo private credit filing.
Speaker 2: There was a couple other Colo private credits, but those
Speaker 2: are just investing in colos that happen to have private
Speaker 2: credit in it. The Apollo one is interesting because it's
Speaker 2: direct private credit and Apollo is part of it. They're massive.
Speaker 2: The bridging of the gap between that world and the
Speaker 2: public is major. The CEO of Apollo really wants to
Speaker 2: do this. It's going to be a baby step. But
Speaker 2: if they can pull this off and figure out how
Speaker 2: to make something ill liquid liquid with Apollo's help, man,
Speaker 2: this is a big deal. This could really disrupt a lot.
Speaker 2: The private funds market is like fourteen trillion dollars. It's
Speaker 2: bigger than ETFs M. That is going to get interesting.
Speaker 1: Well, I think.
Speaker 4: I think it also did spur so the products that
Speaker 4: we now have in the marketplace bomb blocks having one
Speaker 4: of them. I think there was a race to get
Speaker 4: that to the market ahead of the State Street Apollo
Speaker 4: to ride that tell wind that the market isn't The
Speaker 4: ETF industry in the market is now focused on getting
Speaker 4: private credit within the ETF space.
Speaker 3: I don't blame them. They they did the right thing.
Speaker 2: They moved it out. It's just not quite the same.
Speaker 2: It reminds me the bitcoin futures ETFs versus Bitcoin spot.
Speaker 2: You know, to have colo private credit, I don't know.
Speaker 2: You know how ETF does they want it the real deal.
Speaker 2: They want the stuff that they want, the real party
Speaker 2: behind the party.
Speaker 4: Well, let's see if the real party actually happens. Let's
Speaker 4: see if yeah, we get if.
Speaker 1: What do you what do you think? Well, what do
Speaker 1: you think the odds are?
Speaker 2: Oh?
Speaker 4: I think the I think it'll come to market. I
Speaker 4: think I think Stage Street and the POLA want to
Speaker 4: have it come to market. I think it's a focus
Speaker 4: for them. Will it be Will it be as liquid
Speaker 4: as we hope it will be? Taking an a liquid
Speaker 4: asset and making liquid. I'm hopeful that that's the case.
Speaker 2: But one thing on this, let's say the private equity
Speaker 2: or the private credit part isn't that liquid and the
Speaker 2: fund overall is semi liquid.
Speaker 3: We've seen cases.
Speaker 2: Of ETF like the Japan ETF is I liquid every
Speaker 2: day because the stocks don't trade in COVID. The high
Speaker 2: yield communit ETF HYD traded at a twenty nine percent
Speaker 2: discount since then taken in money and has had plenty
Speaker 2: of volume. Like nobody cares. I think people trust the
Speaker 2: ETF price and the industry, and so I think even
Speaker 2: if there is like a gap between the supposed nav
Speaker 2: and the price, I think ETF investor would rather have
Speaker 2: that discounted perceive discount than go into like an interval
Speaker 2: fund or some other form that's not quite as familiar
Speaker 2: and comfortable to them as the ETF.
Speaker 3: I think so too.
Speaker 4: I just think it's going to require education, and it's
Speaker 4: going to we might see a.
Speaker 3: Delay in the job security for us many.
Speaker 4: Yes, listen, we're approaching four thousand children we have to
Speaker 4: take care of in this industry. That's wonderful.
Speaker 1: Well, we'll be watching the new SEC chair and the
Speaker 1: SEC conversations next year to see how this private credit land.
Speaker 2: That should have been my last topic now that I'm
Speaker 2: thinking of it, because there are three little sub things
Speaker 2: that new SEC chair you're probably going to see private
Speaker 2: credit no problem, because they're going to be morebertarian and
Speaker 2: like Genzer was pretty tight.
Speaker 3: I think it's bringing me looser.
Speaker 2: The other thing is the ETF share classes, where you
Speaker 2: can just like bolt on an ETF share.
Speaker 3: Class to a mutual fund.
Speaker 1: M hmm.
Speaker 2: I think that's gonna be like a It's gonna drain
Speaker 2: money into the ETF.
Speaker 3: A lot of people will switch over. It'll make switching easy.
Speaker 3: Do you think is there any other take on that.
Speaker 4: No, I just don't know that the SEC is ready
Speaker 4: to move forward on it. But we'll see with you know,
Speaker 4: with a new chair and new leadership, they seem to
Speaker 4: be well. I would have thought by now we would
Speaker 4: have seen approval if we had this conversation a year ago,
Speaker 4: and we haven't. So until we see the I think
Speaker 4: what they'll probably do is approve a couple of them
Speaker 4: and see how they work before opening up the door
Speaker 4: for everybody.
Speaker 2: Here's what this whole thing has going for it. It's
Speaker 2: got these gigantic issues. I think there's thirty five, thirty
Speaker 2: six that collectively managed like seven trait. These are big,
Speaker 2: no nonsense companies.
Speaker 1: Industry.
Speaker 2: It's the industry, and they are close with the ICI,
Speaker 2: who's close with Washington.
Speaker 3: They're going to get this done. There's too much power
Speaker 3: behind it.
Speaker 5: There's just one name, it's Blackrock. There's like once they
Speaker 5: show up, it's just like, all right, yeah, this is happening.
Speaker 5: So is there anything more than that that we need
Speaker 5: to know?
Speaker 4: Well, But it's the good thing is that it's not
Speaker 4: just them, It's it's some of the large mutual fund
Speaker 4: companies that don't have much of an ETF presence.
Speaker 2: But he's saying that, like Blackrock filing for it helps
Speaker 2: everybody because they got so much muscle.
Speaker 5: No.
Speaker 3: I agree.
Speaker 4: But if the SEC is worried about mutual funds versus ETFs,
Speaker 4: and the firms that are disproportionately tilted towards mutual funds
Speaker 4: are comfortable with offering ETFs, I think that should make
Speaker 4: it more palatable than the largest ETF provider saying, let
Speaker 4: me offer ETF share classes to my existing mutual funds.
Speaker 3: Yeah. Well, Vanguard did it.
Speaker 2: They were to fund company, and they did it successfully,
Speaker 2: So I think there's a precedent. The final thing from
Speaker 2: the new SEC chair is just when they just when
Speaker 2: I think I'm actual, they pull me back in. We're
Speaker 2: gonna see a ton of a coin ETFs x RP
Speaker 2: Solana h Bar, which I had to look up.
Speaker 3: I was like, what even is that?
Speaker 4: You're gonna have a gelt et.
Speaker 3: They're gonna there's.
Speaker 6: Some you know, ones that we shouldn't even name.
Speaker 2: I say, gonna lose his mind and so am I
Speaker 2: I thought it was done.
Speaker 5: You guys have no idea. I have to live in
Speaker 5: this chat with Eric and James every day. But but
Speaker 5: to that, if I could just add about the private
Speaker 5: equity thing and these now at coins, and that's what
Speaker 5: you got to really admire about the industry. Like we're
Speaker 5: just coming off of this fantastic year, and the industry
Speaker 5: is not saying let's just take a break like we've had.
Speaker 5: They're just like, let's push the next frontier, which is
Speaker 5: private assets whatever.
Speaker 1: And that's what you got to love about it.
Speaker 5: And I think with your new administration, I wouldn't be
Speaker 5: surprised to see ETF. They're like completely tied to that,
Speaker 5: like TARIFFYTF, so they're very opportunistic. I think there could
Speaker 5: be some we could maybe have another crazy year of
Speaker 5: filings and launches. So but that's what you gotta love
Speaker 5: about the industry. They just keep pushing the envelope.
Speaker 1: There's a moment where it goes too far.
Speaker 2: Well, what would stop all of this and especially the
Speaker 2: new product is just a really vicious bear market that
Speaker 2: will cool everything down. But until that happens, I just
Speaker 2: think that this the spirit of this year is going
Speaker 2: to just bleed into the next year.
Speaker 4: It's gonna it would stop the product innovation perhaps, but
Speaker 4: it's not going to stop the flows.
Speaker 3: You see money going well, I don't think you go
Speaker 3: to a trillion dollars.
Speaker 2: In twenty twenty two, the market was down eighteen percent
Speaker 2: and they took in six hundred billion, So I think
Speaker 2: you see. I think the market helps everybody just want
Speaker 2: to put money into it. But I agree with you,
Speaker 2: ETF will take in money.
Speaker 1: Rainershin Athan, Phil Donna Todd. Thanks so much for joining
Speaker 1: us on Trillions.
Speaker 3: It was great.
Speaker 6: Thanks for having me.
Speaker 1: Thanks, this is fun. Thanks for listening to Trillions until
Speaker 1: next time. You can find us on the Bloomberg Terminal,
Speaker 1: Bloomberg dot com, Apple Podcasts, Spotify, or wherever else you'd
Speaker 1: like to listen. We'd love to hear from you. We're
Speaker 1: on Twitter, I'm at Joel Webber Show. He's at Eric Altunas.
Speaker 1: This episode of Trillions was produced by Magnus Hendrickson. Bye