Wylie Tollette: What Most Investors Get Totally Wrong About Risk

In this episode of The Blunt Dollar, I sit down with Wylie Tollette, Chief Investment Officer of Franklin Templeton Investment Solutions. 

Wylie oversees over $160 billion in multi-asset portfolios and has spent his career bridging investment strategy, operations, and leadership, from CalPERS to Franklin Templeton.

But this isn’t just a CIO talking markets. This is a conversation about trust, transparency, and the invisible infrastructure that makes long-term investing work.

We dive into Wylie’s unusual path from CPA to CIO and unpack the habits, frameworks, and philosophies that have shaped his career at the highest levels of finance.

We cover:
📊 How technology is transforming the front and back office
🧭 Why transparency is more than a compliance buzzword
🏛️ What it’s really like working inside a giant public pension fund
🛠️ The tension between risk models and real-world decision-making
📚 What operations can teach us about strategy
🤝 How to bridge the cultural gap between portfolio managers and tech teams
🧠 What keeps Wylie curious after 30 years in the industry
🧩 Why asset owners are becoming the real drivers of investment innovation

If you're leading an investment team, rethinking your tech stack, or just curious about the machinery behind global portfolios, this one is packed with insight and clarity.

Oh, and if you haven't already... subscribe to The Blunt Dollar for more raw and honest finance conversations.

New episodes drop every other week! Available on Spotify, Apple Podcasts, and wherever you get your podcasts.

And last, but not least, don't forget to follow me on LinkedIn: https://www.linkedin.com/in/ignacio-ramirez-moreno-cfa/

Enjoy the episode!

Disclaimer: This podcast is for informational and educational purposes only. It does not constitute financial, investment, or legal advice. Listeners should consult a qualified financial professional before making any financial decisions.

Episode Transcript

Speaker 1 (00:00):
Probably the most fundamental lesson of investing,
which is that you don't reallychoose the returns that you want
.
You can think you're choosingthe returns that you want, but
really what you're doing ischoosing the risks that you are
willing to take, and the returnsare sort of the result set of
the risks that you choose howlong before I lose my job to AI.

(00:20):
There will be roles that willbe displaced to AI, but I think
the folks that learn how toleverage it for their own
benefit, that's the key.

Speaker 2 (00:30):
Wiley Tullett, executive Vice President and
Chief Investment Officer atFranklin Templeton.
Wiley's had a fantastic careerthat's taken him from a
24-year-old CPA managing a $300million bond portfolio during
the savings and loan crisis toleading investment operations at
CalPERS, the largest publicpension fund in the US, probably
the most dramatic shift hasbeen an opportunity for

(00:55):
mispricing in the public.

Speaker 1 (00:56):
Markets has continued to shrink the way I think Peter
Bernstein said it well.
He said markets can getmispriced at a macro level and
it takes millions of investorsmoving at the same time to reset
prices at a macro level.

Speaker 2 (01:17):
This is the Blonde Dollar with Ignacio Ramirez.
Quick disclaimer the views andopinions expressed in this
podcast are those of thespeakers and do not constitute
financial investment or legaladvice.
This content is forinformational and educational
purposes only and should not berelied upon as a substitute for

(01:39):
professional advice.
Always do your own research andconsult a qualified advisor
before making any financialdecisions.
All investments involve risk,including the potential loss of
capital.
And now let's get started withthe episode.
Welcome everyone to a newepisode of the Blunt Dollar.
Today we're joined by WileyTullett, executive Vice

(01:59):
President and Chief InvestmentOfficer at Franklin Templeton
Investment Solutions.
And chief investment officer atFranklin Templeton Investment
Solutions, wiley's had afantastic career that's taken
him from a 24-year-old CPAmanaging a $300 million bond
portfolio during the savings andloan crisis to leading
investment operations at CalPERS, the largest public pension
fund in the US, to nowoverseeing multi-asset

(02:22):
investment strategy at one ofthe world's largest asset
managers, franklin Templeton.
Along the way, he's workedacross investment, risk,
performance, analytics,governance, asset allocation and
build and lead teams throughperiods of real market
turbulence.
In this episode, we'll talkabout the new rules of asset
allocation, how investors shouldbe thinking about markets and

(02:44):
the role asset owners shouldplay in an AI-driven world.
We'll also get personal, ofcourse.
We'll talk about his path intofinance, the sailing dream that
almost stole him away, and whatwinemaking, surfing and mountain
biking in Santa Cruz can teachus about risk resilience and
staying grounded in volatiletimes.
So, whether you're a CIO, anadvisor or just someone trying

(03:07):
to figure out where the hell wego from here, this one's packed
with wisdom, perspective and,hopefully, some good laughs too.
Wiley, it's an absolutepleasure to have you on the show
.
Welcome to the Blunt Dollar.

Speaker 1 (03:21):
Thank you, Ignacio.
Happy to be here.
Thank you, Ignacio.

Speaker 2 (03:25):
Happy to be here.
Thank you, thank you, andbefore we dig into all of these
topics, quick promotional ad,I'd say the reason why Wiley and
I are talking today is becausethe CFA Institute put us in
touch.
Why?
Well, because we're both goingto be attending the CFA
Institute Live Summit in Chicagofrom the 4th till the 7th of

(03:45):
May.
It's going to be absolutelyamazing.
We're going to have over 1,200finance professionals talking
about some of the major themescurrently shaping markets.
So if you work in the industryand are into meeting other
interesting people, make sureyou come.
Wiley is going to be there, I'mgoing to be there, and there's
going to be many, many, manyothers attending too.

(04:05):
So make sure to check out theevent online CFA Institute Live
Chicago from the 4th till the7th of May.
So, wiley, I suggest we startby talking about you.
What is it that you do exactlytoday?

Speaker 1 (04:20):
Yes, I lead a team.
We have about 140 folks locatedin 12 different locations
around the globe managingmulti-asset portfolios for
retail, institutional endowments, foundations, pension funds,
mutual funds, etfs around theworld, and it's been a fantastic

(04:42):
experience and it's been afantastic experience.

Speaker 2 (04:44):
Can you maybe walk us a little bit through your
career journey?
You've had a fascinatingnonlinear path.
I'd say you did accounting,then you went to RIS, then
performance and ultimately nowyou're in the C-suite.

Speaker 1 (05:07):
How did you go basically from accounting to
leading a huge investment teamat Franklin Templeton?
Yeah, that's a great question.
It's definitely a nonlinearpath.
I look back on it and it sortof makes sense.
It seems to all connect.
But at the time, of course, itwas just making decisions that
seemed like the right ones atthe time.
But so, really, my initial pathinto investment started I was

(05:28):
working for KPMG, a bigaccounting firm, and it was the
tail end of the savings and loancrisis, as you mentioned, in
the US, and it was 1994.
No-transcript, I was literallyresponsible for managing about a

(06:14):
$300 million sort of liquidassets portfolio that the bank
had because they had let go ofthe previous staff and, frankly,
I didn't know what I was doing.
So I had to, I had to basicallygive myself a crash course in
investing.
I bought books, went home and,uh, just read, uh, you know,
studied everything I could thisis pre-internet, so books were

(06:37):
the key and uh, you know, triedto learn from some of the staff
that did that was still there,uh, and basically we did okay.
I have to say I I'm proud ofmyself for for, uh, not buckling
under the pressure, but thatwas my first taste of investing
and I, it really hooked me atthat point.
And then in 94, that's when, uh,franklin Templeton uh was

(07:03):
really growing quickly.
I, franklin Templeton, wasreally growing quickly.
I started in the San Mateooffice and then very quickly
moved to the Rancho CordovaCalifornia office, which is near
Sacramento, and they had openedthat office because, basically,
in response to the earthquakein 1989, they wanted another
site that was sort of lessearthquake prone so that they
could recover operations if theyneeded to, and so started there

(07:27):
and basically stayed for.
Well, it's been 30 yearselapsed time, if you kind of
take away my four years atCalPERS.

Speaker 2 (07:36):
Wow.
So it's not like you were sevenyears old and you said I want
to be the CIO of a big assetmanager.
No, I didn't.

Speaker 1 (07:43):
I really didn't, honestly, at the time.
I think I joined Franklin whenI was 27.
And I think I got the rolemanaging the bank's liquid
assets portfolio when I was 24,25.
So I was literally just a kidand I didn't really know which
sort of path to take.
And maybe that's a good lessonfor other folks that are earlier

(08:06):
in their careers that aren'texactly sure if they're on the
right path or know whichdirection to go, which is you
know.
I look back on it now and itall makes sense, but at the time
I remember thinking I don'tknow which way I want to go, but
this feels like the rightdirection and decision.
It was kind of more of a gutfeel thing really.

Speaker 2 (08:28):
What I think is super cool with your profile is how
you've done like many, manydifferent things that kind of
give you a 360 view of the assetmanagement business.
I don't think there's many CIOsout there that have such a wide
range of experiences, so Iwanted to ask you what are some
of the biggest lessons thatyou've learned along the way,
that shaped the way you leadtoday, that you learned from

(08:51):
doing all these different jobsover the years?

Speaker 1 (08:54):
Yeah, that's a very sort of kind way to put it.
You know it looks like a sortof a career assembled through a
lot of different steps, but yeah, so when I joined Franklin I
was in the funding accountingdepartment and that really
taught me how, basically, howmarkets work, because we had to
price every security and everyfund every day.

(09:16):
You know thousands ofsecurities and some which were
easy to price just pull thisprices right off the market and
some which were tough.
So I quickly learned, you know,that a lot of sort of alpha
excess return lives in thecorners of the markets that are
less well covered, where pricesare harder to find, where the

(09:37):
opportunity for mispricing isgreater.
And this is back in the 90s and, frankly, there was still quite
a bit of mispricing to be foundin sort of the darker corners
of the market, the more illiquidparts, high yield bonds at the
time, for example, small capstocks.
There was just a lot ofopportunity to find mispriced

(09:59):
securities, buy them cheap orsell them high, and that was a
neat opportunity to see early inmy career.
And then I started to work inthe technology group helping to
implement investment technologyat Franklin and I got the
responsibility to roll out aglobal trading system, because
Franklin had been growingthrough acquisition and buying

(10:19):
all these different companies,and they were all over the world
and there was some concern that, you know, something was going
to happen in some far reaches ofthe planet and it was going to
cause a scandal or we were goingto have a trading event that we
didn't know about.
So we implemented a globaltrading system and that got me,
you know, a front row seat withliterally every portfolio

(10:40):
manager and trader in the wholecompany.
And that's where I learned allthe different styles of
investing, the differentapproaches, some more
quantitative, some morefundamental, some very seat of
the pants.
Again, this is early 2000s,like 2001, 2002.
Part of that actually alsoincluded implemented a trading
system for our high net worthsubsidiary, which happened to be

(11:04):
located in the World TradeCenter, and so I spent quite a
bit of time in the World TradeCenter in New York in 2001.
Obviously, I was not there on9-11, but many of my friends
were, which was a very difficultday, and then having to recover
that part of our company rightafter 9-11 was one of the most

(11:24):
memorable and formativeexperiences of my career.
You know, and I really saw, uh,how people rallied, uh, to try
to get things up and running, uh, how people were able to jump
into other jobs that they neededto do, and really what that
taught me was, um, sort of asense of entrepreneurial spirit,
like, just get the job done.

(11:45):
You know, there was a saying atthe time, which was he who sees
the snake must kill it, whichwas a good lesson to learn,
because it was just a matter ofthe people that sort of knew how
to do things.
We just had to do them and getit done quickly to recover from
that.
Following that, I got anopportunity to build out the

(12:08):
investment risk function, whichreally I just so enjoyed.
That was about 2004.
And I ran the investment riskfunction.
I built and ran the investmentrisk function at Franklin until
2014.
And that really taught me reallyprobably the most fundamental
lesson of investing, which isthat you don't really choose the

(12:29):
returns that you want.
You can think you're choosingthe returns that you want, but
really what you're doing ischoosing the risks that you are
willing to take and the returnsare sort of the result set of
the risks that you choose.
And you know, across thespectrum of risks, you name the
market risk, currency risk, youknow systemic risk, interest

(12:57):
rate risk there's just risk is afascinating subject and I came
away from that with kind of alittle saying which is the risks
that you're taking, they shouldbe recognized, rational and
rewarded.
And recognized means theyshould be intended.

(13:18):
You should understand the riskNow.
Don't take unintended risks.
That's very, very common in ourbusiness.
Don't take unintended risks.
That's very, very common in ourbusiness.
Rational means sizedappropriately and basically not.
You want risks that aren'tgoing to basically sink you if
it doesn't go your way, but aregoing to benefit you if they do

(13:40):
go your way.
So that means sizing themcorrectly, and rewarded means
they have the opportunity to becompensated.
There are risks that you cantake where, literally, the
opportunity for compensation isnot there.
So why take it?
And that really carried me intoCalPERS and I worked on
something very similar when Igot to CalPERS, but I'm sure

(14:02):
that's another questionsomething very similar when I
got to CalPERS, but I'm surethat's another question.

Speaker 2 (14:10):
Yeah, that's pretty cool and I want to bounce on
that risk Part of theconversation that you were
alluding to.
What is the risk that is thehardest to price, in your
opinion, from all your years ofexperience?

Speaker 1 (14:19):
Illiquidity.
Illiquidity is really tough andit's very prevalent in the
markets.
I had some experience with theliquid assets at Franklin
Templeton, as I mentioned, butwe were primarily invested in
the public markets corners ofthe public markets that I

(14:46):
mentioned earlier, like highyield bonds or things like that.
Or through the financial crisis, we certainly saw the liquidity
you know in CLOs and CMBS and avariety of other securities
that really were basicallyliquidity dried up.
But moving to CalPERS, ofcourse the vast majority of the
active risk is in the illiquidportfolio.

(15:06):
Active risk is in the illiquidportfolio, the private markets
Fascinating portfolio.
Calpers owns everything.
They own timberland.
They own at the time we had afew vineyards in the portfolio.
They own real estate across theworld in a wide variety of
locations and different types ofreal estate.
They owned private credit,infrastructure, toll roads,

(15:27):
power grids, so you can thinkairports, I think at the time we
were there we owned part ofGatwick Airport in London.
So it was just a fascinatingportfolio.
But understanding and trying toestimate the prices of things
and how and if you couldactually sell them if you needed

(15:50):
to was just tremendouslychallenging.

Speaker 2 (15:54):
And it remains a challenge.
Yeah, that's one of the bigcriticisms of private assets
today, right, like the lack ofprice discovery and the lack of
mark-to-market.

Speaker 1 (16:12):
Yes, that's a facet, Ignacio, it's.
You've just nailed one of themost fascinating conversations
that we had when I was atCalPERS and I was privileged you
know, I was privileged to bepart of it and basically you
know a lot of the private and Ihad never heard this perspective
but a lot of the folks thatwere experts at investing in the

(16:34):
private markets.
Their contention and they hadsome good arguments for this is
that the private marketsactually were a better gauge of
long-term value that the publicmarkets that stock markets,
exchanges, bond markets.
They were too twitchy, theywere too subject to human

(16:54):
emotion and frailty and bias butreally that was not the correct
way to judge value because itwas too volatile and it really
wasn't a good for long terminvestor like CalPERS.
It really wasn't a good gaugeof long term value, whereas the

(17:14):
private markets that weren'tpriced daily you know priced
quarterly or annually based onappraisals and you know actual
transactions, which wereinfrequent, was actually better,
obviously less frequent andperhaps less.
I think that obviously, ifyou're a quantitative person,

(17:36):
the amount of data that you haveto chew on in the private
markets is pretty scantycompared to what you can get in
the public markets, is prettyscanty compared to what you can
get in the public markets.
But it was just really a factand there was no clear answer to
that question.
Who was right?
Were the private markets folksright, saying that long-term
value and long-term appreciationopportunity was a better gauge

(18:01):
of value Because they had somegood points?
The public markets are twitchywas a better gauge of value than
the because they had some goodpoints.
You know, the public marketsare twitchy.
It can be subject, you know, todaily news flow and and if you
sell it today, who's to say thattomorrow you couldn't sell it
for twice as much?
Just based on a few, you know,tweets from somebody.
Um, you know, and so they, theyreally did have a have a point.

Speaker 2 (18:23):
I also love that you talked about liquidity.
I was hoping you would talkabout that.
I'm a fixed income advisor, sofor me, you know, liquidity risk
is one of the big ones.
I always like to say thatliquidity is one of those things
that no one talks about, untilit's literally the only thing
that everyone talks about, right?
Yes?

Speaker 1 (18:42):
exactly.
That is exactly right.
And when it's not there, that'sthe other thing.
I think and you're quitefamiliar with this, if you're
familiar with fixed incomemarkets it can be there in
spades on Monday and becompletely absent on Tuesday

(19:12):
Tuesday, just based on the waymarkets work, and it's just a
fascinating thing.
And so I look at liquidity riskin the fixed income markets
actually today as one of sort ofthe what I call like canaries
in the coal mine.
When a market stress If you seefixed income liquidity and some
of the further reaches in thefixed income markets high yield
bonds or, you know, voting ratenotes, things like that when

(19:32):
liquidity and those dries up,that is usually a pretty good
indication that the market, thebroader market, is going to
start to see some stress yeah, Ialso think it's really hard to
measure liquidity risk in fixedincome markets.

Speaker 2 (19:46):
There's no perfect indicator.
I mean, as you know and as ourlisteners probably will know,
public bonds are traded over thecounter.
Yes, they're not listed, soit's tough.
There's some people trying tocreate some indicators, like.
There's a liquidity indicator,for example, that Bloomberg

(20:07):
created.
You can also look at bid offerspreads, you can look at
outstanding amounts for bondsand so on and so forth.
But, as you were saying,sometimes all of these look fine
and all of a sudden you try toplace a trade and no one's on
the other side and you justfigure it out on the spot when
you're trying to place the order.
So it's a tough one, but I alsofind it really fascinating and

(20:30):
part of the beauty ofparticularly of the asset
clients I work in, which isfixed income.

Speaker 1 (20:37):
I would agree with that completely.
Everything you said and youknow it's actually that's been
one of the interesting storiesover the last several years is
just sort of the resurgence offixed income as an asset class.
When I was at CalPERS from 2014to 2018, I think the treasury
the 10-year treasury was tradingsomewhere in the twos, you know

(20:59):
, and so it was pretty modestreturns and after inflation it
was basically zero.
And so really what I saw wasjust people really trying to
move away from fixed income.
It was still a diversifier.
It still had sort of theportfolio insurance component to

(21:20):
it, particularly sovereignbonds, but from a return
perspective it was particularlysovereign bonds.
But you know, but from a returnperspective it was, it was
pretty measly and so folks weregenerally trying to allocate
into other parts of the market.
You know privates, you know evenjust ramping up equity
allocation, what's been kind ofnice and a bit of return to my
earlier career back in the earlynineties, when I first started

(21:42):
investing in fixed income uh,you know, when the 10-year
treasury was somewhere between 5and 6 and 7, somewhere in that
neighborhood.
We're not there right now, butwe at least have much more
attractive yields across much ofthe fixed income market.
Still not fantastic, but atleast you're getting some
compensation for your investmentin fixed income, along with the

(22:06):
portfolio insurance component.

Speaker 2 (22:09):
I like to say but of course I may be biased here that
fixed income is the mostbeautiful of asset classes.
I don't know if you agree withthat, but I find it's like a
very complete, very roundedasset class, because you need to
know about the companies or thegovernments that are issuing
the debt, but also you need toknow a lot about macro and

(22:31):
interest rates, obviouslybecause there's a direct impact
and correlation between ratesand bond prices.
Plus, you have this illiquiditythat we were talking about and
the fact that it's over thecounter.
It makes it a little bit morecomplex, a little bit more
technical, and I think it'sreally fun, honestly.
And on top of that, you canplay.
You know, you can makeinvestments in all sorts of

(22:54):
economic environments duringbull markets, during bear
markets.
So I think it's a really,really interesting, really cool
asset class, quite frankly.

Speaker 1 (23:04):
I do too.
I actually agree with you.
I started my career in fixedincome, as I mentioned earlier,
and one of the things I likeabout fixed income is it has a
mathematical elegance to it,really, where if you know the
maturity of a bond and the yieldand the current going rate, you
can basically sort of unpackthe expected returns and even to

(23:27):
this day like if you want toknow the best estimate for the
long-term return say a 10-yearreturn on a US Treasury bond use
the current 10-year Treasuryyield.
It's a pretty good estimate ofwhat you're going to earn over
that 10 years.
There are very few other assetclasses where you have that type

(23:47):
of indicator.

Speaker 2 (23:49):
Yeah, this is reliable the visibility over
future cash flows.

Speaker 1 (23:53):
That's really, really that's right, that's absolutely
um go team fix income, let's gouh I know it's good to have
some people speaking up for it,because for so long it was sort
of the unloved asset class.

Speaker 2 (24:05):
But but I'm, I'm I mentioned, I'm really pleased to
see that it's kind of come backinto the forefront, worked with
some of the most or very, verytalented portfolio managers and
analysts, and I was wondering,beyond raw skill, what actually

(24:29):
creates a high performinginvestment team In your
experience, what separates likethe best in class investment
teams from just good ones?
Hey there, quick favor to askIf you enjoy the blunt dollar,
the unfiltered takes, thestories and the laughs.
The easiest way to support theshow is by tapping that

(24:51):
subscribe button right now.
While you're listening, andhere's my promise If you do,
I'll keep bringing you honestconversations, fresh
perspectives and the kind offinance talk that's engaging,
insightful and worth your time.

Speaker 1 (25:04):
Thanks so much for being here and let's keep these
great finance conversationsgoing excellent question and
I've thought quite a bit aboutthat and uh, you know what they?
There's a couple of things thatcome to mind, uh, and I think
it was actually michael jordan,famous us basketball player of
my you know younger era, thatsaid that you know, great

(25:28):
players win games, great teamswin championships, and so I
really look for and this hasbeen an evolution during my
career too.
When I first started it wasstill the era of kind of the
star portfolio manager where youknow, you had individual
portfolio managers that werelike mini celebrities.
The end of, like Peter Lynchcomes to mind from the from the

(25:51):
eighties and nineties atFidelity and even at Franklin
when I started, mark Mobius wasone of our.
I worked closely with Mark andhe was kind of a celebrity
portfolio manager in theemerging markets.
That's right, yeah, yeah, yeah,he was at Templeton and so.
But what I've seen is anevolution and I actually think

(26:15):
it's quite a healthy evolutionto where really focusing on
people, process and technologykind of in that order sure that

(26:35):
they're team players.
You don't want gigantic egos orfolks that really want to
become a celebrity, because thatcould be very disruptive if
you're actually trying to builda team-based investment approach
Process.
Look at the investment process,the decision-making process that
you use.
Because I grew up in risk andperformance attribution, that's
where I always start, which iswhat are the risks that we're
taking?
How much active risk, how muchtotal risk, what types of risk

(27:00):
Factors, countries,concentration, liquidity, all
the different types of risksthat you're taking, both total
and active, relative to thebenchmark that you're trying to
beat, and then understand on avery regular basis through
performance attribution, whetherthose risks that you're taking
are actually getting you'regetting paid for them, are you

(27:20):
getting compensated?
Is your decision-making processsound?
And, if it's not, go back upinto it and fix it.
So that's process.
And then, finally, technology.
Increasingly and I've seen thisevolve through my career as
well that technology is becomingessential.
Finance and technology arebasically weaving into one

(27:42):
common thing, and AI is onlybringing that further down the
path.
But basically, you really can'texpect to compete, much less
beat your benchmark or beat yourpeers, unless you have good
technology on your side.
It's essentially got to be partof the team from the very

(28:03):
inception, and so we reallyfocused on that at Franklin
Investment Solutions and we'veleveraged an internal platform,
building one.
I've been working on this foryears, from the time I first
started working on the tradingplatform at Franklin Templeton
years ago.

(28:24):
More than 22 or 23 years ago westarted working on this, so
technology has got to be part ofthe team 100%.

Speaker 2 (28:32):
I mean, well, I think you're spot on People,
processes and technology and Ithink, even if spot on people,
processes and technology, and Ithink even if you just have two
out of the three, it's not goingto work.
You need, if you want to have asuperstar team, you need the
three of them.
And, by the way, bouncing onwhat you were saying, two things
come to mind.
First of all, you were talkingabout Michael Jordan.
If you listeners don't know whoMichael Jordan is, please stop

(28:55):
listening to this podcast and gocheck him online.
There's a very good Netflixdocumentary, I think it's called
the Last Dance.

Speaker 1 (29:03):
I don't know if you've seen it, the Last Dance.
Oh, it's excellent, isn't it?

Speaker 2 (29:05):
Yeah, I've watched it a couple of times I love it
About the Chicago Bulls duringthe Michael Jordan era, even if
you're not into basketball,definitely worth the look.
Um.
And the other comment uh, youwere talking about mark mobius,
absolute legend within the worldof emerging markets investing.
I need to get him on the showin in some, I need to reach out
to him in some way, um, becauseI think he, he would, he would

(29:29):
be the perfect guest.
He must have like crazy storiesalso from from all the decades
he's been in the industry um, ohyeah.

Speaker 1 (29:36):
So I had that when I was head of risk at franklin.
Um, I had a chance as you canimagine, uh, mark took some
investment risks, uh, indifferent parts of the world,
and so there was a number ofyears where, when I was in
charge of risk, I would travelwith that team and attend their
you know annual conferences allsome of the most interesting

(29:56):
places I've ever been in thePhilippines and Turkey and
Vietnam.
Anyway, I also got a chance toknow Mark, and he's a
fascinating one of the people Iadmire the most in terms of just
the way they conduct themselves.
Personally, I would get to thegym in the morning at the hotel,
like at 6 30, and mark wouldhave already have been there for

(30:18):
an hour.
He or you know someone in theirlate 70s, 80s.
At the time he was just infantastic shape and he kept an
amazing schedule.
I don't know how he did it, um,but just a really neat guy, uh,
I have a lot of admiration forhim.
Absolutely impressive and, yeah,very knowledgeable about it, by

(30:39):
the way, I still keep in touchwith Mark, so maybe I'll try to
pass along your email address toMark 100%.

Speaker 2 (30:48):
Let's see if this conversation goes well and if
you like it.

Speaker 1 (30:51):
I'll take it I need to deliver and I need to perform
.

Speaker 2 (30:53):
But yeah, thanks for offering that, I'll take it.
So I need to deliver and I needto perform there you go.
So, but yeah, thanks foroffering that.
I appreciate it a lot.
So I mean I want to go backagain to you as a CIO.
We keep diverging from thatbecause there's a lot of
interesting topics, so I wantedto ask you I mean, you've

(31:15):
clearly seen the financialindustry evolve and go through
massive changes over the lastfew decades, not only in terms
of technology, but also becauseof regulation, demographics, the
emergence of new asset classesand so on what's one major shift

(31:39):
in the industry that you'vewitnessed, that you've
experienced in your own skin,that has challenged, uh, you as
a leader during these, thesepast few decades, and how did
you navigate the situation?

Speaker 1 (31:48):
yeah, great question.
And I would say probably themost dramatic shift has been and
apologies to all of those sortof public market active managers
out there, but what I've seen,because of technology efficiency
, the number of folks trying toparticipate in the markets,

(32:17):
folks trying to participate inthe markets, is that, um, the
opportunity for mispricing inthe public markets, uh, over my
30 year career, just hascontinued to shrink.
Uh, there is just the way Ithink Peter Bernstein said it.
Well, he said markets can getmispriced at a macro level and
it takes it, you know, it takesmillions of investors moving at

(32:38):
the same time to reset prices ata macro level.
You can think those arewidespread market shifts when,
when we have, you know,capitulation across huge market,
you know, across a huge swathof asset classes, that's that
type of shift.
But micro mispricing, microefficiency is so much higher now

(33:02):
than it was when I started.
And think about all thealgorithms, all of the bots, all
of the AI engines, all of thepeople with Bloombergs, you know
, in their garage, you know,trying to squeeze the last bit
of juice from those lemons outin the public markets.
There is just not that muchmispricing to be extracted.

(33:25):
It's still there, but boy is ittough to do it once you think
about fees.
So in the public markets and wekind of came to that conclusion
, for the most part at CalPERS,which was, you know, the CalPERS
portfolio, even while I wasthere, we really evolved it from
, you know, having a lot ofexternal active public markets

(33:46):
managers and stocks and bonds,and basically shrank that list
because so few of them over thelong term were able to really
generate, generate positive youknow positive alpha to cover
their fees, and so it becamelargely a giant index portfolio.
On the public markets there'sstill a few, and there's still a

(34:07):
few managers out there that arekind of still remarkably good
at finding alpha, but boy,they're few and far between
finding alpha, but boy they'refew and far between A lot of.
And what I've also seen duringmy career is just how private
markets have taken over a lot ofthat active risk and a lot of
that active return.
And so again that CalPERSportfolio thinking about how

(34:30):
it's built, a lot of the activerisk and almost all of the fee
budget is really allocated tothe private markets and that's
probably appropriate.
Although the fees are high Inmany cases, the sort of the
returns justified at least someof that, I think.
I think we will see feecompression.
That's probably the other bigtrend that I've seen during my

(34:52):
30 years is incredible feecompression primarily in the
public markets, and that willoccur in the private markets as
well, I think, over time.
But there's still a long way togo there.

Speaker 2 (35:03):
It's funny because you've been referring to, yeah,
the fact that it's gettingharder because of less and less
price inefficiencies and thingslike that.
I started working in the early2010s and the only market I knew
was already pretty efficient.
So when I hear these storiesabout the opportunities that was

(35:25):
in the past, I'm like, wow, Iwould have loved to be around at
the time.
It must have been really,really fun.

Speaker 1 (35:31):
Yes, I think that it really was fun when I first
started.
There really were just many moreopportunities.
There was also a lot ofunrecognized risks because, you
know, we didn't have all of thetools and you know, factor
models were just coming into thepicture, and so you know, we

(35:52):
were probably taking risks wedidn't necessarily know about.
So if we were gettingcompensated, we thought we were
getting compensated because wewere so brilliant at finding a
mispriced security.
But chances are we were justtaking a risk we hadn't yet
properly measured.
As a result, the opportunitykind of the paradox of our

(36:23):
industry is that the better youcan measure something, usually
the less opportunity there isfor mispricing in that market.
And so, again, that's why somuch of the opportunity set has
moved into the private markets,and we've seen that as well as
the number of listings you canjust see the number of listings
in the New York Stock Exchange,for example, has basically been
on the decline for many years,and a lot of that activity, a
lot of that capital is flowninto the private market.

(36:47):
And maybe I'll also justquickly mention I also think
that's one of the mostinteresting sort of near-term
opportunities.

(37:17):
There's also some risks involved, but to see private markets
move from really aninstitution-only type of
playground to see privatemarkets, private market
investments, begin to move intosort of down market, into
retirement plans or into wealthyou know, individual wealth
portfolios, individual investorportfolios I'd like to see that
there's importantdiversification that can be had,
say, in poor real estate, thetrick is to make sure that the
fees are reasonable and thatpeople understand the liquidity
and they can't have their moneyright away.
And that's going to be a bit ofa shift.
But there really arediversification opportunities.

(37:39):
I think that people shouldavail themselves.
And now there's tools in themarketplace, things like
interval funds and auction fundsand where you know people that
aren't, you know that aren'tinvesting at the scale of
CalPERS will be able to accessthose types of investments going
forward.

Speaker 2 (37:58):
So let's talk a bit about CalPERS, because obviously
I mean you're not working thereanymore, but you spent a few
years over there.
I did.
Obviously, I mean a hugeinstitutional investor, over
$400 billion in assets undermanagement and obviously often
in the spotlight, not onlybecause of the sheer volume of

(38:21):
assets management, but alsobecause they're shaping
governance, esg and asset ownerbehavior that many others follow
.
What was it like working atCalPERS and what stands out the
most from your time there?

Speaker 1 (38:35):
Yeah, first of all, I was there for four years and
the way I describe it is kind ofa tour of duty.
I left Franklin and I came backto Franklin and I did sort of
my tour of duty at CalPERS, inthe public service exactly, and

(39:04):
I actually went to University ofCalifornia.
So I live here In the publicservice and that four years was
a fantastic.
Uh, education in investing andacross every possible type of
asset, as I mentioned earlier,that I loved.
I also loved the people in theinvestment office.

(39:25):
They were great and learned alot from from many of them, and
other educational element wasthat I learned how politics work
and learned how stategovernment works and that part
of the job I didn't love.
Politics is a messy business andthe intersection of money and

(39:51):
politics can be very tricky, ofmoney in politics can be very
tricky.
What I observed was that manytimes you know a particular
politician wanted to make apoint or get on the news or had
a particular sort of bone topick and they would use
divestment.
You know they would pick onCalPERS and say we need you to
divest from something becausethey wanted to make a point and

(40:13):
so we had a lot of.
There was a lot of workinvolved in having to sort of
fight off constant divestmentbills.
Because you know, and I thinkfrom a politician's standpoint
divestment feels like the rightthing.
You know you should sell thoseTurkish bonds.
That was a very consistentrefrain from some of the lobbies
in California.

(40:34):
You should not invest in Turkeyat the time.
But the challenge is that youknow first of all it doesn't.
There's always another buyer,you're not really affecting the
thing that you want to affectand you're potentially damaging

(40:54):
the diversification of theportfolio at the same time.
So divestment is really atricky thing and right now the
state is still under pressure todivest from oil and gas
producers.
To divest from oil and gasproducers drove a
gasoline-powered automobile tothe meeting, so I don't know.

(41:18):
There was just a lot of thatelement of the job was just very
tricky to navigate.

Speaker 2 (41:29):
But the investing part was fantastic and fun.
Yeah, that's one of the thingsthat clearly comes to mind when
I think about that job that youhad at CalPERS, like how to deal
with all the differentstakeholders, because you have,
on one side, retirees andtaxpayers, but then, as you said
, you have politicians,legislators and so on on the
other, and obviously each grouphas different objectives,

(41:49):
different times, horizons, soyou need to be good in in both
worlds and and clearly not noteasy, um.
So, yeah, kudos to you, um on,on on going through that.
Uh, not not an easy job by anymeans definitely not it built.

Speaker 1 (42:08):
It built muscles that I didn't know I needed to build
, particularly on sort of how tonavigate complicated political
situations.
I made some just terriblemistakes, and every board
meeting was broadcast live andthen recorded on YouTube.
So if you want to see mymistakes, they're all out there

(42:29):
in the public record on YouTube.
You can watch them all.
But over the course of the fouryears I think I finally made
enough mistakes to learn whatnot to do and was able to
navigate it reasonably well, butI don't think anyone could ever
claim to be an expert.
There's just so many complexissues going on there.

Speaker 2 (42:50):
And how did you deal with transparency?
Because, obviously, being apublic institution, you have
super high expectations in termsof transparency, but sometimes
explaining complex investmentstrategies, especially to
non-specialists, can be verychallenging.
How did you balance thosedynamics between being

(43:15):
transparent on one side and notoverwhelming with people with a
lack of technical expertise onthe other?
Hey there, quick ad break.
Do you work in the financeindustry and have a genuinely
interesting story to share?
I'm always on the hunt forgreat guests who bring raw,

(43:36):
unfiltered insights to the table, or maybe you know someone with
a story worth telling.
Please put us in touch.
You can reach out to medirectly via LinkedIn.
I'd love to hear from you.
And now back to the show.

Speaker 1 (43:52):
Yeah, that is a great question, ignacio, and I would
say that I felt part of yourresponsibility in those senior
roles at CalPERS is you reallyhave to believe and understand

(44:13):
and commit to helping yourconstituents, your stakeholders,
understand what you're doing inlanguage that isn't patronizing
?
You know what I mean, or isn't?
You really have to commit to it?
And just because you're usingsimple language to describe an
investment, uh, doesn't meanthat the people that are

(44:35):
listening are simple.
It just means that it's nottheir field of expertise.
So you many times, just had touse simple language.
But that's really an art.
And, again, that's one of thethings that I got better at.
I don't think I was ever greatat it, but I really do feel like
CalPERS has a good commitmentto transparency.
I was inspired by goodcommitment to transparency.

(44:55):
I was inspired by theircommitment to transparency Just
the idea that you know if we'reinvesting money on behalf of the
state of California, on behalfof the pensioners, on behalf of
the taxpayers.
You have a responsibility tomake sure that people understand
what you're doing.
You can't keep it secret.
You got to be upfront about it,to the extent you can be.

(45:16):
And uh, and I think we, we dida pretty good job of that.
I mean, like I said, there'salways room for improvement, but
I think CalPERS is actually oneof the more transparent public,
large public institutions outthere.
I mean, you look at, uh andit's.
It's a completely differentscenario, but many of the
sovereign wealth funds in theworld are not very transparent

(45:37):
because they view a lot of thattransparency as sort of
potentially damaging to theirstrategy or to their investment
returns.
They want to keep things alittle closer to the vest and I
understand that.
But that's a slightly differentmission.
Calpers mission is to reallypay pensions over the long term
for the employees of the stateof California.
So you're investing on behalfof literally the entire public

(46:02):
and so you really have to thinkof that as your audience find
really interesting that, yeah,that you, that you left franklin
and then you came back.

Speaker 2 (46:17):
That must have been, uh, it must have been weird, but
you, I guess when you came backit must have felt like home, uh
, at the same time because youknew people you know, you knew
processes, you knew theinstitution I did.

Speaker 1 (46:30):
I I definitely did.
And what was interesting in thefour years that I was gone I
was at CalPERS from 2014 to 2018, the industry, the investment
industry, had been dealing awayfrom traditional mutual funds
and moved towards ETFs.
Etfs were still a relativelynew product.

(47:06):
They were growing rapidly butstill smaller than mutual funds.
By the time I came back, etfswere clearly in the lead and
were the product of the future.
And that's still the case, atleast in the US, where mutual
funds have some taxdisadvantages that ETFs don't
have, and Franklin was a littlelate to the ETF game.

(47:27):
They're catching up rapidly,which is great, and we work with
the ETF team at Franklin tohelp support them, and we have
several ETFs that my team helpsmanage.
But that's one big shift thathappened during that four years
retail or the advisor-drivendistribution to advice fees or
like an annual paying an annualor quarterly fee and away from

(48:01):
commission, and that's a verydifferent sort of distribution
structure and sales structure.
And then finally, as Imentioned, the interest in
private markets during, evenduring that four years, was
really dramatic, dramatic.
We saw just a dramatic uptickin interest in real estate,
private credit, private debt,private equity during the four

(48:22):
years I was away.
So when we came back, franklinembarked uh, you know, I think
it was smart I embarked on aneffort to try to build out their
alternatives uh, investmentmanagement capabilities, and
they've done that and uh, and Ithink that was smart.
But obviously a lot ofcompetition out there, you know,

(48:42):
there's a lot of good investors, I actually think and this is
one of their sort of editorialcomments that I'll just quickly
mention, which is this is a goodtime to be an asset owner.
You know, compared to manyyears in the past, there is
hyper competition in theinvestment management space.
Fees are coming down, and Ithink fees are going to come

(49:04):
down in the private markets aswell.
Given, again, that hypercompetition, it's a good time to
be an asset owner.
It's a very challenging time tobe an asset manager, and so if
you're on the asset owner sideof the equation, I think you
have a lot of opportunity.
Really, the world is sort ofyour oyster.

Speaker 2 (49:24):
You were talking about ETFs.
I have a question about ETFsI'd love to get your perspective
on, because we're seeing therise of something called active
ETFs, which sounds a bit of aparadox, because ETFs have
historically been known as thequintessential passive
investment trackers of indicesand things like that, and now,

(49:46):
all of a sudden, they're addingthis new type of product which
is like okay, it's an ETF, butit's somehow actively managed
and there's a little bit moreliquidity than on a mutual fund,
and so on.
What do you think about activeETFs?
What's your stance?

Speaker 1 (50:02):
Yeah, I think we're going to continue to see those
grow and I think that we manageactive and passive ETFs within
my team and Franklin offers both.
I think that'll continue togrow and you know there's a

(50:23):
variety of different ways to doit.
There's sort of semitransparent active ETFs.
There's fully transparentactive ETFs and you know,
whether it's packaged in amutual fund or packaged in a ETF
form, active returns over thelong term in the public markets
are really really challenging,and so the slightly lower fees

(50:45):
and slightly lower tax drag thatan ETF has can actually be an
advantage over a similarly youknow, a similar strategy mutual
fund.
So I actually think active ETFsare going to be one of the
predominant ways that peopleaccess active management in the
public markets going forward.

Speaker 2 (51:07):
Yeah, they've been getting definitely loads of
traction in the past couple ofyears.

Speaker 1 (51:12):
That's right.

Speaker 2 (51:13):
I want to go back to the three bullet points you gave
before people, processes andtechnology.
The third one topic very closeto my heart, particularly AI.
I'm a big fan.
I'm trying to become part ofthe new generation of financial
advisors that is familiar withall these tools.

(51:36):
I want to become part of thewave of change and hopefully
stay relevant in the futureworkforce.
So I have a few questionsaround this topic.
First of all, how is technology, and specifically AI, which is
the big buzzword at the moment,changing the way asset owners,

(52:00):
and you at Franklin specifically, work and make decisions today?

Speaker 1 (52:05):
Absolutely.
I'm equally excited about it.
Even though I've been in theindustry a while and I'm
starting to bump up against 60years old, I too am doing my
best to try to stay current.
On uh, on AI tools, I've got acouple of them that I use
regularly and I'd say that youknow, at least in my team we

(52:26):
first started using them sort ofalmost like a job aid.
You know, obviously, chat, gptor Claude can can write pretty
well, uh and uh well, and giveyou a very solid sort of first
draft.
If you're actually just doingwriting, I still think they need
some work.

(52:46):
When it comes to numbers,that's one of the things I've
noticed they're better atlanguage.
I mean, they're large languagemodels.
They're better at language thanthey are at numbers.
Still, although that's changingquickly, very quickly, once we
started to use them sort of asjob aids to try to do some
writing for us and take minutesat meetings and summarize emails

(53:10):
and things like that, whichwere just sort of efficiency
generators, we've actually nowstarted to use them actually as
sort of investment assistance.
And let me describe what I'mtalking about.
I mentioned earlier this toolthat we're building as our
multi-asset, comprehensive,multi-asset platform.
It's called Mosaic, which kindof describes the way it's built.

(53:32):
It's a mosaic of differentcapabilities and one of those
capabilities is actually alittle robot that we're building
in there called Pixel, and it'san AI little robot that kind of
watches what you're doing inthe system and makes suggestions
, makes investment suggestions,makes process suggestions to you
, and so that's what I wasmentioning when I mentioned

(53:52):
people, process and technology.
Like technology has got to bepart of the team.
You really have to think of itkind of on equal playing field
in terms of how to build aworld-class investment process.
Technology is really a keypillar there and increasingly
that includes the use of AIagents and Pixel is our agent

(54:18):
and he's excuse me, they we havenot chosen a gender for Pixel.
That's Pixel's decision andPixel is just.
He kind of is a part of theMosaic platform.
He's just watching and helpingIs.
Pixel sentient already yeah,pixel's watching I don't think I

(54:41):
could describe him as fullysentient, like.
I don't think he.
He he's not independent yethe's pretty.
He's still more like anassistant than than a
full-fledged investor.
But there will be a day he'slearning every.
But there will be a day he'slearning every day.
There will be a day where Pixelbasically probably wants to
take on his own portfolio.

Speaker 2 (55:01):
So let's stop there for a second, because that's
super interesting.
So how far away do you think weare from truly tech-driven,
AI-driven portfolio management?
Do you even think that'spossible at some point?
Or is the human oversightalways going to be needed?

Speaker 1 (55:25):
I don't think we're far away.
In fact, today, even currently,we have portfolios that are
systematically driven.
In fact, the vast majority ofour equity assets are managed
using systematic equity factormodels and those are basically,
you know, rules driven toolsthat help select securities.

(55:47):
And those rules are built basedon analysis of, you know, of a
tremendous amount of historicaleconomic data, company data,
earnings data that helps usbuild rules that help us select
securities and build portfolios.
So those are in existence todayand have been for a while.

(56:08):
In terms of sentient AI managersmaking decisions on portfolios
without human oversight, I thinkwe'll see it in the next two to
three years.
Oh, wow, I mean, yeah, I don'tthink it's that far away at all,
because they learn so quickly.
That's both the beauty and kindof the scary thing is that they

(56:31):
just learn so quickly.
But, as I said, there's stillwork to do in terms of numbers,
like I just noticed, the largelanguage models are great at
language, at summarization, atsort of pulling together massive
amounts of information andmaking it consumable.
They're still not that.
What I've noticed is, ingeneral this is a bit of a

(56:53):
generalization but they're stillnot that great all the time at
analyzing numbers, uh and comingup with the right answer.
They'll come up with an answer,but you have to check it very
carefully and, yeah,particularly when you're when
you're uh, you know, talkingabout other people's money,
checking it twice is reallyimportant.
You don't want to trust the aiagents on that front just as yet

(57:17):
, but I think within the nextfew years it'll come to fruition
.

Speaker 2 (57:22):
So how long before I lose my job to AI?
What's?

Speaker 1 (57:27):
your estimate.
I don't think you'll lose yourjob to AI.
I can tell you're young enoughand smart enough.
I think what you will do is youwill have an army of AI agents
that work for you, that make youmore effective, and I think
that's the key people.
Uh, you know, uh, there will beroles that will be displaced to
AI, but I think the, the folksthat learn how to leverage it

(57:51):
for their own benefit, are theones that are going to um, you
know, really thrive, to reallythrive in the next generation of
our economy.

Speaker 2 (57:58):
I'm an optimist too.
I fully believe in the potential.
I like to look at it glass halffull.
I think AI won't replace me,but someone using AI could.
So I want to stay current on it, that's right and have an army
of, as you say, agents andminions doing all the small
tasks for me.

(58:18):
That would be amazing.
It would be exactly so.
As we get closer to the end ofthe conversation, I'd like to
wrap it up with a few personalquestions, maybe a bit of advice
.
So, first of all, you know apiece of advice for the next

(58:39):
generation.
What's something you wish youhad known earlier in your career
?

Speaker 1 (58:45):
something I'd known earlier in my career.
Oh, I knew this in my careerand I made a point of making it
a priority in all of my roles.
But, but, if I could go back, Iprobably would have even bumped
it further up the priority list, which is really focusing on
building relationships withpeople.

(59:10):
It sounds like a cliche, itsounds like just so obvious and
for some people it's just anatural thing, but I think it's
just so important that as youprogress through a career,
you're going to meet hundredsand hundreds of people and, like

(59:37):
, just go back to the basics,you know, be trustworthy, be
honest, be a good friend, be, uh, be someone that people can
count on.
That is so important, uh, overthe long run, because you're
going to accumulaterelationships that are really
going to define your life.
Uh, you spend so much time atwork and so much time, uh, you
know it's the majority of yourof your life really is spent at
work, and so much time you knowit's the majority of your life
really is spent at work, and somake it meaningful, obviously,

(59:59):
at work, those workrelationships.
It's a slightly different typeof relationship than a personal
relationship, you know, than atrue friend you've had since
college or something or you knowobviously a spouse or something
like that, but thoserelationships are tremendously
important and you can carry themwith you throughout your career
.
So that would be one thing thatI would suggest.

(01:00:19):
Many people focus on thetechnical components and you
have to do that.
That's kind of the back wheelof your career chartered
alternative investment analyststypes of things and those are
obviously important.
They tell the world that youknow the basics, the nuts and
bolts, but it's really therelationships that can

(01:00:41):
accelerate your career and, youknow, accelerate your not just
your career but your ownpersonal growth.

Speaker 2 (01:00:49):
Yeah, and I feel like in the finance industry,
sometimes we tend to forget thatbecause we spend so much time
behind our Bloombergs and ourExcel models and so on.
Yes, but at the end of the day,it's a people's business, right
?

Speaker 1 (01:00:59):
and um, yeah, 100 agree with you, uh get out there
and and talk to to people inreal life exactly I think many
people and are attracted tofinance because it feels like
you can kind of focus on thenumbers and like not have to get
into messy interpersonal stuffLike sometimes, I know, like

(01:01:25):
sales, for example, those tendto be people people, whereas in
the investment group those tendto be numbers people.
But what I've just found isthat even the numbers people,
but what I've just found is thatuh, even the numbers people, if
you can focus on kind oftilting your uh approach towards
focusing on the people uh in asincere way, I think that will

(01:01:47):
pay off uh for you bothpersonally and professionally
over the long and um and andtell me like, after all these
years in the industry, whatcontinues to energize you about
your work?

Speaker 2 (01:01:59):
Is it the people you're meeting, the way the
markets are evolving and keepingyou on your toes examining that
, ignacio, because potentialretirement is not that far
around the corner, but I don'tthink I'll ever fully retire

(01:02:26):
because markets fascinate me.

Speaker 1 (01:02:27):
Part of the reason I'm attracted to this industry
is they're always changing andspecifically, asset allocation
is part of the reason that Iwork in a multi-asset team,
because asset allocation hasalways just fascinated me.
I'm endlessly curious about it.
There's new asset classesbubbling up all the time and I
think that evaluating them andthinking about them and thinking

(01:02:47):
about what they add to the riskand return of a typical
diversified portfolio is justfascinating.
And maybe part of the reason isis because there's no way to do
asset allocation passively.
There's no such thing as apassive asset allocation.
You know there's a passive, youknow US equity portfolio,
there's a potentially a passive,you know fixed income portfolio

(01:03:10):
, but there's no such thing asas sort of a perfect passive
asset allocation, because everyasset allocation is built around
the objectives of the investorand those are always different.
You can construct them usingpassive vehicles, but the asset
allocation has always got to bean active decision and that's
why it's just something thatI've always found interesting

(01:03:32):
and I think I always will.
I'm endlessly curious aboutthat.

Speaker 2 (01:03:37):
You're an investor at heart and you will always be.
I love it.
For those of you that want tofollow your thinking and stay
updated on what you're doing andwhat your team is doing,
where's the best place to findyou and find more information?

Speaker 1 (01:03:53):
Oh, you bet the solutions team FT at Franklin
Templeton Investment Solutions.
We publish on a monthly basissomething called allocation
views and it's available on ourwebsite and every month it
basically talks about where wethink opportunities lie as well
as where the risks lie.
We're dynamic asset allocators,in other words, we believe that

(01:04:17):
you can add to risk and returnby leaning a little bit one way
or the other into stocks or awayfrom stocks in different
regions, countries, fixed incomesectors.
We're not swinging for thefences in those types of bets,
but we are leaning one way orthe other and we publish that on
a monthly basis and we havequite a few followers.

(01:04:38):
It's a well-read document, so Idefinitely advise people to
take a look at that.

Speaker 2 (01:04:44):
You heard it freely available online, so make sure
to check it out.
And one last question, the mostimportant question Did you
catch some waves today?
Are you going to catch?

Speaker 1 (01:04:58):
some.
No, that's next.
That's next.
Yeah, it's quite early here inCalifornia, but I think our
conversation was set for 7 am,so actually that's the best time
to be out there, becausethere's fewer people and you can
catch the peak.
Sorry to have you here insteadof on the water.

Speaker 2 (01:05:16):
Best time to be out there because there's fewer
people and you can catch thepeak.
Uh, sorry to to have you hereon the water that's next.

Speaker 1 (01:05:20):
That's the next thing on my agenda is to head out to
to see if I can't catch a fewwaves.

Speaker 2 (01:05:25):
Amazing, wiley, it's been absolutely a pleasure to
have you on the blunt dollar.
Thank you for, uh all thosetakes, for sharing all those
insights and advice, and Ireally look forward to see you
in Chicago.

Speaker 1 (01:05:41):
Very good.
Thanks, Ignacio.
It's been great fun to talk toyou.

Speaker 2 (01:05:45):
The Blonde Dollar is written, produced, hosted and
edited by me, ignacio Ramirez.
Everything you hear concept,script, sound design and
production come straight from mydesk and, occasionally, my
kitchen table.
Thank you so much for listeningand join me in the next episode
of the Blunt Dollar for moreraw, honest finance
conversations.