Tesla, Enbridge, Wall Street, and ETFs (Podcast)

from your time down in Austin. Look, I think Paul, with these as well as Apple events, I think investors always want more meat on the boat. You know, obviously they lead the groundwork for what I've used a flex to muscles type of event from a scale and scoope in terms of what they're doing on evs. But you didn't have a sub thirty k vehicle introduced. I think that's still to come, but I think they read the

groundwork for it. Stock was so off knee jerk and now becomes a sort of what's the next step on this roadmap? I mean, Dan, you know that I feel like their design and vehicles are just too long in the tooth. I mean they Matt Winkler has had his models for more than a decade, wow, which says a lot about the quality of the vehicles, and I'm not debating that, but it's just tired and they all look alike except for the cyber truck, which is I guess what,

three years late now. So at what point does Elon Musk stop fooling around with Twitter and start like working on progress at his car company. Look, I think you hit the nail on the head relative to competition increasing, and you won't how sort of come out with more models. I think they've the first time admitted they're going to need basically ten models for the long term, and now it's about when do they come out? What do they

look like? Look, I personally believe, based on our work, sub thirty k is going to be the key from a cheaper vehicle as well as an suv like Tessler. I think that's really from a mass market, which streets open to focus on and clearly, look cybertruck. A year from now you'll see cybertrucks around and that I mean there was Deliveries should be by your early next year, but that's not going to move the needle from a

mass perspective, and that's why this is so important. From sub thirty K, Well, they just need to look since the model S was introduced, the nine to eleven has had four model changes, okay, and today's models doesn't look any different than it did ten years ago. It still looks great. I think, if you I'm going to carve myself never that into it. But I just feel like they need to. You know, if Mercedes or if BMW hadn't changed their design language in over a decade, it

would be a real problem. Why is it okay for this company? I think it's because when you think an electric vehicles right now, it's still Tesla's world. Everyone else paid in terms of the EV space. They know there's an opportunity let's call it three million vehicles in terms of how they get they just hit there four millions in terms of deliveries. So they've really obviously crushed in terms of this initial sort of you know, growth area. But now it's the next phase of the growth story,

and I think it's all about costs. It's all about efficiencies. They can lower by forty fifty percent in terms of what they're talking about. Then all of a sudden, you start to have a twenty twenty eight k Tessla out there. Hey, Dan, you know, one of the most read stories on the terminal today is about Elon mush not surprisingly, but it's about his use of his private plane and he's flown the most among some of the richest billionaires AND's and

it's really spiked up after he bought Twitter. But it just goes to the point he's got so many different companies in so many different businesses and I'm wondering in Austin at the investor date to what extent was that brought up or addressed by him or by investors that Hey, Elon, can you focus on where the real money is, which is Tesla. Look, I think there's definitely questions around that and nothing on Twitter. I think that's something that started

to go more into the background. But you're starting to see more, you know what I'd say, Ben Strength, you know, Tom Zoo and two Mothers are starting to come up in terms of the TESTA organization. I believe he's been able to balance it well, but no doubt you're starting to see, you know, a must ask pay more and more attention to some of these next steps with Tessa with SpaceX, and I think that continues to be a source subject for investors for you know what I've used

probably with the most fouled individual in the world. What do you think about I saw a Lucid on the road yesterday. Barely see any of those. I saw Rivian parked by the scars Dale train station. They look sweet, but they're really disappointing in terms of their ability to

ramp up production. Faraday whatever it's called. I still have never seen one of those Pollstar, Yeah, Pollstar, but that's Volvo right, So okay, I mean, what do you think about these electric vehicle startups that we all had such high hopes for it and everybody bet up the stock initially and now have just been in disappointment after disappointment. Are they going to come back? Are they going to survive? Look? I think it's a great comparison what we saw yesterday.

I mean, Tessa flexes the muscles has the scale. You're going to see GM doing the same thing coming at the three one through Ari quoter on what's forward. But these startups, it is so difficult to scale and so expensive, and in a risingry environment that's tougher and tougher, so we're going to survive. Some are not. And I think it also just shows the dog ain't the homework excuse

like we've seen Rithian others. It just doesn't work in this market where the dream quoter unquotter story stocks are no longer. I thought r J. Scaringe was gonna kill it. He took like a decade to bring out the truck, and now, I mean, fifty thousand is all they're gonna make in twenty twenty three. If I ordered one of those and I'm on a two year waiting list that just went to three years, I'm gonna be super disappointed.

I mean, it has been up there from a disappointment with riving and trooms out of gate given r J and you know everything we saw from him pre IPO up there with you know, maybe Zach Wilson and some other disappointments, it's been very, very frustrating for industris. Hey, Dan, just real quick, thirty seconds your time in Austin. What's the number one question you heard from institutional investors? Well, I think today the big focus is, Okay, what does

ultimately the timeline look like to get efficiencies down? And is the China growth story, continuing to ram push price cuts. Everyone's focused on price cuts in China. What the demand story looks like. We continue believe that that's robust. But again, haters continue the heat on task with that good stuff. All right, Dan Ives, thanks so much for joining us. Appreciate getting your perspective as always on Tesla and on

all things technology. Again, Tesla stock off about five percent here to a little bit disappointing as you read some of the research and some of the reporting, just that there wasn't more color as Dan was suggesting on some of the newer models that just kind of more to come. So you kind of have to just kind of believe in Elon and that's been the story for a long period of time. Dan I has from web Bush. Let's get to our c suite conversation. We're talking insurance, Juan Andre,

is that that thing to do? That? Right? Thank you? We want to draw a CEO of Everest. There's an end. There's not on my list my sheet. It's just because thank you. Okay. The most important thing the names I care about the New York stock chame symbol stock symbol R E go. We'll get you there. And this is a stock that's done really well. So we want to talk to one on here. He's also what a name, Yeah, got out to you all right, So this is an

insurance company. Tell us about Everst, tell us about what you do, and then we'll get into some of the you know, the growth drivers. The challenge is that type of thing. Yeah, No, absolutely, Paul, pleasure to be here. Look, Everest is what we call a hybrid company. We have both reinsurance business and an insurance business. You know, we trade in the New York Stock Exchange, part of the SMP five hundred, and we have done exceedingly well over

the last few years. As a matter of fact, I've been the CEO since January first of twenty twenty, and we've grown the reinsurance business about fifty five percent in that period of time. January first, twenty twenty. Time to take over a Yeah, it's a wonderful time. You must have taken off your tie and marchin, unbutton your top like I need to breathe a little bit. Yeah, Well, realistically I was only out of the office for a couple of months and then I was back all in.

But it goes back to the story, right, because I think we've done a very nice job managing the company through all of these challenges. And you know, to what I was saying, it's not only the growth of fifty six in our reinsurance business over that period of time over sixty in our primary business, but the stock price has gone up about forty percent since I started in

twenty twenty, so the company has done well. So yeah, I mean I usually look at a comp screen, as our listeners know, to see how you've done over a five year period. You've outperformed over that period, but I'll put in you know, your starting date still massively outperformed not only the S and P five hundred, but also the financial sector. Why do you think it is that you're doing so much better than the benchmarks? Yeah, No, Look, I think it's a few things. Number One, I think

we've got a world class team. We've put together a very clear strategy, and we have been relentless about executing against that strategy. So I think those are sort of the key elements that we have. In addition to that, we've also had a good market, you know, and that's one of the things that it's important to talk about today. It's the fact that in the reinsurance market particularly, we

have a one in a generation type opportunity. There's a secular supply and demand to balance that's taking place right now, and we're uniquely positioned to take advantage of that. And so all of that together, I think, is what's led to that outperformance. We're making a big deal on Bloomberg Gradi on television today about the rise in interest rates, the ten year Treasury now above four percent. How does that impact your business a rising interest rate environment? Yeah,

absolutely so. By definition, because we're a reinsurance insurance company, we tend to invest in very conservative investments, mostly fixed income, so that really does translate to our portfolio yield increasing. So that's generally a good thing for us. Yeah. I mean last year the SMP was down twenty percent and change. You are up twenty percent and change. Is that Is that kind of outperformance going to stick if we have a recession? What happens to your business if we go

into a serious recession? Yeah, Matt. Look, we tend to be essentially a safe port in a recession, and the reason for that is businesses can't do their job without our products, right, You can't run a company without general liability, insurance, property insurance, directors and officers liability, and particularly in the heightened risk environment that you have today, demand for our products is at an all time high. So for us, a recession is actually an opportunity for us to continue

to grow. So are there sectors of the economy or let's put it this way, where do you guys focus What are some of the sectors that you guys have exposure to or want to have exposure to. Yeah, so we're very well diversified both in reinsurance and insurance, and that's really across industries, geography's product lines, et cetera. That gives us the ability to look at particular aspects of the economy and say, this is an area where we see a lot of opportunity and we want to play.

For instance, property right now is a terrific area for us to play. Areas that we're watching more closely are credit credit related lines, things like mortgage surety, etcetera, etcetera. Because we don't know if there's going to be a credit cycle beyond some of this, how do you guys really compete against Again, we'd look about the stock Matt and now we always focus on stocks. If you get a snapshot of how companies are doing over a period of time, talk to us about your competition. Sure, it

really does vary whether it's reinsurance or insurance. On the reinsurance side, we compete against Munich re, Swiss re hanover Re, and then some of the other Bermuda companies, some of the smaller ones. On the primary side, we're competing against chob aig Acca, Alliance, Zurich. Those are some of the competitors. How come those the res are all German speaking, Munich, re hanover Re, those are all a very small part

of the middle of Europe. Why is reinsurance so concentrated there? Yeah, I think historically a lot of the large global reinsurers did come out of the continent of Europe, but their worldwide right. Their home offices may be in Munich or Zurich, but they're really worldwide players. But I think a lot of it was just their history and a lot of opportunity in the continent of Europe when they first started. So what do you do? Why are we not interviewing

him in Bermuda? We should? That was are you actually headquarter? You literally live in Bermuda. Now I go back and forth to Bermuda. Our company is headquartered in Bermuda. Yes, we know a guy in Bermuda. There's and he went to Johns Hopkins as Yes, we've got your masters at Johns Hopkins right international, we could tie all in. So do you focus your business because you studied international studies. You've been recognized by Latino Leaders magazine for your contributions.

You had Latin American studies also as part of your masters, do you focus on a global business or as your business really focused in the US Now? Our our business is totally global. So if I think about it from the reinsurance side, I have customers in a one hundred and fifteen countries around the world. That makes sense. We are the seventh largest reinsurer in the world, so we pray a significant role in all of that. On the primary side, we're in the middle of expanding our business

from North America also into other countries. So matter of fact, we just opened up offices in Santiago, Dusseldorf, Paris, Madrid, Singapore and in this year we have additional expansion to go as well. So this leads to my question about growth. What's your plan and look like, say a five year plan for growth from here? Are you going to do it organically? Are you? We talked to pack Allaghory yesterday and he's done a lot of it by buying other companies.

What does it look like Foreverest. Yeah, for us, it's really more of an organic build and we have been very successful. I mean the growth numbers that I quoted earlier in our discussion, we're all organic based. And I'll give you an example. So in the reinsurance business, January first is where the majority of your renewals take place. So we secured over fifty percent of our portfolio on

January one in an environment good number. That's a very good nub because my analyst, Matthew Palazzola, that's his question, ask him how the January one renewals went. Yeah, No, it's it's it's a it's a very Over fifty percent of your portfolio being secured in this January one is a very good number because what we saw is that once in a generation opportunity that I was telling you about, pricing for property catastrophe went up fifty percent in January one.

In the US, it went up forty percent internationally, so we were able to secure over fifty percent of our portfolio at much better pricing, much better terms. So that sets us up with a very good tailwind going into twenty twenty three. How much of a problem are you, know, these big superstorms and are we really seeing more and more of them or do we just talk about it a lot? I mean, since Katrina, we haven't seen that kind of devastation in the US, but we've had some

big storms along Florida. We had Superstorm Sandy here that closed the New York Stock Exchange for four days. Is that a concern for you? It certainly is, and I think it ought to be a concern for everybody. I'll give you a couple of statistics. So last year in twenty twenty two, the insurance industry paid out over one hundred and forty billion in insured loss. In twenty one it was one hundred and thirty billion, and insure laws.

So what we're clearly seeing is more severe storms. This is all driven by climate change, right Caesar warming up, Warmer seas lead to more severity, higher category four, category five type storms. So that creates for our industry essentially an impetus to get much better at risk selection and modeling, and frankly, that's one of the things that we've done at Everest in this period of time is reduce our exposure to natural catastrophe, which then reduces our volatility to earnings.

And it goes back to the diversification point that I was making earlier. We're a well balanced company, so we don't have to rely only on property. Natural catastrophe exposures. What happens to our good friends down in Florida, can they even get insurances? And that's where you're from, right, you grew up in Miami. I am I'm a Florida boy.

It happens well. Listen, if Florida has gone through a very difficult period of time, particularly over the last couple of years, but the governor in the special legislative session that they just had at the end of last year, have put in place some very good reforms that will curve some of the fraud, some of the litigation that basically was creating a capacity crunch, if you will, in the state. Now, those reforms will take some time to play out, but ultimately that votes very well for Florida

for their consumers. And for the insurance and reinsurance market. I mean that's so as a state kind of for the last backstop in Florida. Look, I think in Florida have a few wasues. One, you're exposed to hurricanes because the word is, you have a lot of people moving down there, people like to live on the coast. And in addition to that, you have some of the environmental factors I just described. There's a lot of fraud and there's a lot of litigation, and that's really what the

governor and the legislature have really just addressed. But again that'll take a little bit of time to show up. All right, fascinating stuff. Want Andrade CEO of Everest. It's in New York Stock Exchange traded company r E is a symbol like reinsurance based in Bermuda, Bermuda. And again, why are we here not in Bermuda? We could have done this. Why isn't there everyone based in Bermuda? Exactly? I want to talk energy. We'll do that with Greg Ebel.

He's the CEO of n Bridge Energy that trades on the New York Stock is changed as symbol as e N as a Nancy Bison boy it's got a seventy eight billion dollar market. Captus stocks up about one point two percent today, kind of unchanged on the year. And this isn't a company that also had an investor day yesterday. It's not just Tesla, but a lot of hope are trying to get out in front of their shareholders. Greg,

thanks so much for joining us here. I'd love to first of all, just tell us what end Bridge Energy does, how does it fit into the energy stream, and then tell us kind of what were your big big points you tried to make yesterday your investor day. Sure, I appreciate,

appreciate being with your Polman. Thanks very much. Yeah. So the best way for your listeners probably to think through this and Bloomberg Radio think through this is, you know, end Bridge is really like the FedEx, if you will, from an energy infrastructure perspective, and we're really trying to be that first choice for our customers for energy delivery. So we pick up whether it's oil or it's gas, or we're on the renewable side as well, we'll store

it and ultimately we deliver it to those users. So yesterday it was about going out to the our investors and telling them how we you know, we see four to six percent growth here over the medium term, continued growth in our dividend, which by the way, we've increased every year for twenty eight years. So that makes us one of those, uh, you know, dividend ristocrats out there. And that's a key component in this type of environment.

And it's all backed up by about seventeen and a half billion dollars of pipeline projects that can go throughout of North America and wind projects and renewable projects in five to seven countries. You know, we move twenty five to thirty percent of all the oil and all the gas that moves to North America to day every day

safely reliably. So are there places I just recall seeing a story last month where gas bills just soared in California, whereas everywhere else around the world, around the country, I should say, they were stable or even down. Are there places that it's harder to get gas and oil? Two? Yeah, absolutely, so California is a good example, you know. But we have pipelines where the mainline pipe, the main pipeline provider

for gas into New England. So New England actually pays some of the highest prices for natural gas in the world, if you can believe put that in the context of what everything that's going on in Europe and stuff. And that's not because there's no supply, right the supply. I think about the Marsalage shale, they'll think Pennsylvania, Ohio. It's about infrastructure. So if you're relying on infrastructure and you can't get the supply to where the demand is, good,

old economics push that. And so you've got a lot of people in New England who, through no fault of their own, are extremely disadvantaged in terms of what they've got to pay for what they've got to pay for natural guys. You know, for many years we've been able to change that. We'd like to kind of get back at doing that. It's a challenging environment as you know, pipelines.

What are the biggest headwinds Because you say a lot of people through no faults of their own, but of course we can all vote, and if the big headwind is say a governor or a state legislature, it is kind of our own fault. Well you hit it right on. That is it is when I say no fault of their own right, Obviously they're not approving pipelines are doing the regulatory side of things, and they're obviously not producing the product, so they're they're takers of the product. Most

of our customers are utilities. So what we really need to do is to figure out some way and this is true for renewables as as well as pipelines. We've got to figure out a way how do we get permitting change so that people can get the energy that

they need. You know, something in the last twelve months we've probably all realized, and maybe we were just getting too happy about this and complacent, that there is a real energy trilemma there of energy security, affordability, and obviously sustainability. So you know, I think we've really got to think that through. I know here in the United States, Congress has looked, as you probably recall, at various permitting reforms that was supposed to be part of some elements that

happened last year. It didn't. Maybe this Congress will be able to make some of those changes. And then you pointed out at the state level, if you don't get support at the state level and makes it very difficult. So great, let's just go to that point here. Um, My energy analysts kind of said, Hey, ask Greg about Michigan and line five. And you know, Governor Whitmer of Michigan actually campaign against that pipeline project when you ran

for office. So just give our listeners a sense of maybe the puts and takes when when you sit down with regulators, whether it's the state level or the federal level, about getting new project approved. Yeah, and you know, often it's a it's the situation of you know, people's varying

views on the pace of energy transition. And again, we're involved in all aspects of this, right from the upstream to the downstream, from liquids the gas to renewables, and I think we've got a pretty good view on what

that pays. So you know that situation line five, as you mentioned it, which is really about a very small piece of pipeline or distance wise, Uh, that's uh, that'sh goes across the straits there, and frankly, uh, you know, it's desperately needed that that energy in places like Detroit and refineries in Ohio, and it's also tied up, if to make it even more complicated, even in international treaties. So you know, despite the commentary out of the governor

and the Attorney General. I think this is a federal issue. It's being dealt with right at the highest levels both of the Canadian government with the Prime Minister and obviously the Biden administration. So you know, I think this is about there's there's a way to do this, and there's a way to do this in a in a very transitional manner that does not but under fair burdens on consumers.

And that's what we're trying to do. And in the meantime, you know that pipeline continues to run very safely and deliver the fuel that's needed to fuel the quality of life throughout the Michigan and obviously over in Ohio, any of the Canada as well. We always say on this show, just so you know, we always call it the Great State of Ohio, Greg, that Great State of Ohio or the Ohio State, one of the two, right the Ohio

State University. Pretty good season, a little disappointing against Michigan, obviously, but that at all. So, Greg, what's that? What was a big message that you wanted to really get across at your investor day yesterday in conversially, what maybe is the is the number one issue for investors in your company. Well, I'd say the number one issue for investors in our company, and I think we're addressing it, is how do you get this seventeen and a half billion dollar backlog of

projects into service on time and on budget. And fortunately that's spread out over ten or twelve projects, So we feel very good about that. Hence our view with investors that look, we want to be that first choice energy investment for you, and the way for us to do that is be that first choice energy delivery. And that's what we're really talking about. And you can do that

in all aspects of the business at Enverridge. Right. Do you like utilities, We have the largest gas utility by volume in North America if you like the pipeline inside of things, and on the old side, we've got those pipelines if you like gas pipelines and LG and as you know, the United States is now the largest exporter of energy. We have that in our portfolio. And we

also have renewables. We've been in the renewable business for twenty five years, so we know how to do that, whether it's solar or it's win And that was the message and all that what it's going to get you is a further extension of the twenty eight years in a row of increase in the dividends. So that's the message we were actually putting out there. All right, Greg, thanks so much for taking the time to join us.

And you're busy there with your investor investor days, Greg Eble, he's the CEO of n y N Bridge Energy Basing, Calgary, Alberta. So away out there, one of those seas I really want to get to at some point. It stuck a little investment banking, little Wall Street stuff. We had some investor days. We're done with earnings. We can kind of look back. We can also talk a coin base with

Shinale because yesterday she talked to Brian Armstrong. Yeah, and Brian Armstrong was not on Bloomberg, which I think you know what it was? Simulcast, dude, was it? Yes? I wanted a separate Okay, I was like, why isn't he in our Rain Radio studio. Sinali bask Alison Williams, Bloomberg Intelligence. Shinnali Bloomberg News joins us here. So Snai, real quick, what's the feedback you got on your discussion with our

friends from coin Bass yesterday. Two things here. One is that he talked about how a lot of the assets on coin base were associated with the CFTC. They were commodities. And of course we know that the SEC is very concerned about certain assets being defined as securities. So that is going to be very telling about how this fight really continues to play out. But Gary Genzel and the SEC have said that their staking of ethereum is a

security not coin basis. They've said, krack in staking service, okay, right, and they find cracking like thirty million bucks. Yeah, and they didn't admit or deny any wrongdoing, but that was the size of the total payment here, so yeah, I mean, if you pay somebody thirty million dollars, you don't have to admit or deny any wrongdoing. Clearly something happened there. So really, Brindan Armstrong is, you know, trying to exode a lot of confidence here, trying to work with the regulators.

You know, he wore a suit. So I think this kind of shows you a lot about the place coin base is trying to take in the crypto world and try to bridge traditional finance with crypto. Hey, Alison Alson Williams Bloomberg intelligence. Also on our Bloomberg Interactor Broker Studio here, you were at Goldman Sachs yesterday. What's kind of your takeaway from Goldman from the investment banks, what's kind of the narrative you're on the big investment banks. So I

think it's still all about the economy. Right, So we wrapped up the fourth quarter. We've had Goldman Investor Day. I was disappointing. Goldman, I think was disappointing on sort of both fronts, you know. And I think we talked about the fact that, like to me, they're killing it in their core business, right, so trading, gaining significant share, M and A, which is a lucrative business. You have all these boutiques that you know, have popped up going

after that business. There's still number one for a long time. So I think that the quarters started out pretty strong in terms of trading. Question for you, Allison, because if some people are so upset about the consumer, but the reality is with rates up, do you think that what Goldman is trying to do, David Salomon is trying to do is just say hold on, like we can finally make money and consumer, let us try to do that. Is that kind of what he's trying. Can he say

one thing or the other? Well, I think you know, it's funny because I think where they what they're doing is we're going to focus on the consumer in the in the areas that makes sense, right, So the Apple card and the GM business, we're going to focus on those areas. The balance transfer business, which you know, to me never made sense for them. It's I don't know what the competitive advantages of doing a strategy that came out in the nineties. It's never really been a winner, um,

and does not work well in a higher rate environment. Um. So moving away from that and keeping the more profitable businesses um. But you should have just said it like that. He should have said, you know what, this was a bad idea. We made the wrong decision. We're going to move on from that. Well, we keep a couple of pieces of this business. Yes, but we're done. The consumer business is dead. Put it it's what do you put a fork in it? Right? It's over, and that's I

think people would have been happy with it. They didn't come out and say, well, I think I think what they did say is that they are looking at strategic options, right, So I think people got excited like, oh, they might sell it, and then you know, analysts are like, oh, you gonna sell this quarter, You're gonna sell this and that. That's when he was kind of like, Okay, look like we've told you what we're going to tell you. We

can't say anymore. All right, Alison Williams, Shinelli Bassek, give us a little bit of a round table here on all things Wall Street. Let's talk eighteen ft. Is that okay with you? Absolutely? I love ETS. I have a whole show dedicated to ETFs on Tuesdays no on Mondays at one pm Wall Street Time. Yasmin daya builder joints us here in our Bloomberg Interactor Broker studio. She's head

of ETFs and managing director at Engine Number one. Yasmin, thanks much for joining us here in our Bloomberg Interactor Broker studio. We appreciate you coming in. Just give me the thirty second call on what is it? What do you guys do at Engine number one? Yeah? Sure, thanks for having me. And to Number One's an investment firm and we're focused on identifying and investing in large scale

transformational themes. We're best known by many investors for our activist campaign where we got three people on the board of directors at x on Mobile, and I think that campaign sort of shows two things of how we focus. Number One, we come at some of these questions around, for example, climate change environmental issues from the lens of an investor. What is additive to shareholder value for a company over time, not ideology or morality of climate change

for example. And secondly, we're active owners. We work closely with the companies in our portfolio to think about where are the things that they can do to be more accountable to their plans or accelerate their plans. Have you ever met Vek Ramaswami. I have not personally. Now, okay, so he's this drive guy. Yeah, I think he's running a real president. But he will tell you, or he tells us, that he's not anti ESG. He just wants to maximize profits. And I had thought of engine number

one as being an ESG play. But you're saying that's not the case. Absolutely not. In fact, I think this is actually one of the hard parts of the market,

is this terminology around ESG. So maybe I can spend a second on that and they'll talk about us ESG investing predominantly is about trying to rate companies and rank companies and so rating them by environmental criteria or social criteria and really ultimately saying what's the best company in the portfolio based on that criteria and what's the worst. The problem with that is, number one, all of that is very subjective. What's good to me may not be

good to you. And secondly, that whole process is completely delinked from performance. None of that involves how does this actually relate to a company's long term prospects and value creation. We're really looking for where there is an intersection between criteria in these spaces and shareholder value. So we're absolutely looking at this in the investment from the investment lens, and our goal is ultimately long term investment performance for investors.

All Right, So, I know, Yasman, you guys focus on a lot of thematic work in your ETFs, and we were just talking about supply chain talked to us about how what are some of the themes you guys are working on with your ETF business. Yeah, I think theme based investing is very interesting and from our perspective, one of the most interesting themes right now is the relocalization

of supply chains to North America. Now, to talk about where is this investment going, you actually kind of have to spend a little time on where it's been, which is that for the past forty years, companies have really been focused primarily and almost exclusively in their supply chains around financial efficiencies, so moving huge parts of their supply chains to lower cost regions, eliminating redundant season supply chains.

Which the best way to see this is just look at US manufacturing over that forty year period of time. I was just talking about US lost. The US lost seven million manufacturing jobs, so enormous and magnitude, but it actually left companies very exposed to a lot of i'd say unintended consequences. Ultimately, supply chains were proven to be very fragile. So the big trend right now is bringing back parts of supply chains to help create more resilience

supply chains. And we think there's a lot of investment opportunity out But does it make sense, I mean, reassoring is the you know, popular term. Does it make sense to bring them back to the US because we still have high labor costs, right, or does it make sense to move away from countries with whom we may have, you know, our differences, but bring them to places like Mexico where they have much lower I mean, this is

the old story. When I was a kid college, we studied machiadoras in Mexico and that was a bad thing back then. But now bringing a company back and putting it it's production in Mexico is a good thing. Yeah, it's a really good question. So first of all, the cost differentials and labor advantages between the US and China, for example, have narrowed, and in fact it's lower costs to produce certain goods in Mexico now, So your point, So the opportunity is really broadly North America, I would say,

in a big way. So that's point one. Point two. Automation and innovation is going to be an important part of this, because you're absolutely right. There was a reason why many parts, in all parts, frankly of supply chains were put abroad. It was cost. So when bringing certain parts back, you have to think about, is there a way to actually make your manufacturing processes, your manufacturing factories more efficient in the way they operate to help combat

that cost differential. And that's one of the big areas we're actually investing around, are there also positive? I mean, you don't care about climate change on an a moral ground, but if what you're doing happens to be better for the climate, doesn't that please your investors? I mean, we spend our time understanding how these issue areas impact broader stakeholders because it's an important part of understanding risk for companies.

And certainly the relocalization of supply chains to North America should actually lower emissions over time, just given the regulatory

standards we have around environmental standards in the US. I'd also say it's going to be hugely impactful for job creation in the US, particularly in the manufacturing sector, and we spent a lot of time looking at when their local plant is built, what does that actually do in terms of, you know, the types of jobs that are brought back, the wages of those jobs, and I think importantly the multiplier effect of that, you know, the extra jobs that are created indirectly around that, And so I

think that will actually be a huge, hugely important. By the way, I'm not sure how much you're focused on this, because that's I guess a longer term right, bringing these production facilities back and those jobs will be created over the next years, not months. But is it inflationary It certainly can be. Yeah, that's one of the big thesis across our whole broader. I mean, we're focused on the reindustrialization I would say about North America and implicit and

that is an inflationary pressure. Yes. Another big theme I know you guys spend a lot of time on at engine Number one is energy. What are some of the plays and where you're seeing some of the flows go. Yeah. Absolutely, So, just to say up front, the energy transformation, as we call it, is one of the biggest investment opportunities that sits in front of us. By some estimates, it's going to take three to five trillion dollars of investment per

year to decarbonize our economy. So we're talking about massive investment dollars flowing into the space. We have a very different point of view than most classic climate strategies. A classic climate strategy would be built in a way where it's if you don't like it, you don't own in, so you avoid the largest emitters, the largest companies and sectors. From our perspective, some of the biggest investment opportunities are

places like agriculture, transportation, energy. Basically, seventy five percent of global greenhouse gas emissions come from those three segments. That's the heart of the energy transition. So where we spend our times across those value chains and just looking for opportunity in those spaces, which you know most most places would be just trying to minimize your emissions in your portfolio today by investing in sort of younger green technology solutions.

What do you think about those younger green technology Are they just not ready to generate profit or oh it's an and not nor I mean, but that's that's I think the bigger thing here is just widening the aperture of where you see the opportunity. A good example of this would be transportation, just to talk about the whole

system altogether. When most people think about what's the opportunity in the energy transition for transportation, those electric vehicles, and they'll own the companies that are the leaders leading automakers and electric vehicles. But there's so much more to the investment approach that you have to think about. For example, metals are an important component of batteries, which are obviously going to be a important part of being all electric.

Mining equipment is needed to get those metals out of the ground. Another type of company you can invest around, and then transportation, how are you going to move all those inputs around. So we just define the opportunity a lot broadened, and I would say most investors do, who I think see it more from one sort of sector level lens. I'm learning a lot here. So where are the where do you see the flows in that? In the energy space, where do you see the flows going

the most? Are people just looking to get the latest technology or can you get them to think bigger pictures and the and the metals. By the way, we just have a big BusinessWeek piece that forward, among others, is sourcing aluminum from minds that are allegedly polluting you know, whole communities in the Amazon. Oh. These are complex, complex topics, which is why I think this is one hundred percent

the space for active management. It is very difficult to just kind of set it and forget it through an index based approach. I think theme based investing broadly is actually going to have a real kind of tailwind to it because if you think about right now, investors have to be hunting for differentiated sources of growth in their portfolio beyond what worked for them for the last ten fifteen years, which is just let me go to the

lowest cost market cap portfolio i can. And so I think some of these themes, but particularly active managers who can play it in a really dynamic way, it's going to be very interesting for investors as they build portfolio. I think you've got one of the best seats on Wall Street, which is having a title head of ETFs anywhere. The growth in ETFs is pretty amazing believable. I mean it's just you know, so we can do a whole nother discussion and just on the ETF space and the funds. Well,

what you guys are doing is unique inside that. Yeah, I mean my favorite thing about ETFs is it's both growing and evolving. I mean, it is a huge source of growth, but also if you look under the hood, the number of strategies that are coming out on the types of dynamic investments you can now access is so much wider than it was just five ten years. It's amazing good stuff and I learned a lot today. Yasmin,

thank you so much for coming in. Yasmin DAYA build your head of ETF, managing director at Engine Number one. A very smart discussion ever. Thanks for listening to the Bloomberg Markets podcast. You can subscribe and listen to interviews with Apple Podcasts or whatever podcast platform you prefer. I'm Matt Miller. I'm on Twitter at Matt Miller nineteen seventy three, and I'm Fall Sweeney. I'm on Twitter at pt Sweeney. Before the podcast, you can always catch us worldwide at Bloomberg Radio