December 18, 2025 • 41 mins
Competing in the marketplace for exchange-traded funds — aka "The Terrordome" — is not for the faint of heart. It's like fighting a multi-front war where issuers have to market existing funds; engage in fee wars with the likes of Vanguard and BlackRock; and innovate in a rapidly changing industry, which now includes more than 300 firms. Only the strong thrive.
On this episode of Trillions, Eric Balchunas and Joel Weber speak with Brian Hartigan, the global head of ETFs and index investments at Invesco. The fourth-biggest ETF issuer in the US, Invesco has about $800 billion in assets under management and saw inflows of $67 billion in 2025. They discuss how the company competes against the industry's "Big Three," the secret behind QQQ's dramatic success and the surprising staying power of smart-beta ETFs. They also explore whether there are simply too many ETFs and how retail investors should assess volatile assets, like Bitcoin.
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Episode Transcript
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Speaker 1 (00:02):
Bloomberg Audio Studios, Podcasts, radio News.
Speaker 2 (00:13):
I'm Juel Webber and I'm Eric Belchunas Eric.
Speaker 3 (00:18):
We have a special guest today from Investco, Brian Hartigan.
He's the global head of ETFs and index Investments. Why
is Invesco so interesting?
Speaker 2 (00:28):
Yeah, you know, they're in the terrordome with there in
the upper echelon, but not in the big two, and
so they're in that sort of like level with First
Trust and Schwab and other sort of like i'd say
big dogs but not quite Blank Vanguard and black Rock,
And it's an interesting spot. If you look at their funds,
they have a ton of hits, a lot of people
like a lot of ones people love and know, and
(00:50):
one big one, one big one, Yeah, one super stud
The q's QQQ and QQQ and perhaps you've heard talk
about Yeah, perhaps you've heard of it, and but it's
interest company obviously used to be Power Shares purchased by Invesco.
And we have had a couple episodes we talked to
analysts and reporters, but this is sort of like, hey,
let's wrap the euroup talking to somebody who's in the
(01:11):
terror dome every day, fighting for every dollar. It is
hard in this industry, and there's a lot of things
going on in their products. They have a diversified product line,
so we can touch on a bunch of different themes
here and just sort of get the perspective from inside
that competitive healthcape.
Speaker 3 (01:27):
Again joining us Brian Hartigan of Investco, this time on
Trillions investcos etf playbook.
Speaker 4 (01:36):
Brian Wegan a trillions Warnow guys, great to bear.
Speaker 3 (01:40):
Just so that we have a disclaimer, Investco is a
Bloomberg sponsor. Okay, so I want to talk to you
about Invesco. What's the secret sauce at Invesco that strategically
distinguishes you, guys from all those other players in Eric's
thunderdome Terrordome.
Speaker 4 (01:55):
Sure, yeah, the Terroodome. I love it. It brings out
some of the grittiness. But we've been in the game
for quite some time, right, So we just recently hit
a trillion dollars in assets shameless plug trillion, but it's
through a see what you did there?
Speaker 2 (02:08):
Well, you know we always say the name we gave
this podcast podcast aged really well.
Speaker 4 (02:13):
Yes, number go, so trillion, trillion, keep hitting the trillion flows.
Investco has been in the ETF market for quite some
time early days, pioneer through power shares, expansion into factors,
fixed income, commodities, and global in terms of our overall reach,
so we've been in the tero doome. We've been fighting, competing,
We understand the landscape and it takes, you know, that
(02:37):
level of focus really to compete and reach investors within
the ETF landscape. So it's been a testament of a
really understanding investors, understanding needs and evolving as we've gone.
Speaker 3 (02:48):
What about this year? What have you learned this year
that you know is a timely insight for our listeners. Sure.
Speaker 4 (02:56):
Yeah, it's been a great year of returns. Many folks
kind of forget that at first February March cell down,
sell off, right, And what was interesting about the market
correction is it it really opened the door for more diversification.
From our view, there was a lot of US equity
dominance and that was great for ourselves for our lineup,
(03:17):
but I think you started to see investors look at
more opportunities for diversification. Factors, international commodities came back into play.
So it's a new world for investors to look at.
How do they want to diversify through ETFs.
Speaker 2 (03:32):
One of the things that was interesting to me. So
if I look at your ETFs by flows this year,
the QQQM and qqq are at the top, So let's
move those aside because I think everybody knows them. But
number two is kind of a chakra or three rather
is a chaker role SPMO. Most people probably don't know
what that is. That's the investco S and P five
hundred momentum ETF. You also have an international momentum in there.
(03:55):
We call that smart beta. We used to have a
bunch of episodes on beta kind of like went away
because it's not like the hot topic anymore, but it
took in I don't know, five hundred billion ish this year.
So smart beta, obviously, for those who don't know, is
basically when you take an index and you tweak it
a little like some Instead of the S and P,
you tweak it so it has a momentum tilt and
(04:16):
so it's active but passive at the same time. And
that sort of smart beta is like twenty five percent
of the assets. People don't talk about it. It's still
taking a bunch of cash. How would you do you?
Obviously you're still talking about with clients. What are those
conversations like and how did this one particular ETF get
so high on the list?
Speaker 4 (04:32):
Sure? For us, smart beta is a it's a mechanism
of factors, right, what is explaining market returns? And when
you look at it this year, concentration mag seven, those
are all momentum names. So momentum clearly is driving returns
and it's driving flows. The beauty of smart beta is
that it's emotionless, so you don't have to say, hey,
(04:53):
are these getting too big? Are they becoming too large
in my portfolio? So that creates that force discipline, and
I think in vestors are showing that they want to
know what the potential outcomes are going to be of
the ETF.
Speaker 3 (05:05):
So let's talk a little bit more about smart beta
and how smart beta works because it is unemotional, right,
It's just detached from that, and it's got a little
bot that basically tells it what to do, and it's
going to rebalance that set period of time. There's been
some pretty noteworthy ones that Eric and I have discussed before,
but I'm curious from your perspective, when was a moment
in time that you were like, Wow, that was exactly
what smart beta is supposed to do.
Speaker 4 (05:26):
Sure. Yeah, as you said, it's an index, right, and
it's smart in that it is more than just buying
the entire market, so it has a pre programmed discipline
to it that gets you to an exact factor. So
for us, it's seeing some of the leadership change. So
when we looked at our flows as you do on
the show, last year, quality was one of our biggest
(05:47):
in terms of garnering attention investors not sure where the
market was going, and quality tends to take on kind
of a best of breed. It's not your biggest momentum,
it's not your cheapest, but it brings in fundamental and
we saw much of that last year. Then you saw
kind of the election change, sentiment change quite a bit
in the market, and momentum took off, right. That was
(06:08):
investors getting back into the market, and you saw leadership change.
And that's what we tend to look at, not only
on flows, but also on market returns through factors.
Speaker 2 (06:16):
Yeah, and let me give you this SPMO is up
twenty seven percent. That's even better than the queues and
it's way better than the SMP which is eighteen percent. Oh,
that's a good year considering what you said about the
negativity earlier. One thing about spmo is and momentum is
what we found. We looked at active funds a lot
of active managers this year they did that thing where
they they are all full of the CFA, you know,
(06:38):
like fundamentals and I get it, and they shifted into
like non tech names. Momentum meanwhile, saw that tech names
were actually going better and tried to ride that and
it worked. So not having the mag seven is what
caused more active to underperform this year. They keep taking
the bait of biting on these like other fundament like
(07:00):
more fundamentally sound or low lower valuation sectors, and they're
like tech is just too expensive and ends up. Tech
just goes up again.
Speaker 3 (07:08):
But this is kind of where smart beta is distinguished,
right because it can just look at it from the
numbers and just be like, absolutely.
Speaker 2 (07:14):
We know exactly what to do now except like a
value ETF that they have probably didn't perform as well,
but it's just doing what the robot says. But momentum
obviously went into the tech names and the rest is
you know, that's why it's number three on the list.
So obviously those factors, there's regimes, right, yeah.
Speaker 4 (07:31):
Yeah, so the regimes and I think Eric you said
it best, right, it creates a challenge in the market,
not only for active but for managers. Right, where do
I allocate because you have such a systematic bias towards
towards price returns, momentum size and exposure. Right, So the
momentum factor creates a bit of a decision for investors.
(07:52):
Is it going to revert or do I want to
continue to maintain the trend? And we're seeing people really
use this as an allocation right to hedge some of
those those decisions.
Speaker 3 (08:01):
So why does this base get talked about less now
than say, ten years ago, when it was like it
was a little spicier, I think. But yet, you know,
active is sort of having a moment, So why isn't
smart beta a little bit more part of the conversation.
Speaker 4 (08:14):
Yeah, I've lived through quite a bit of it, and
you have written about it, you know, the active passive debate. Right,
Smart beta was trying not to be just cheap and
market exposure.
Speaker 3 (08:25):
Right.
Speaker 4 (08:25):
It was smarter, it was differentiated, and in every way
it was active. We talk about our SMP equal weight
fund RSP. It is one of the highest active shares
that you can get compared to the S and P
five hundred. Right, active means trying to be different than
the index so that you generate differentiated returns. So there
was it was kind of caught up in this What
(08:46):
are ETF's passive active? And now active is having its
new moment in its term. But the definition of active
is really evolving. Right, It's not just stockpicking anymore. It's
outcome based, it's active allocation, it's smart beta, it's factors,
and it's investors saying I want active, I value the
(09:08):
opportunities and active. But there are so many different ways
by which I can outperform, be it manager or very
pinpointed exposure that I can get through fixed income, equity
and even asset classes. Right, themes and the.
Speaker 2 (09:22):
Like I would say RSP, they're equal weighted. One is
the one I get asked a lot about, especially the
Money Show. You know, I go to the Money show.
That's like direct retail investors. They always ask me that
equal weighting. People are fascinated about equal waiting. It almost
seems like more fair, Like, yeah, I would like some
of the stocks that are a little less loved. But
it doesn't always work. But clearly as someone who has
a product, if you do want that, like I want
(09:44):
the market, but with a little less mag seven, this
one seems to be the first thing people reach for
when they want that, versus say going full value or
some of these new products which are like hey, let
me give you the SMP minus the top one hundred.
They're getting really very specific. But I think equal wait
it sort of like covers that feeling of like yeah,
I want the market, but not with the mag seven,
(10:06):
Like dominating seventy five billion dollars is the equal weight.
But can I ask you a story about this Goldman
filed for an equal waiting wait at ETF back like
ten years ago, and this one was forty forty BIPs,
and before Goldman can even make it to market, they
cut to twenty and just killed Goldman right there and
(10:27):
ended up just taking all the money. And that said,
that's why I called the Tarrodome roll. They looked at
the Goldman come in, there's like, okay, we have to
sever our own arm to survive, right, this is like castaway. Okay,
they did it, and they they more than made up
for it. In dollars since then. But I don't know
if you were part of that decision, But can you
(10:48):
go through that mentality, because if you're from the mutual
fun world, that's never even nothing even close to that exists.
If anything, you just start charging more.
Speaker 3 (10:56):
Brian, did you look at your arm and say I
don't need that anymore?
Speaker 4 (10:58):
Welling on how much we broadcast on this one for
the show it actually happened, I'll give you something of
a nugget. You know, the price cut was actually just
prior to the acquisition of Investco to Gougenheims, so certainly
the numbers were were recognized in the final deal terms.
So for us, you know, competitive pricing gave us an opportunity.
(11:20):
But equal weight maybe i'll pivot to some comments on that,
So equal weight for us, right, it's it's understandable. It's
S and P five hundred equal weight. It's predictable. Investors
know that when you know the mag seven is not performing,
being underweight, those names are going to likely generate outperformance.
(11:41):
So one of the downfalls or challenges that Active has
is unpredictability. Investors don't want to be surprised by Active.
They don't want to get a different return than what
they expected. So last year, if you look at our flows,
we had this diconomy of QQQ, which is concentrated large
names being one of our leaders, but RSP also being
(12:02):
one of the leaders in terms of flows. And that
just told us that investors are trying to understand where
the market's gonna pivot, and if it goes one way
continues to run, QQQ will outperform, and if it goes
another way, you know, and reverts, then something like RSP
will have different bets. So that's the understanding and that
the market is getting more sophisticated, that they want some
(12:22):
predictability and where they allocate.
Speaker 3 (12:25):
Do you think the Terroodome has gotten more intimidating?
Speaker 4 (12:29):
The tarodome is pretty full with is it roller skaters
or is that a different no.
Speaker 2 (12:33):
By the way, the metaphor people do throw in thunder Thunderdome.
Now that's Mad Max Beyond Thunderdome. That was the third
Mad Max movie, I believe where Tina turned to this
theme song, whatever we don't need another hero, that's Thunderdome.
It works. Terrordome is based on a Public Enemy song
called Welcome to the Tterodome a whole album. In fact,
listen to it. In my opinion, that sound and the
(12:55):
lyrics are what it would feel like if you launched
an ETF.
Speaker 4 (12:59):
So I have my playlist on the way out, you
got to add that one. Yes, for sure, that's big
public enement.
Speaker 2 (13:05):
They should play when you walk into the office at
every issue where it's like the frame of mind you
got to get into, you know, it's total survival.
Speaker 3 (13:11):
Space, like today was a good day. It's like it's
stereo dumb okay.
Speaker 4 (13:14):
But competition is certainly increasing right that active passive mutual
fund ETF. I will say ETFs are clearly becoming or
have become, the rapper of choice, and the competition is
trying to understand how how can they compete in that game,
and it makes it very difficult for new entrants, makes
it difficult for you know, legacy large providers trying to
(13:38):
pivot not only the rapper but their active content. And
there's a whole ecosystem from capital markets to product innovation
through index provider relationships and the like that really make
a strong ETF what it is. And that's that's through
that that knowledge of investors and opportunities that you can
create that outcome.
Speaker 2 (14:04):
The big three in ETFs, which would be Vanguard, Black Rockets,
the Street, their market sharees are roading because there's so
many competitors. I think sixty new issuers this year, three
hundred total, six hundred brands. There's just too many people
nibbling at their market share for them to grow it. However,
in the mutual fund space, they're big three growing market
share by a lot because there's just no energy, there's
(14:26):
no hungry newcomers, and I think that's what makes the
ETF industry so dynamic and endlessly interesting for us obviously.
But one thing on this there's been a couple i'll
call them like chirping. Every year or so, somebody writes
something about how ETFs are ruining the market. Lately it
was how they're ruining capitalism, And I just want to say, like,
I find that ETFs are probably a shining example of
(14:49):
capitalism because it's so brutal, it's very competitive. In the end,
the customers are choosing, it's natural, there's no kickbacks, the
best products win. And would you argue that or is
there something we're missing about how there is potentially a
problem in terms of ETFs. I know part of that
(15:10):
argument isn't the industry itself, although it's about the number
of ETFs, although there's way more mutual funds still, but
it's also about fundamentals, and like, oh, if all this
money is going into passive fundamentals, don't matter anymore. I
don't know you have anything about all that, because they
once a year this stuff comes up. I call it
the some worry articles, and a few of them just
came up over the past week.
Speaker 4 (15:30):
Sure, yeah, so I would agree there are pockets of
opportunity when you look at the ETF ecosystem. Right, So
capitalism as a whole, if there's an opportunity for gain,
if you can set up a system to generate profits
that will create that outcome for you. There's no excess
(15:50):
limits or there's no limitless there's no limitless capital in
the market. So I think what you've seen is a
bit of a shift of where some of that liquidity
has come from, and it's driving towards the ETF. The
ETF creates more liquidity. You've seen it in digital coin, right,
(16:11):
very simple wrapper, but it's creating liquidity, it's creating a
different way to access and otherwise liquid market. You see
it in options. The outcome of all of these buffer
and option income income advantage strategies are creating more liquid
liquidity in the underlying and fixed income.
Speaker 3 (16:29):
Right.
Speaker 4 (16:29):
Fixed income used to be a trade by appointment type
of market, and ETFs have created better liquidity in the underlying.
So it's not a guarantee, but I think through that
ecosystem of trading of market making, you're getting better pricing
and better liquidity within the rapper and within the markets.
Speaker 3 (16:50):
Is there a version of the world that becomes too liquid?
That was some of the worry.
Speaker 4 (16:56):
Sure, and I think there's you know, there's value in
private markets, private credits that you know, create solid you know,
access to issuers, differentiated return streams that that the market
is looking for. Will ETFs become the save all for
for private markets private equity? Not sure. I struggle with
(17:18):
the point we touched on of liquidity and transparency is
what an ETF thrives on. And I think you're trying
to create something different with private markets. So having that difference,
I think is important because you're going to get different
return profiles from those.
Speaker 2 (17:33):
Two You mentioned digital coins, you have a bitcoin etf
BTCo I believe is the ticker. You were one of
the original ten who launched two years ago. Huge deal.
They got to one fifty billion in assets total. Since
this sell off, this has been the worst. There's been
a couple pullbacks, but this is the worst one. I
think at the peak it was forty percent down from
the peak. I mean, I think it's now it's thirty,
(17:55):
but it was pretty bad. Now only four percent of
the assets left. The flows are pretty solid. As the
crypto Twitter crowd calls anybody investigating to have as a boomer.
Apparently the boomers have stronger hands, I think than people thought.
But I want to talk about from your perspective, this
is a different asset class, it's new, it's we call
(18:16):
it hot sauce. How are these investors that you have
thinking about it? Are they talking about it? Have they
committed to like a four or five year holding period
and they don't care? What's going through their minds? And
what do you make behind them holding up stronger than
most people thought?
Speaker 3 (18:33):
Sure?
Speaker 4 (18:34):
Yeah, I think I touched on the evolution and how
ETFs can help create accessibility to new asset classes like
digital and others. For us, this is a long game.
This is how do I access it, how do I
model it, how do I own it in a portfolio?
And we're seeing that with clients too, from wealth channels
(18:54):
among advisors, right there's limitations on how are where they
can allocate, So I think the due diligence process has
taken some time to get that into a variety of
outlets for investors. So definitely a long game. I think
you're seeing some short term technicals which shows you that
it's it's behaving like an asset. There are investors that
might have gotten in late and are now sitting on
(19:16):
losses that they don't have elsewhere, whether it's equities or
other asset classes. So you have some short term selloffs
maybe tax loss that that investors are taking. But I
think having kind of this this evolution into what we
would all know in terms of kind of technical technical markets,
you're starting to see that within the asset class.
Speaker 3 (19:39):
What do you think their appetite for a risk asset
like this is, because you know, down down thirty percent,
like it's asking a lot of a boomer specifically to
hang in there, right, Like how how you know, like,
what's what's the appetite the real appetite to take a
(19:59):
loss or write it.
Speaker 4 (20:02):
Yeah, the key is education, Right, how much did you
allocate and why was it cocktail party discussion or was
it true fundamental asset allocation that you said, Look, this
is new, it's volatile, I should own it and a
certain percentage you know that is either market cap weighted
benchmark weighted. But if you're over allocated and you see
(20:22):
this volatility, people should understand what those risks are going
to lead to. Right.
Speaker 2 (20:27):
We looked I just finished a book project on this.
We looked into this. If you held bitcoin for four
years at any time of its life, you made money
if you had a four year holding period, But once
you get below four years, it's up in the air.
You might have made a lot of money or lost
a lot of money. So it seems like a four
year holding period would be like, if you can't commit
(20:48):
to four years, don't buy it. That would be my advice.
The other thing is we have this thing called the
modern portfolio where we have found that a lot of
portfolios have gone to the core is you know, low
cost probably cheap beta or cheap smart beta, or even
cheap active. But it's like that's the vanilla stocks and
bonds usually now that's below twenty BIPs. But then that's boring, right,
(21:09):
you gotta wait thirty years for compounding, So people want
some fun in speculation, So we call it the hot
sauce bucket. It seems like if you put some of
this in your hot sauce bucket at two three percent,
then if it goes down, it's not the end of
the world because it's not really your nest egg, and
so there might be more intestinal fortitude you can get
because it's only a little tiny part and it's not
(21:31):
your nest egg. That's my thesis on how like this
ETF thing has lowered fees and made it very easy
and education is there that it's like, oh, I can
marry this low cost ETF like pebus, which is like
cheap beta, and I can just like wait thirty years
while it like compounds, and then I can do this
other stuff. And like the fact is like people can
(21:52):
get real committed to a portfolio now versus back in
the eighties when you had a five star manager. They
charged the lot, then they underperform it, like you had
to dump them and you just dump them at the bottom.
Then you've got the next one after they had already
had their good run. So people were constantly buying high
and selling low. I feel as though ETFs and low
cost investing in particular have in a way solved behavior
(22:13):
and allowed not only for holding long term vanilla, but
even having more stomach for the hot sauce because it's
only a tiny part of the whole meal. Does that
make sense? Am I onto something there? Or just am
I losing it? No?
Speaker 4 (22:27):
I'm I'm right with you. I think I would shake
that into kind of this this evolution of creating active
or putting active decisions further down the advice chain. Right,
it's not just the manager, it's the advisor, it's the investor,
and the ETF is creating more liquid, more accessible tools
for you to express those active bets, whether it's new
(22:50):
emerging asset classes or even fixed income. Right, fixed income,
you have pretty good success on the active side of
active managers, somewhere above fifty percent on a near term basis.
But investors now have the ability to overweight or underweight duration.
They could overweight or underweight credit. They can take a
(23:10):
core like an ad aggregate, you know type strategy, and
they can play around the edges, and that's what the
ETF does, and through the underlying gives you better execution,
better liquidity, better pricing to sourcing those those exposures.
Speaker 3 (23:25):
But how do you feel about Eric's hot sauce metaphor.
Speaker 4 (23:28):
I've always loved the hot sauce and we always want
to get more more tickers in the hot sauce category.
Speaker 2 (23:33):
That's why I roll with it. I've gotten pretty good
feedback on it. Like I also think you can't mess
with it. Like everybody knows what hot sauce is. Everybody
knows using small doses. Not everybody loves it. It just
like it's really it's a it's solid ol.
Speaker 3 (23:49):
Sorry, as you just said, though I love more tickers
in the hot sauce category. Is that where the white
space is? And how do you distinguish yourself in that
hot sauce category?
Speaker 4 (23:58):
Sure, I let er stick with the hot sauce, but
for us, it's emerging trends, right, so.
Speaker 2 (24:03):
They have hot sauce.
Speaker 4 (24:04):
We level on a minute.
Speaker 2 (24:06):
Ten is hot sauce. I'm sorry, it's like twenty solar stocks.
I'm sorry, that's gonna be like two three XCSMP. Thematic
is hot sauce. It's mild hot sauce. It's not like
ghost pepper, but it's still hot sauce.
Speaker 4 (24:18):
So totally agree. Hot sauce had been thematic right first
to market new ideas AI for us, you know, blockchain technology.
Even banks recently have been called it hot sauce or
emerging trends. And we've seen that again investors not looking
at thematic to get in and run returns, but starting
(24:39):
to allocate and using thematic as ways to differentiate their portfolios,
ways to generate active returns because you've got some of
that differentiated profile. So thematic, which used to be hey,
let's be first to market, let's raise the biggest etf
has started to compete to again a more mature market
where investors are using it for for hot sauce eric
(25:03):
or for for outsized returns.
Speaker 2 (25:05):
By the way, can I fun fact here? I believe
power shares started the first thematic etf ever. Can you
name it? Can you name it? You might not know.
This is going way back before you investment even acquired them.
Speaker 4 (25:19):
If I grab a drink of water, would I be around?
Speaker 3 (25:21):
Yes? Wow? Water.
Speaker 2 (25:24):
It came out in like two thousand and five or so,
get this, it's p h O. But they should have
the Vietnam ETF should trade you. You should be just
h O or something and give foe to them. Anyway,
that's just something that I always though.
Speaker 4 (25:39):
We evolved to numbers H two oh at some point, yeah,
that's it.
Speaker 2 (25:42):
That would be perfect. But the water ETF, get this
has two billion dollars. You know why because at some point, Joel,
water is going to be a big deal. Hopefully it's
after we're gone. They're going to be fighting wars over water.
This thing could go to the moon. But it's just
that when.
Speaker 3 (25:58):
It's like the graduate, I've got one more for you,
only it's not plastic.
Speaker 2 (26:01):
It's it's water. Well that's what they call it. Blue gold. Yeah,
I've I did a lot of research on water. I thought,
oh my god, this is the big thing. I wrote
all these articles and it's like you could get that.
This is one of those calls you can get right,
but be like fifty years early. Remember you know the
movie water World. That's what that was kind of all about. Anyway,
we could have water could be the best performing ETF
(26:22):
in history at some point in the future. We just
don't know when I.
Speaker 3 (26:27):
Could say that about a few other things, probably, but
I like it. I like your enthusiasm. Yeah, okay. So
one thing that we've touched on but we haven't actually
really spent some time talking about it yet. It is
an ETF that probably needs no introduction, but the cues
(26:50):
Eric calls it the eighth wonder of the world. Yes,
it has it gone up at all? Can it be
like seven through six? Yeh? Or does it have to
be eight? Still?
Speaker 2 (26:57):
Well there's seven one? Yeah? You yeah, come on, you
definitely know that. Okay. The reason we call it that
is also because it's like an unusual specimen like the
you know, typically you have an index since market cap waited,
and it's like, okay, that's beta. Beta does really well.
Then you have like the tech sector. Okay, great, tech
is good. Ques is neither one of those. It just
(27:18):
stocks the list on NASDAK. So it's like, what's so
great about that? Well? I thought I pondered this more
than most, like more than an rural person should. My
thesis on the why que job? Actually yeah, it is
my job, but this is I went real deep my
thesis on why the ques kick so much butt and
(27:39):
it's not tech and it's not beta and it's just
these stocks that listens on NASAK. Is the Steve Jobs effect.
When Steve Jobs in nineteen eighty called you guys, I
asked your PR person, Stephanie, if I could even find
the person who took this call, but they said they're
probably retired at this point, like or even worse. But
in nineteen eighty somebody took a call from Steve Jobs.
(28:00):
He said, I want to listen to NASDAK and they
were like, sure and appen. Nobody who appened. Steve Jabs
is twenty seven years old and he wanted to list
there because all the dorks from IBM were unicy, so
he wanted to go to NASDAC, just like Michael Jordan
went to Nike instead of Converse and Adidas. This was
the Jordan Nike moment of this market. Once Steve Jobs
(28:21):
went there, people were like, ooh, that must be the
place to be. So of course Bill Gates, who worshiped
Steve Jobs, he went there when Microsoft went public in
ninety three. Then he got those two guys there. It's
over since then, especially when Steve Jobs came back for
his third act, that has been the place to be.
Amazon Tesla. If you are a visionary founder, CEO who
(28:42):
works seven days a week, that's where you go. Steve
Jobs set that he was the mold of this tech
revolution and to me, that's why the cues kicked so much.
But it's the Steve Jobs follow effect thoughts.
Speaker 4 (28:59):
Fully green the NASZAQ one hundred, as we've talked about
smart Beta, it is an index, but for us, we
track it based on innovation and innovation as a factor
that we track is on R and D research and development.
And if you looked at those hundred names, each of
those companies commit more to research and development than any
other peer group. So it's founded in innovation, it's founded
(29:21):
in differentiation, and I think going back to original days
of Apple to Microsoft to what we see today, it's
truly evolved with the modernizing economy, right, so going from
PCs to servers, to telecom bandwidth to having a PC
in your hand that's mobile and getting into AI that
(29:42):
you speak to on your phone for twenty five years,
it's evolved with not only personal consumption, but the evolution
of our modern economy, and the leaders that are driving
that tend to be listed on nasdek.
Speaker 2 (29:56):
Can you pull some strings and get us this person
who took the call in nineteen. If we can get them,
Joel said, he will do a whole podcast Ken Burns
type documentary on this. But we need that person. Can
you pull some strings for me, some digging? Yeah, I
mean yeah, or reach out? If you're like, did they
know the importance of that call?
Speaker 3 (30:15):
No, I'm guessing not. You know, like I think it's
just another phone call where you're like, yeah, sure, whatever,
and then everything else that follows you're like, oh, I
love you that stuff. Though, we'd love to find and
interview that person. As long as we're talking about QUES,
probably can't talk about that without talking about the Unit
Investment Trust, the u I T, which is basically the
framework that QQQ is built on, and not that many
(30:38):
others like one. That's right, Uh, if you could have
a redo, is there anything more in your life that
you would rather have a redo on than Q being
a u I T.
Speaker 4 (30:47):
Sure? Well, of course you want the ETF market to
be started, right, So thank you for the pioneers in
that regard. But like many things, markets evolve, structures evolve,
regulations evolve, and we've seen that through route the last
twenty five years in the ETF market to get to
some level of standards standardization. There was a time at
which some had exemptive relief and some didn't. So early
(31:09):
entrants that had that relief were able to launch ETFs,
others were not. So evolution is is great, and you
know that's that's an opportunity for some of these unit
investment trusts to modernize their structure and and and you know,
bring bring the structure and the ETF ecosysm ecosystem into
(31:30):
that investor base.
Speaker 2 (31:32):
So our outlook, which we published this month, basically is
ETFs are living the dream, but reality checks await. So
we don't think this big movement is going to be
dampered much. Market going down a little, maybe it's like
a little less record breaking. But there's a couple of
things out there, like, for example, some stocks are real
(31:55):
volatile and they get two XD and one of those
probably will blow up. There could be something there the
mutual fund share classes that are adding ETF share classes.
There could be some tax contagion there where the ETF
gets capital gains because of the mutual fund. There's a
couple of things that I think are maybe possible stories
Also just the paradox of choice, so many products that
(32:17):
it's just hard to pick.
Speaker 3 (32:18):
I call it the breadee, the bread ale. What what
am I going to do? Which which type of bread
is am I going to use?
Speaker 2 (32:23):
So those are some of the things we're looking at
as like what could be some hiccups. We don't see
anything derailing it. But what do you make of that?
Like what keeps you up at night? What are you
looking at, whether it's your own firm or the industry
as a whole.
Speaker 4 (32:35):
Sure, I think ETF share class is a is a
great opportunity to uh to integrate, you know, structures and
bring some of the advantages that ETFs offer into mutual funds.
But I've I've been out there saying that there's pure
and less pure. Right, So an ETF that only has
its own not share class, but trades as an ETF
will take advantages of all the tax ability, all the liquidity,
(33:00):
the track record and the like. Pivoting into the share
class is complex, and that's why you've seen some of
the reviews. The industry come together to identify what the
solution is and what would look like a preferred outcome
for investors. And there's still quite a bit of uncertainty
there from not only wealth channels, but issuers as well.
(33:23):
Because you have to be transparent. Some managers don't want
to be transparent. We've seen that. We've tried that, and
non transparent the market didn't really respond to it. You
have to have the right pricing. You don't have to
be the lowest cost, but there could be price impacts,
so you need to look at economics and the impact
of that overall, and you still need to provide returns.
(33:43):
Just moving it into an ETF doesn't guarantee success, so
differentiated active strong managers quality investment performance is still going
to drive the day.
Speaker 2 (33:54):
Yeah, you got it tough enough. I always say you
have to come to the ETF industry on it's terms,
not yours, and not everybody wants to do that. Said,
we could be. We did the math. There's about three
thousand mutual funds that currently don't have any ETF where
the issuer has no ETFs at all that have filed
for the share class. So there's potentially three thousand new
(34:14):
ETFs that could just be bolted onto a mutual fund.
Probably won't be that many. That's a big deal, Joel,
I mean it just might take a couple of years
to play out.
Speaker 3 (34:23):
Though how much of twenty twenty six are we going
to be talking about.
Speaker 2 (34:26):
This a lot? I think DFA is going to be
the guinea pig. They're really pushing it. It fits their
whole business and plumbing perfectly this particular thing. But if
they see success, look out especially you know, it's tricky.
There's one caveats all this. And I'm not sure if
you thought about this, but Capitol Group, they were on
ETFIQ they said, we're not doing anything. We don't believe
(34:48):
in this, and they're the biggest active manager on Earth.
I mean, they're the number one, So what they say matters.
And if they look at this and said we're just
going to put ETFs out there separate from the mutual fund,
that's also Capital Groups of why non transparent active I
think didn't take off because when they finally came in,
they went transparent, and so that's also interesting. So I
(35:09):
don't know, but all I know is if cope you
will find success, the rest will rush in. But that
the first part is we don't totally know.
Speaker 3 (35:16):
What does success look like, Brian.
Speaker 4 (35:18):
So I think success is bringing more quality investment capabilities
to investors through the optimal wrapper, and that's what we're
looking at. We're on a very focused pace in our
own path of share class, and that's looking at it
very opportunistically, not ETF share class for all type of approach,
but bringing you know, where it makes sense, where we
(35:41):
think we can have the liquidity and where the managers
can operate within the structure. So I think you're going
to see and each each manager has a different strategy, right,
they have a different path and they've come down a
different road. Some have large active and they might say, hey,
we're just going to cannibalize ourselves. We're going to try
to get pivots into to somewhat similar but differentiated strategies,
(36:02):
not cloned, and that's our best path forward to avoid
maybe a difficult decision. Others just want to get into
the ETF space, right, so they want to launch and
find a way to get into that market. But not
all will succeed because there are again i'll speak to
the ecosystem, they're trading implications, cost implications, liquidity implications that
(36:24):
managers need to weigh trod them.
Speaker 2 (36:27):
And another thing is the transparency thing is a big
deal for some because they spend their whole life picking
these stocks and they feel like it's their ip. But
I have found that I don't think anybody cares. I mean,
I give ARC a lot of credit. They came out transparent.
She even shows you what the trades were that day.
I mean, it's full transparency, and I just think that's
(36:48):
sort of what people demand in their ETFs. It's sort
of like an attribute of an ETF. They're used to,
so they don't want it to be different. But some
managers just I think it's hard for them to get
over that, but I think they should. Nobody cares. Nobody
cares if you have Amazon at three percent and the
market has like the S and P's at like six percent,
like nobody cares. It's like they're just gonna look at
the returns. So I just think it doesn't matter anymore.
(37:11):
There's so many portfolios. Back in the day, it was
like Jeff Finnick managed the Filly Magellan and it was
like that was like so big and if he if
he showed his holdings, you could get ahead of it.
Like there was some legit issues. I don't really see
that those days are over, so I think they should
just come in try it. This is the technology. Everybody
wants to use it. It's the equivalent of Spotify. It'd
(37:34):
be like being in a band and like refusing to
take your music from compact disc and putting it on Spotify,
Like why would you do that?
Speaker 3 (37:40):
Still some people to do it.
Speaker 2 (37:42):
I know, well no, Like Neil Young is like, listen
to my music on analog. It's like, okay, fine, Harvest
Moon sounds two percent better on analog, but like, I'm.
Speaker 3 (37:50):
Sorry more than two percent, but I hear you.
Speaker 2 (37:53):
By the way, Harvest Harvest is the better album. That's
the one from nineteen seventy three with Old Man. That's
a good album and it does sound good on vinyl, all.
Speaker 3 (38:02):
Right, Brian, Final question, favorite ticker other than any of Invesco's.
Speaker 2 (38:09):
Wow, I take your time?
Speaker 4 (38:11):
I need a ten second count?
Speaker 2 (38:13):
No, where did it take your time?
Speaker 3 (38:16):
I'll motion with my hand to just like pretend that
it's a shot clock. Well, you like the ref and
the it's like five seconds.
Speaker 4 (38:25):
You know, I'm going to bring it back to Invesco.
But it's your favorite too. What so most creative ticker?
I can't give too much credit outside of our own
our own home cooking PBJ.
Speaker 2 (38:38):
Wait a second, that's your ticker.
Speaker 3 (38:40):
Right, oh, favorite other than yours?
Speaker 4 (38:42):
I know I pivoted.
Speaker 3 (38:43):
Yeah, he can't do it, so PBJ.
Speaker 2 (38:45):
Matt Kaufman, who's from Wheaton, which is where the Power
Shares people grew up. He picked PBJ, which I thought
it was a good one.
Speaker 3 (38:53):
But I'll give it to you if you can answer.
Do you prefer the crunchy or the creamy version of
peanut butter?
Speaker 4 (39:00):
You always gotta go creamy. Yeah, that's how crunchy is interesting.
The real question is strawberry or great and then jelly
or jam? So many decisions. Maybe there's an analyst.
Speaker 3 (39:10):
Yeah, PVJ.
Speaker 2 (39:11):
Just wrap it up in it or that that stuff
that comes where you you suppress it and both come
out at the same time.
Speaker 3 (39:17):
Its gross.
Speaker 2 (39:18):
Not for me. I'm fine with that. Well, you have
another thing. When you get the jelly and the peanut butter,
do you use two different knives or do you like
how do you deal with that peanut butter?
Speaker 3 (39:28):
First, take the peanut butter all the way off on
the bread, and then you do the jam.
Speaker 2 (39:31):
You cannot possibly get all the peanut butter off without
breaking the bread.
Speaker 3 (39:34):
And you can watch me, okay, give you a tutorial.
Speaker 2 (39:37):
That's That's what that thing solves, is having to use
two knives. It's annoying.
Speaker 3 (39:40):
But because I do.
Speaker 2 (39:42):
Peanut butter and jelly like probably once a week, and
I watched the whole knife off and I'm like, they
that's where the guy who came up with that one
you pour both together, That's what he was.
Speaker 3 (39:52):
There's a paper towel that you can also do. But
by the way, this is the cutting room floor for
this episode is going to be well.
Speaker 2 (40:00):
But there is a metaphor there which sometimes ETFs make
something like the two x ETFs. They make something just
a little bit easier, and that's sort of similar, like
because we always tell people like why is this so popular,
I'm like, honestly, dude, people are lazy. If you can
make something just a touch easier, like, you're gonna get
some buyers. You know who said that? And Dorsey, right,
(40:21):
Tom Dorsey, he was like he was talking.
Speaker 3 (40:24):
About how what are you bringing back to smart Beta?
Speaker 2 (40:27):
Yeah, Tom Dorsey from my book, he was like, he
really highlighted the convenience aspect of ETFs big time. He's great,
He's got a hope. Following Yeah, he's part of their stable.
Speaker 3 (40:38):
Yeah, Brian, thanks for joining us some Trucks, Thanks, Guess,
Thanks for listening to trucks. Until next time. You can
find us on the Bloomberg Terminal, Bloomberg dot com, Apple Podcasts, Spotify,
or wherever else do you like to listen. We'd love
to hear from you. Hit us up on Social. Trillions
(41:00):
is produced by Magnus Hendrickson and Ryan Kessler. Amy Keene
is our executive producer. Sage Bauman is the head of
Bloomberg Podcast. Bye b
Bloomberg Audio Studios, Podcasts, radio News.
Speaker 2 (00:13):
I'm Juel Webber and I'm Eric Belchunas Eric.
Speaker 3 (00:18):
We have a special guest today from Investco, Brian Hartigan.
He's the global head of ETFs and index Investments. Why
is Invesco so interesting?
Speaker 2 (00:28):
Yeah, you know, they're in the terrordome with there in
the upper echelon, but not in the big two, and
so they're in that sort of like level with First
Trust and Schwab and other sort of like i'd say
big dogs but not quite Blank Vanguard and black Rock,
And it's an interesting spot. If you look at their funds,
they have a ton of hits, a lot of people
like a lot of ones people love and know, and
(00:50):
one big one, one big one, Yeah, one super stud
The q's QQQ and QQQ and perhaps you've heard talk
about Yeah, perhaps you've heard of it, and but it's
interest company obviously used to be Power Shares purchased by Invesco.
And we have had a couple episodes we talked to
analysts and reporters, but this is sort of like, hey,
let's wrap the euroup talking to somebody who's in the
(01:11):
terror dome every day, fighting for every dollar. It is
hard in this industry, and there's a lot of things
going on in their products. They have a diversified product line,
so we can touch on a bunch of different themes
here and just sort of get the perspective from inside
that competitive healthcape.
Speaker 3 (01:27):
Again joining us Brian Hartigan of Investco, this time on
Trillions investcos etf playbook.
Speaker 4 (01:36):
Brian Wegan a trillions Warnow guys, great to bear.
Speaker 3 (01:40):
Just so that we have a disclaimer, Investco is a
Bloomberg sponsor. Okay, so I want to talk to you
about Invesco. What's the secret sauce at Invesco that strategically
distinguishes you, guys from all those other players in Eric's
thunderdome Terrordome.
Speaker 4 (01:55):
Sure, yeah, the Terroodome. I love it. It brings out
some of the grittiness. But we've been in the game
for quite some time, right, So we just recently hit
a trillion dollars in assets shameless plug trillion, but it's
through a see what you did there?
Speaker 2 (02:08):
Well, you know we always say the name we gave
this podcast podcast aged really well.
Speaker 4 (02:13):
Yes, number go, so trillion, trillion, keep hitting the trillion flows.
Investco has been in the ETF market for quite some
time early days, pioneer through power shares, expansion into factors,
fixed income, commodities, and global in terms of our overall reach,
so we've been in the tero doome. We've been fighting, competing,
We understand the landscape and it takes, you know, that
(02:37):
level of focus really to compete and reach investors within
the ETF landscape. So it's been a testament of a
really understanding investors, understanding needs and evolving as we've gone.
Speaker 3 (02:48):
What about this year? What have you learned this year
that you know is a timely insight for our listeners. Sure.
Speaker 4 (02:56):
Yeah, it's been a great year of returns. Many folks
kind of forget that at first February March cell down,
sell off, right, And what was interesting about the market
correction is it it really opened the door for more diversification.
From our view, there was a lot of US equity
dominance and that was great for ourselves for our lineup,
(03:17):
but I think you started to see investors look at
more opportunities for diversification. Factors, international commodities came back into play.
So it's a new world for investors to look at.
How do they want to diversify through ETFs.
Speaker 2 (03:32):
One of the things that was interesting to me. So
if I look at your ETFs by flows this year,
the QQQM and qqq are at the top, So let's
move those aside because I think everybody knows them. But
number two is kind of a chakra or three rather
is a chaker role SPMO. Most people probably don't know
what that is. That's the investco S and P five
hundred momentum ETF. You also have an international momentum in there.
(03:55):
We call that smart beta. We used to have a
bunch of episodes on beta kind of like went away
because it's not like the hot topic anymore, but it
took in I don't know, five hundred billion ish this year.
So smart beta, obviously, for those who don't know, is
basically when you take an index and you tweak it
a little like some Instead of the S and P,
you tweak it so it has a momentum tilt and
(04:16):
so it's active but passive at the same time. And
that sort of smart beta is like twenty five percent
of the assets. People don't talk about it. It's still
taking a bunch of cash. How would you do you?
Obviously you're still talking about with clients. What are those
conversations like and how did this one particular ETF get
so high on the list?
Speaker 4 (04:32):
Sure? For us, smart beta is a it's a mechanism
of factors, right, what is explaining market returns? And when
you look at it this year, concentration mag seven, those
are all momentum names. So momentum clearly is driving returns
and it's driving flows. The beauty of smart beta is
that it's emotionless, so you don't have to say, hey,
(04:53):
are these getting too big? Are they becoming too large
in my portfolio? So that creates that force discipline, and
I think in vestors are showing that they want to
know what the potential outcomes are going to be of
the ETF.
Speaker 3 (05:05):
So let's talk a little bit more about smart beta
and how smart beta works because it is unemotional, right,
It's just detached from that, and it's got a little
bot that basically tells it what to do, and it's
going to rebalance that set period of time. There's been
some pretty noteworthy ones that Eric and I have discussed before,
but I'm curious from your perspective, when was a moment
in time that you were like, Wow, that was exactly
what smart beta is supposed to do.
Speaker 4 (05:26):
Sure. Yeah, as you said, it's an index, right, and
it's smart in that it is more than just buying
the entire market, so it has a pre programmed discipline
to it that gets you to an exact factor. So
for us, it's seeing some of the leadership change. So
when we looked at our flows as you do on
the show, last year, quality was one of our biggest
(05:47):
in terms of garnering attention investors not sure where the
market was going, and quality tends to take on kind
of a best of breed. It's not your biggest momentum,
it's not your cheapest, but it brings in fundamental and
we saw much of that last year. Then you saw
kind of the election change, sentiment change quite a bit
in the market, and momentum took off, right. That was
(06:08):
investors getting back into the market, and you saw leadership change.
And that's what we tend to look at, not only
on flows, but also on market returns through factors.
Speaker 2 (06:16):
Yeah, and let me give you this SPMO is up
twenty seven percent. That's even better than the queues and
it's way better than the SMP which is eighteen percent. Oh,
that's a good year considering what you said about the
negativity earlier. One thing about spmo is and momentum is
what we found. We looked at active funds a lot
of active managers this year they did that thing where
they they are all full of the CFA, you know,
(06:38):
like fundamentals and I get it, and they shifted into
like non tech names. Momentum meanwhile, saw that tech names
were actually going better and tried to ride that and
it worked. So not having the mag seven is what
caused more active to underperform this year. They keep taking
the bait of biting on these like other fundament like
(07:00):
more fundamentally sound or low lower valuation sectors, and they're
like tech is just too expensive and ends up. Tech
just goes up again.
Speaker 3 (07:08):
But this is kind of where smart beta is distinguished,
right because it can just look at it from the
numbers and just be like, absolutely.
Speaker 2 (07:14):
We know exactly what to do now except like a
value ETF that they have probably didn't perform as well,
but it's just doing what the robot says. But momentum
obviously went into the tech names and the rest is
you know, that's why it's number three on the list.
So obviously those factors, there's regimes, right, yeah.
Speaker 4 (07:31):
Yeah, so the regimes and I think Eric you said
it best, right, it creates a challenge in the market,
not only for active but for managers. Right, where do
I allocate because you have such a systematic bias towards
towards price returns, momentum size and exposure. Right, So the
momentum factor creates a bit of a decision for investors.
(07:52):
Is it going to revert or do I want to
continue to maintain the trend? And we're seeing people really
use this as an allocation right to hedge some of
those those decisions.
Speaker 3 (08:01):
So why does this base get talked about less now
than say, ten years ago, when it was like it
was a little spicier, I think. But yet, you know,
active is sort of having a moment, So why isn't
smart beta a little bit more part of the conversation.
Speaker 4 (08:14):
Yeah, I've lived through quite a bit of it, and
you have written about it, you know, the active passive debate. Right,
Smart beta was trying not to be just cheap and
market exposure.
Speaker 3 (08:25):
Right.
Speaker 4 (08:25):
It was smarter, it was differentiated, and in every way
it was active. We talk about our SMP equal weight
fund RSP. It is one of the highest active shares
that you can get compared to the S and P
five hundred. Right, active means trying to be different than
the index so that you generate differentiated returns. So there
was it was kind of caught up in this What
(08:46):
are ETF's passive active? And now active is having its
new moment in its term. But the definition of active
is really evolving. Right, It's not just stockpicking anymore. It's
outcome based, it's active allocation, it's smart beta, it's factors,
and it's investors saying I want active, I value the
(09:08):
opportunities and active. But there are so many different ways
by which I can outperform, be it manager or very
pinpointed exposure that I can get through fixed income, equity
and even asset classes. Right, themes and the.
Speaker 2 (09:22):
Like I would say RSP, they're equal weighted. One is
the one I get asked a lot about, especially the
Money Show. You know, I go to the Money show.
That's like direct retail investors. They always ask me that
equal weighting. People are fascinated about equal waiting. It almost
seems like more fair, Like, yeah, I would like some
of the stocks that are a little less loved. But
it doesn't always work. But clearly as someone who has
a product, if you do want that, like I want
(09:44):
the market, but with a little less mag seven, this
one seems to be the first thing people reach for
when they want that, versus say going full value or
some of these new products which are like hey, let
me give you the SMP minus the top one hundred.
They're getting really very specific. But I think equal wait
it sort of like covers that feeling of like yeah,
I want the market, but not with the mag seven,
(10:06):
Like dominating seventy five billion dollars is the equal weight.
But can I ask you a story about this Goldman
filed for an equal waiting wait at ETF back like
ten years ago, and this one was forty forty BIPs,
and before Goldman can even make it to market, they
cut to twenty and just killed Goldman right there and
(10:27):
ended up just taking all the money. And that said,
that's why I called the Tarrodome roll. They looked at
the Goldman come in, there's like, okay, we have to
sever our own arm to survive, right, this is like castaway. Okay,
they did it, and they they more than made up
for it. In dollars since then. But I don't know
if you were part of that decision, But can you
(10:48):
go through that mentality, because if you're from the mutual
fun world, that's never even nothing even close to that exists.
If anything, you just start charging more.
Speaker 3 (10:56):
Brian, did you look at your arm and say I
don't need that anymore?
Speaker 4 (10:58):
Welling on how much we broadcast on this one for
the show it actually happened, I'll give you something of
a nugget. You know, the price cut was actually just
prior to the acquisition of Investco to Gougenheims, so certainly
the numbers were were recognized in the final deal terms.
So for us, you know, competitive pricing gave us an opportunity.
(11:20):
But equal weight maybe i'll pivot to some comments on that,
So equal weight for us, right, it's it's understandable. It's
S and P five hundred equal weight. It's predictable. Investors
know that when you know the mag seven is not performing,
being underweight, those names are going to likely generate outperformance.
(11:41):
So one of the downfalls or challenges that Active has
is unpredictability. Investors don't want to be surprised by Active.
They don't want to get a different return than what
they expected. So last year, if you look at our flows,
we had this diconomy of QQQ, which is concentrated large
names being one of our leaders, but RSP also being
(12:02):
one of the leaders in terms of flows. And that
just told us that investors are trying to understand where
the market's gonna pivot, and if it goes one way
continues to run, QQQ will outperform, and if it goes
another way, you know, and reverts, then something like RSP
will have different bets. So that's the understanding and that
the market is getting more sophisticated, that they want some
(12:22):
predictability and where they allocate.
Speaker 3 (12:25):
Do you think the Terroodome has gotten more intimidating?
Speaker 4 (12:29):
The tarodome is pretty full with is it roller skaters
or is that a different no.
Speaker 2 (12:33):
By the way, the metaphor people do throw in thunder Thunderdome.
Now that's Mad Max Beyond Thunderdome. That was the third
Mad Max movie, I believe where Tina turned to this
theme song, whatever we don't need another hero, that's Thunderdome.
It works. Terrordome is based on a Public Enemy song
called Welcome to the Tterodome a whole album. In fact,
listen to it. In my opinion, that sound and the
(12:55):
lyrics are what it would feel like if you launched
an ETF.
Speaker 4 (12:59):
So I have my playlist on the way out, you
got to add that one. Yes, for sure, that's big
public enement.
Speaker 2 (13:05):
They should play when you walk into the office at
every issue where it's like the frame of mind you
got to get into, you know, it's total survival.
Speaker 3 (13:11):
Space, like today was a good day. It's like it's
stereo dumb okay.
Speaker 4 (13:14):
But competition is certainly increasing right that active passive mutual
fund ETF. I will say ETFs are clearly becoming or
have become, the rapper of choice, and the competition is
trying to understand how how can they compete in that game,
and it makes it very difficult for new entrants, makes
it difficult for you know, legacy large providers trying to
(13:38):
pivot not only the rapper but their active content. And
there's a whole ecosystem from capital markets to product innovation
through index provider relationships and the like that really make
a strong ETF what it is. And that's that's through
that that knowledge of investors and opportunities that you can
create that outcome.
Speaker 2 (14:04):
The big three in ETFs, which would be Vanguard, Black Rockets,
the Street, their market sharees are roading because there's so
many competitors. I think sixty new issuers this year, three
hundred total, six hundred brands. There's just too many people
nibbling at their market share for them to grow it. However,
in the mutual fund space, they're big three growing market
share by a lot because there's just no energy, there's
(14:26):
no hungry newcomers, and I think that's what makes the
ETF industry so dynamic and endlessly interesting for us obviously.
But one thing on this there's been a couple i'll
call them like chirping. Every year or so, somebody writes
something about how ETFs are ruining the market. Lately it
was how they're ruining capitalism, And I just want to say, like,
I find that ETFs are probably a shining example of
(14:49):
capitalism because it's so brutal, it's very competitive. In the end,
the customers are choosing, it's natural, there's no kickbacks, the
best products win. And would you argue that or is
there something we're missing about how there is potentially a
problem in terms of ETFs. I know part of that
(15:10):
argument isn't the industry itself, although it's about the number
of ETFs, although there's way more mutual funds still, but
it's also about fundamentals, and like, oh, if all this
money is going into passive fundamentals, don't matter anymore. I
don't know you have anything about all that, because they
once a year this stuff comes up. I call it
the some worry articles, and a few of them just
came up over the past week.
Speaker 4 (15:30):
Sure, yeah, so I would agree there are pockets of
opportunity when you look at the ETF ecosystem. Right, So
capitalism as a whole, if there's an opportunity for gain,
if you can set up a system to generate profits
that will create that outcome for you. There's no excess
(15:50):
limits or there's no limitless there's no limitless capital in
the market. So I think what you've seen is a
bit of a shift of where some of that liquidity
has come from, and it's driving towards the ETF. The
ETF creates more liquidity. You've seen it in digital coin, right,
(16:11):
very simple wrapper, but it's creating liquidity, it's creating a
different way to access and otherwise liquid market. You see
it in options. The outcome of all of these buffer
and option income income advantage strategies are creating more liquid
liquidity in the underlying and fixed income.
Speaker 3 (16:29):
Right.
Speaker 4 (16:29):
Fixed income used to be a trade by appointment type
of market, and ETFs have created better liquidity in the underlying.
So it's not a guarantee, but I think through that
ecosystem of trading of market making, you're getting better pricing
and better liquidity within the rapper and within the markets.
Speaker 3 (16:50):
Is there a version of the world that becomes too liquid?
That was some of the worry.
Speaker 4 (16:56):
Sure, and I think there's you know, there's value in
private markets, private credits that you know, create solid you know,
access to issuers, differentiated return streams that that the market
is looking for. Will ETFs become the save all for
for private markets private equity? Not sure. I struggle with
(17:18):
the point we touched on of liquidity and transparency is
what an ETF thrives on. And I think you're trying
to create something different with private markets. So having that difference,
I think is important because you're going to get different
return profiles from those.
Speaker 2 (17:33):
Two You mentioned digital coins, you have a bitcoin etf
BTCo I believe is the ticker. You were one of
the original ten who launched two years ago. Huge deal.
They got to one fifty billion in assets total. Since
this sell off, this has been the worst. There's been
a couple pullbacks, but this is the worst one. I
think at the peak it was forty percent down from
the peak. I mean, I think it's now it's thirty,
(17:55):
but it was pretty bad. Now only four percent of
the assets left. The flows are pretty solid. As the
crypto Twitter crowd calls anybody investigating to have as a boomer.
Apparently the boomers have stronger hands, I think than people thought.
But I want to talk about from your perspective, this
is a different asset class, it's new, it's we call
(18:16):
it hot sauce. How are these investors that you have
thinking about it? Are they talking about it? Have they
committed to like a four or five year holding period
and they don't care? What's going through their minds? And
what do you make behind them holding up stronger than
most people thought?
Speaker 3 (18:33):
Sure?
Speaker 4 (18:34):
Yeah, I think I touched on the evolution and how
ETFs can help create accessibility to new asset classes like
digital and others. For us, this is a long game.
This is how do I access it, how do I
model it, how do I own it in a portfolio?
And we're seeing that with clients too, from wealth channels
(18:54):
among advisors, right there's limitations on how are where they
can allocate, So I think the due diligence process has
taken some time to get that into a variety of
outlets for investors. So definitely a long game. I think
you're seeing some short term technicals which shows you that
it's it's behaving like an asset. There are investors that
might have gotten in late and are now sitting on
(19:16):
losses that they don't have elsewhere, whether it's equities or
other asset classes. So you have some short term selloffs
maybe tax loss that that investors are taking. But I
think having kind of this this evolution into what we
would all know in terms of kind of technical technical markets,
you're starting to see that within the asset class.
Speaker 3 (19:39):
What do you think their appetite for a risk asset
like this is, because you know, down down thirty percent,
like it's asking a lot of a boomer specifically to
hang in there, right, Like how how you know, like,
what's what's the appetite the real appetite to take a
(19:59):
loss or write it.
Speaker 4 (20:02):
Yeah, the key is education, Right, how much did you
allocate and why was it cocktail party discussion or was
it true fundamental asset allocation that you said, Look, this
is new, it's volatile, I should own it and a
certain percentage you know that is either market cap weighted
benchmark weighted. But if you're over allocated and you see
(20:22):
this volatility, people should understand what those risks are going
to lead to. Right.
Speaker 2 (20:27):
We looked I just finished a book project on this.
We looked into this. If you held bitcoin for four
years at any time of its life, you made money
if you had a four year holding period, But once
you get below four years, it's up in the air.
You might have made a lot of money or lost
a lot of money. So it seems like a four
year holding period would be like, if you can't commit
(20:48):
to four years, don't buy it. That would be my advice.
The other thing is we have this thing called the
modern portfolio where we have found that a lot of
portfolios have gone to the core is you know, low
cost probably cheap beta or cheap smart beta, or even
cheap active. But it's like that's the vanilla stocks and
bonds usually now that's below twenty BIPs. But then that's boring, right,
(21:09):
you gotta wait thirty years for compounding, So people want
some fun in speculation, So we call it the hot
sauce bucket. It seems like if you put some of
this in your hot sauce bucket at two three percent,
then if it goes down, it's not the end of
the world because it's not really your nest egg, and
so there might be more intestinal fortitude you can get
because it's only a little tiny part and it's not
(21:31):
your nest egg. That's my thesis on how like this
ETF thing has lowered fees and made it very easy
and education is there that it's like, oh, I can
marry this low cost ETF like pebus, which is like
cheap beta, and I can just like wait thirty years
while it like compounds, and then I can do this
other stuff. And like the fact is like people can
(21:52):
get real committed to a portfolio now versus back in
the eighties when you had a five star manager. They
charged the lot, then they underperform it, like you had
to dump them and you just dump them at the bottom.
Then you've got the next one after they had already
had their good run. So people were constantly buying high
and selling low. I feel as though ETFs and low
cost investing in particular have in a way solved behavior
(22:13):
and allowed not only for holding long term vanilla, but
even having more stomach for the hot sauce because it's
only a tiny part of the whole meal. Does that
make sense? Am I onto something there? Or just am
I losing it? No?
Speaker 4 (22:27):
I'm I'm right with you. I think I would shake
that into kind of this this evolution of creating active
or putting active decisions further down the advice chain. Right,
it's not just the manager, it's the advisor, it's the investor,
and the ETF is creating more liquid, more accessible tools
for you to express those active bets, whether it's new
(22:50):
emerging asset classes or even fixed income. Right, fixed income,
you have pretty good success on the active side of
active managers, somewhere above fifty percent on a near term basis.
But investors now have the ability to overweight or underweight duration.
They could overweight or underweight credit. They can take a
(23:10):
core like an ad aggregate, you know type strategy, and
they can play around the edges, and that's what the
ETF does, and through the underlying gives you better execution,
better liquidity, better pricing to sourcing those those exposures.
Speaker 3 (23:25):
But how do you feel about Eric's hot sauce metaphor.
Speaker 4 (23:28):
I've always loved the hot sauce and we always want
to get more more tickers in the hot sauce category.
Speaker 2 (23:33):
That's why I roll with it. I've gotten pretty good
feedback on it. Like I also think you can't mess
with it. Like everybody knows what hot sauce is. Everybody
knows using small doses. Not everybody loves it. It just
like it's really it's a it's solid ol.
Speaker 3 (23:49):
Sorry, as you just said, though I love more tickers
in the hot sauce category. Is that where the white
space is? And how do you distinguish yourself in that
hot sauce category?
Speaker 4 (23:58):
Sure, I let er stick with the hot sauce, but
for us, it's emerging trends, right, so.
Speaker 2 (24:03):
They have hot sauce.
Speaker 4 (24:04):
We level on a minute.
Speaker 2 (24:06):
Ten is hot sauce. I'm sorry, it's like twenty solar stocks.
I'm sorry, that's gonna be like two three XCSMP. Thematic
is hot sauce. It's mild hot sauce. It's not like
ghost pepper, but it's still hot sauce.
Speaker 4 (24:18):
So totally agree. Hot sauce had been thematic right first
to market new ideas AI for us, you know, blockchain technology.
Even banks recently have been called it hot sauce or
emerging trends. And we've seen that again investors not looking
at thematic to get in and run returns, but starting
(24:39):
to allocate and using thematic as ways to differentiate their portfolios,
ways to generate active returns because you've got some of
that differentiated profile. So thematic, which used to be hey,
let's be first to market, let's raise the biggest etf
has started to compete to again a more mature market
where investors are using it for for hot sauce eric
(25:03):
or for for outsized returns.
Speaker 2 (25:05):
By the way, can I fun fact here? I believe
power shares started the first thematic etf ever. Can you
name it? Can you name it? You might not know.
This is going way back before you investment even acquired them.
Speaker 4 (25:19):
If I grab a drink of water, would I be around?
Speaker 3 (25:21):
Yes? Wow? Water.
Speaker 2 (25:24):
It came out in like two thousand and five or so,
get this, it's p h O. But they should have
the Vietnam ETF should trade you. You should be just
h O or something and give foe to them. Anyway,
that's just something that I always though.
Speaker 4 (25:39):
We evolved to numbers H two oh at some point, yeah,
that's it.
Speaker 2 (25:42):
That would be perfect. But the water ETF, get this
has two billion dollars. You know why because at some point, Joel,
water is going to be a big deal. Hopefully it's
after we're gone. They're going to be fighting wars over water.
This thing could go to the moon. But it's just
that when.
Speaker 3 (25:58):
It's like the graduate, I've got one more for you,
only it's not plastic.
Speaker 2 (26:01):
It's it's water. Well that's what they call it. Blue gold. Yeah,
I've I did a lot of research on water. I thought,
oh my god, this is the big thing. I wrote
all these articles and it's like you could get that.
This is one of those calls you can get right,
but be like fifty years early. Remember you know the
movie water World. That's what that was kind of all about. Anyway,
we could have water could be the best performing ETF
(26:22):
in history at some point in the future. We just
don't know when I.
Speaker 3 (26:27):
Could say that about a few other things, probably, but
I like it. I like your enthusiasm. Yeah, okay. So
one thing that we've touched on but we haven't actually
really spent some time talking about it yet. It is
an ETF that probably needs no introduction, but the cues
(26:50):
Eric calls it the eighth wonder of the world. Yes,
it has it gone up at all? Can it be
like seven through six? Yeh? Or does it have to
be eight? Still?
Speaker 2 (26:57):
Well there's seven one? Yeah? You yeah, come on, you
definitely know that. Okay. The reason we call it that
is also because it's like an unusual specimen like the
you know, typically you have an index since market cap waited,
and it's like, okay, that's beta. Beta does really well.
Then you have like the tech sector. Okay, great, tech
is good. Ques is neither one of those. It just
(27:18):
stocks the list on NASDAK. So it's like, what's so
great about that? Well? I thought I pondered this more
than most, like more than an rural person should. My
thesis on the why que job? Actually yeah, it is
my job, but this is I went real deep my
thesis on why the ques kick so much butt and
(27:39):
it's not tech and it's not beta and it's just
these stocks that listens on NASAK. Is the Steve Jobs effect.
When Steve Jobs in nineteen eighty called you guys, I
asked your PR person, Stephanie, if I could even find
the person who took this call, but they said they're
probably retired at this point, like or even worse. But
in nineteen eighty somebody took a call from Steve Jobs.
(28:00):
He said, I want to listen to NASDAK and they
were like, sure and appen. Nobody who appened. Steve Jabs
is twenty seven years old and he wanted to list
there because all the dorks from IBM were unicy, so
he wanted to go to NASDAC, just like Michael Jordan
went to Nike instead of Converse and Adidas. This was
the Jordan Nike moment of this market. Once Steve Jobs
(28:21):
went there, people were like, ooh, that must be the
place to be. So of course Bill Gates, who worshiped
Steve Jobs, he went there when Microsoft went public in
ninety three. Then he got those two guys there. It's
over since then, especially when Steve Jobs came back for
his third act, that has been the place to be.
Amazon Tesla. If you are a visionary founder, CEO who
(28:42):
works seven days a week, that's where you go. Steve
Jobs set that he was the mold of this tech
revolution and to me, that's why the cues kicked so much.
But it's the Steve Jobs follow effect thoughts.
Speaker 4 (28:59):
Fully green the NASZAQ one hundred, as we've talked about
smart Beta, it is an index, but for us, we
track it based on innovation and innovation as a factor
that we track is on R and D research and development.
And if you looked at those hundred names, each of
those companies commit more to research and development than any
other peer group. So it's founded in innovation, it's founded
(29:21):
in differentiation, and I think going back to original days
of Apple to Microsoft to what we see today, it's
truly evolved with the modernizing economy, right, so going from
PCs to servers, to telecom bandwidth to having a PC
in your hand that's mobile and getting into AI that
(29:42):
you speak to on your phone for twenty five years,
it's evolved with not only personal consumption, but the evolution
of our modern economy, and the leaders that are driving
that tend to be listed on nasdek.
Speaker 2 (29:56):
Can you pull some strings and get us this person
who took the call in nineteen. If we can get them,
Joel said, he will do a whole podcast Ken Burns
type documentary on this. But we need that person. Can
you pull some strings for me, some digging? Yeah, I
mean yeah, or reach out? If you're like, did they
know the importance of that call?
Speaker 3 (30:15):
No, I'm guessing not. You know, like I think it's
just another phone call where you're like, yeah, sure, whatever,
and then everything else that follows you're like, oh, I
love you that stuff. Though, we'd love to find and
interview that person. As long as we're talking about QUES,
probably can't talk about that without talking about the Unit
Investment Trust, the u I T, which is basically the
framework that QQQ is built on, and not that many
(30:38):
others like one. That's right, Uh, if you could have
a redo, is there anything more in your life that
you would rather have a redo on than Q being
a u I T.
Speaker 4 (30:47):
Sure? Well, of course you want the ETF market to
be started, right, So thank you for the pioneers in
that regard. But like many things, markets evolve, structures evolve,
regulations evolve, and we've seen that through route the last
twenty five years in the ETF market to get to
some level of standards standardization. There was a time at
which some had exemptive relief and some didn't. So early
(31:09):
entrants that had that relief were able to launch ETFs,
others were not. So evolution is is great, and you
know that's that's an opportunity for some of these unit
investment trusts to modernize their structure and and and you know,
bring bring the structure and the ETF ecosysm ecosystem into
(31:30):
that investor base.
Speaker 2 (31:32):
So our outlook, which we published this month, basically is
ETFs are living the dream, but reality checks await. So
we don't think this big movement is going to be
dampered much. Market going down a little, maybe it's like
a little less record breaking. But there's a couple of
things out there, like, for example, some stocks are real
(31:55):
volatile and they get two XD and one of those
probably will blow up. There could be something there the
mutual fund share classes that are adding ETF share classes.
There could be some tax contagion there where the ETF
gets capital gains because of the mutual fund. There's a
couple of things that I think are maybe possible stories
Also just the paradox of choice, so many products that
(32:17):
it's just hard to pick.
Speaker 3 (32:18):
I call it the breadee, the bread ale. What what
am I going to do? Which which type of bread
is am I going to use?
Speaker 2 (32:23):
So those are some of the things we're looking at
as like what could be some hiccups. We don't see
anything derailing it. But what do you make of that?
Like what keeps you up at night? What are you
looking at, whether it's your own firm or the industry
as a whole.
Speaker 4 (32:35):
Sure, I think ETF share class is a is a
great opportunity to uh to integrate, you know, structures and
bring some of the advantages that ETFs offer into mutual funds.
But I've I've been out there saying that there's pure
and less pure. Right, So an ETF that only has
its own not share class, but trades as an ETF
will take advantages of all the tax ability, all the liquidity,
(33:00):
the track record and the like. Pivoting into the share
class is complex, and that's why you've seen some of
the reviews. The industry come together to identify what the
solution is and what would look like a preferred outcome
for investors. And there's still quite a bit of uncertainty
there from not only wealth channels, but issuers as well.
(33:23):
Because you have to be transparent. Some managers don't want
to be transparent. We've seen that. We've tried that, and
non transparent the market didn't really respond to it. You
have to have the right pricing. You don't have to
be the lowest cost, but there could be price impacts,
so you need to look at economics and the impact
of that overall, and you still need to provide returns.
(33:43):
Just moving it into an ETF doesn't guarantee success, so
differentiated active strong managers quality investment performance is still going
to drive the day.
Speaker 2 (33:54):
Yeah, you got it tough enough. I always say you
have to come to the ETF industry on it's terms,
not yours, and not everybody wants to do that. Said,
we could be. We did the math. There's about three
thousand mutual funds that currently don't have any ETF where
the issuer has no ETFs at all that have filed
for the share class. So there's potentially three thousand new
(34:14):
ETFs that could just be bolted onto a mutual fund.
Probably won't be that many. That's a big deal, Joel,
I mean it just might take a couple of years
to play out.
Speaker 3 (34:23):
Though how much of twenty twenty six are we going
to be talking about.
Speaker 2 (34:26):
This a lot? I think DFA is going to be
the guinea pig. They're really pushing it. It fits their
whole business and plumbing perfectly this particular thing. But if
they see success, look out especially you know, it's tricky.
There's one caveats all this. And I'm not sure if
you thought about this, but Capitol Group, they were on
ETFIQ they said, we're not doing anything. We don't believe
(34:48):
in this, and they're the biggest active manager on Earth.
I mean, they're the number one, So what they say matters.
And if they look at this and said we're just
going to put ETFs out there separate from the mutual fund,
that's also Capital Groups of why non transparent active I
think didn't take off because when they finally came in,
they went transparent, and so that's also interesting. So I
(35:09):
don't know, but all I know is if cope you
will find success, the rest will rush in. But that
the first part is we don't totally know.
Speaker 3 (35:16):
What does success look like, Brian.
Speaker 4 (35:18):
So I think success is bringing more quality investment capabilities
to investors through the optimal wrapper, and that's what we're
looking at. We're on a very focused pace in our
own path of share class, and that's looking at it
very opportunistically, not ETF share class for all type of approach,
but bringing you know, where it makes sense, where we
(35:41):
think we can have the liquidity and where the managers
can operate within the structure. So I think you're going
to see and each each manager has a different strategy, right,
they have a different path and they've come down a
different road. Some have large active and they might say, hey,
we're just going to cannibalize ourselves. We're going to try
to get pivots into to somewhat similar but differentiated strategies,
(36:02):
not cloned, and that's our best path forward to avoid
maybe a difficult decision. Others just want to get into
the ETF space, right, so they want to launch and
find a way to get into that market. But not
all will succeed because there are again i'll speak to
the ecosystem, they're trading implications, cost implications, liquidity implications that
(36:24):
managers need to weigh trod them.
Speaker 2 (36:27):
And another thing is the transparency thing is a big
deal for some because they spend their whole life picking
these stocks and they feel like it's their ip. But
I have found that I don't think anybody cares. I mean,
I give ARC a lot of credit. They came out transparent.
She even shows you what the trades were that day.
I mean, it's full transparency, and I just think that's
(36:48):
sort of what people demand in their ETFs. It's sort
of like an attribute of an ETF. They're used to,
so they don't want it to be different. But some
managers just I think it's hard for them to get
over that, but I think they should. Nobody cares. Nobody
cares if you have Amazon at three percent and the
market has like the S and P's at like six percent,
like nobody cares. It's like they're just gonna look at
the returns. So I just think it doesn't matter anymore.
(37:11):
There's so many portfolios. Back in the day, it was
like Jeff Finnick managed the Filly Magellan and it was
like that was like so big and if he if
he showed his holdings, you could get ahead of it.
Like there was some legit issues. I don't really see
that those days are over, so I think they should
just come in try it. This is the technology. Everybody
wants to use it. It's the equivalent of Spotify. It'd
(37:34):
be like being in a band and like refusing to
take your music from compact disc and putting it on Spotify,
Like why would you do that?
Speaker 3 (37:40):
Still some people to do it.
Speaker 2 (37:42):
I know, well no, Like Neil Young is like, listen
to my music on analog. It's like, okay, fine, Harvest
Moon sounds two percent better on analog, but like, I'm.
Speaker 3 (37:50):
Sorry more than two percent, but I hear you.
Speaker 2 (37:53):
By the way, Harvest Harvest is the better album. That's
the one from nineteen seventy three with Old Man. That's
a good album and it does sound good on vinyl, all.
Speaker 3 (38:02):
Right, Brian, Final question, favorite ticker other than any of Invesco's.
Speaker 2 (38:09):
Wow, I take your time?
Speaker 4 (38:11):
I need a ten second count?
Speaker 2 (38:13):
No, where did it take your time?
Speaker 3 (38:16):
I'll motion with my hand to just like pretend that
it's a shot clock. Well, you like the ref and
the it's like five seconds.
Speaker 4 (38:25):
You know, I'm going to bring it back to Invesco.
But it's your favorite too. What so most creative ticker?
I can't give too much credit outside of our own
our own home cooking PBJ.
Speaker 2 (38:38):
Wait a second, that's your ticker.
Speaker 3 (38:40):
Right, oh, favorite other than yours?
Speaker 4 (38:42):
I know I pivoted.
Speaker 3 (38:43):
Yeah, he can't do it, so PBJ.
Speaker 2 (38:45):
Matt Kaufman, who's from Wheaton, which is where the Power
Shares people grew up. He picked PBJ, which I thought
it was a good one.
Speaker 3 (38:53):
But I'll give it to you if you can answer.
Do you prefer the crunchy or the creamy version of
peanut butter?
Speaker 4 (39:00):
You always gotta go creamy. Yeah, that's how crunchy is interesting.
The real question is strawberry or great and then jelly
or jam? So many decisions. Maybe there's an analyst.
Speaker 3 (39:10):
Yeah, PVJ.
Speaker 2 (39:11):
Just wrap it up in it or that that stuff
that comes where you you suppress it and both come
out at the same time.
Speaker 3 (39:17):
Its gross.
Speaker 2 (39:18):
Not for me. I'm fine with that. Well, you have
another thing. When you get the jelly and the peanut butter,
do you use two different knives or do you like
how do you deal with that peanut butter?
Speaker 3 (39:28):
First, take the peanut butter all the way off on
the bread, and then you do the jam.
Speaker 2 (39:31):
You cannot possibly get all the peanut butter off without
breaking the bread.
Speaker 3 (39:34):
And you can watch me, okay, give you a tutorial.
Speaker 2 (39:37):
That's That's what that thing solves, is having to use
two knives. It's annoying.
Speaker 3 (39:40):
But because I do.
Speaker 2 (39:42):
Peanut butter and jelly like probably once a week, and
I watched the whole knife off and I'm like, they
that's where the guy who came up with that one
you pour both together, That's what he was.
Speaker 3 (39:52):
There's a paper towel that you can also do. But
by the way, this is the cutting room floor for
this episode is going to be well.
Speaker 2 (40:00):
But there is a metaphor there which sometimes ETFs make
something like the two x ETFs. They make something just
a little bit easier, and that's sort of similar, like
because we always tell people like why is this so popular,
I'm like, honestly, dude, people are lazy. If you can
make something just a touch easier, like, you're gonna get
some buyers. You know who said that? And Dorsey, right,
(40:21):
Tom Dorsey, he was like he was talking.
Speaker 3 (40:24):
About how what are you bringing back to smart Beta?
Speaker 2 (40:27):
Yeah, Tom Dorsey from my book, he was like, he
really highlighted the convenience aspect of ETFs big time. He's great,
He's got a hope. Following Yeah, he's part of their stable.
Speaker 3 (40:38):
Yeah, Brian, thanks for joining us some Trucks, Thanks, Guess,
Thanks for listening to trucks. Until next time. You can
find us on the Bloomberg Terminal, Bloomberg dot com, Apple Podcasts, Spotify,
or wherever else do you like to listen. We'd love
to hear from you. Hit us up on Social. Trillions
(41:00):
is produced by Magnus Hendrickson and Ryan Kessler. Amy Keene
is our executive producer. Sage Bauman is the head of
Bloomberg Podcast. Bye b
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