Welcome to Inside Active, a podcast about active managers that goes beyond sound bites and headlines and looks deeper into their processes, challenges and philosophies and security selection. I'm David Cohne, I lead Mutual fund and active Research at Bloomberg Intelligence. Today my coast is Athonosios. Sara Fagus, ETF, analyst at Bloomberg Intelligence. Ethan thank you for being my coast today.
Hey, yeah, thanks for having me. Happy New Year. If we're still allowed to say that, I don't know, I don't know, we.
Have to stop.
I think we're okay. So since it's the start of the new year, I thought we could discuss active ETFs, so let's bring our guests on. Todd Rosenbooth is head of research at tmx Vetify and is obviously someone who is no stranger to ETFs. Todd, thank you for joining us today.
It's a pleasure to be here, and yeah, I'll stay. Happy New Year to you both of you.
So, over the past few years, we've seen active ETFs go from emerging to mainstream. From your advantage point, where are we in the life cycle right now?
I think it's still very early days. I believe year end data shows that active ETFs are roughly eleven twelve percent of total ETF assets. Now that's significantly higher than it was three five years ago. But I still think there's a lot of room for growth. I think there's going to be growth. We'll talk about more as these larger asset managers have brought their best and their brightest
into the ETF marketplace. As we've seen active ETFs evolve into and she demand more for the security selection, the discretionary approach to building portfolios from a stock or bond standpoint. So I still think this is early days. I think we're going to be in the next five years we'll see that percentage increase into the higher teens and then perhaps more stabilize over time.
Well what surprised you most about active ETFs last year?
Well, I'm just really excited about the success we saw from the firms that I think about with active ETFs. So we saw Capital Group cross one hundred billion dollars in active ETFs. In fact, that's the only type of ETFs that they offer, and they entered the marketplace just over three years ago at the time you know, or roughly at the time that they crossed one hundred billion dollars.
They're coming up on their four year anniversary. Firms like Tier Price saw its asset base nearly double in overall from a flow standpoint because the firm got greater commitment and greater focus on active ETFs. And there's a whole bunch of other firms. So the fact that we saw what I and perhaps many other people think of as active ETFs as stock and bond picking seed demand, that really excited me.
Okay, you know, active management is really my specialty, and so I really have to ask, do you think the flows last year were driven more by market conditions or is it kind of, you know, a renewed confidence in active management.
So I think the flows were close to five hundred billion dollars that went into active ETFs. I think the matters how we classify something into an active ETF and what is and what isn't. So that's why I'm using close to because I've seen data sources that where it's above that number and below that number. I think this is people having greater confidence in active ETFs. And so I think of this as more of a strategic opportunity
as opposed to tactical moves. The market wasn't that volatile which would make you want to turn to active management. In general. It went up, and people when the market goes up, and it's okay to invest in an index based approach. If you're choosing active, then you're choosing it for confidence. But I guess I'll hedge my own bet a little bit. The fact that we saw growing demand and even stronger demand for active fixed income ETFs. We
did have a more challenging fixed income environment. We saw the FED renew its cutting of interest rates in the fourth quarter of twenty twenty five, and people are going to turn to active managers when they're unsure about what's going to happen in the bond market. We've got the Trump administration talking about replacing the FED share and it's
not clear that it's going to be. If you don't know what's the next move from the FED is going to be in twenty twenty six, are heading into twenty twenty six working with a Rick Reader of black Rock, working with the team at Double Line that are experts within the active fixed income space, I think makes a
lot of sense. So I guess I'll hedge my bet in terms of where it was more tactical perhaps from a fixed income standpoint, but what I'm seeing in the equity space gives me confidence that this is more strategic.
No, that makes sense, and you know our et error I should say active ETFs. Are we still in land grab mode or we kind of starting to enter consolidation phase.
So I think a lot of what we're seeing is that people are moving. So people have been moving from active mutual funds into index based ETFs. That's a trend that's been going on for years. I think some of what's happening is people are moving from active mutual funds into active ETFs, and this from the same firms, And
it's not necessarily a clear, uh one for one. I think I've seen your research out there that shows that a firm that offers both active ETFs and active mutual funds that they're bleeding assets on the mutual fund side and they're growing assets. If that's the right way of using that analogy on the ETF space, I don't know that it's a clear one for one that's happening. But so that's why I think this is still an area of growth. What I do wonder about and if we
might be more moving into it. To me, what is more. I talked about traditional active and discretionary active or discretionary fixed income. The active ETF universe, and you guys know it quite well includes things that are not just stock and bond oriented. They're options based, and the active management is more on the options world. And so whether that's single stock related to ETFs, I can't believe we'd have to say single stock ETFs with a straight face or
defined outcome oriented ETFs. I think that we're going to see more. There's so much competition in that space, and it's less about the brand perhaps, or I don't know that the brand has the same value the way that it does. People are familiar with Tier Price or Capital Group or Black Rock or others as active managers, and they have confident in it. I don't know that that's the same thing in a single stock leveraged ETF or
even perhaps defined outcome ETF. So I do think we're going to see some market share gains and losses happening in that space. I think we might have seen it a little bit this past year, but I think it's going to certainly a car as we move the next year forward. But what do you think. Do you think we're still early days?
Yeah, I think, you know, there's still a lot of managers on the mutual fund side that haven't moved over to the ETF side, and so I think it's just gonna be interesting to kind of see what's gonna happen, you know now with the share class. And I know we'll discuss that a little bit later, but it's something
to watch. And I actually do have a follow up, you know, when you mentioned some of the traditional stock picking or security selection, do you think brand is really going to play a big role and where the money goes?
So, I think brand carries way to get somebody in the door, and then performance is going to keep them inside. And so if some of the firms that have offered ETFs that had a strong mutual fund legacy have kept not only their firm brand name, but the names of the products are same, and those are they're either clone products or they really feel by name or in reality, and so I think that's going to carry a lot
of weight. And they already have a track record that you can perhaps point to either of the firm or the manager some of the some of the other products, again from a discretionary standpoint is we offer active strategies. We're now going to offer you an active ETF version of something, but we haven't really brought that to market in the mutual world. It may have existed in a separately managed account space. Then I think it's going to
help be the brand that gets in the door. And then it's gonna it's going to be whether or not you can you can deliver on it. And so I'm thinking, for example, Reckiner is a is a firm that offers colo ETFs. They are they are newer to the ETF space. They've got a history and institutional history of of focusing on that space. It's gonna they're gonna have to prove and I think they can based on on their heritage, that they can prove that they can add value with
active management. But that's a little bit different than uh, you know, I keep going back to the same ones. So I'll try somebody different. Fidelity that has brought there some of the same name products, you know, the Fidelity Bond Mutual Funder, Total Bond Mutual Fund. It's already established itself as a strong player, you know eight you know, eight close to ten year track record.
Yeah, I'll jump in because I thought you brought up something interesting about how we're defining active. So I think it's just important, Like this whole time active should being quotes right because you said you have single stock, you have the stock picking. But I mean, I'll throw out some stats about eighty five percent of all the launches this year we're active at some component. We now have
more active ETFs than passive. Like on this concept of like over routed and this like tod do you think that like a we are we overcrowded now already or do you think there's still a lot of room and then how do you actually start to stand out, like as there is more products, what actually determines which ones maybe actually are still around five ten years from now.
So I think we're overcrowded, and we're going to get even more overcrowded in terms of the single stock and defined outcome areas the options based strategy. And I say overcrowded in that there's it's a small pool of assets right now, so we have to the universe of potential investors has to expand. People who are are more trading oriented and that are using leverage and doing this on their own to do. Single stocks have to make it into the ETF world the way that we saw, you know,
bitcoin investors make it into the ETF world. Options strategies have existed for years. I think we've seen a number of them. We're going to see more of them as we as the industry gets more creative. I would shout out Calamos for example. I know you guys, and you and your Collie Eric Boucho's has talked about the auto callable space and Calamos was early there. That's innovation and that's been successful. I think it's gathered over five hundred
million dollars in assets. I don't think well, I think we're too crowded in terms of a number of products. But I think we're too I think there's too many mutual funds also, except the difference is those active equity mutual funds are bleeding assets and the active equity ETFs collectively are growing assets. So I think we're going to see firms that have dipped their toe into the ETF marketplace and have had some success and seen the broader
industry success continue to expand. And yeah, at the risk of front running the question, when we get share classes of existing products. I think then we'll start to really feel much more crowded than we do today. Let me ask you, because I heard you, Athan on a on a different Bloomberg podcast talk about, you know, something might blow up because it's a single stock leverage at some point.
Yeah, we were to your point about like the single stock crowdedness. Right, So at first there was like all these several issues were launching the same testa product, so they wanted to differentiate, So they were going after these like small cap might quantum stocks, and there is some stocks that have a market cap of like one hundred million in a two x levered ETF, and we tested this that. Yeah, I don't want to see anything blow up, but obviously we pushed the envelope into what products, what
stocks are being put into these leverage products. So I don't think it's a non zero possibility that one of these ETFs could liquidate in a single day, right, just because of the moves in some of these stocks. But right, that's a different active, right that that you're talking about, that the single stock stuff. But yeah, I think that's a good answer, Like, yeah, maybe there are a lot of ETFs, but there's a lot of mutual funds too,
so I don't know what. To your point, more stuff's going to keep coming, so it may be standing out. It's just going to be harder.
So I want to come back to you on one stat and apologies, I'm going to source somebody else's data. It's not even mine, it's morning Stars data. But dare you and feel free to then edit this part out as appropriate. I'm sure your data would match this as well. But Ben Johnson posted this I saw on LinkedIn that single stock ETF, so at least the way that the morning Star is classifying it is two and a half percent of the assets of active ETFs and fourteen percent
of the number of products. So to your point, Ethan, there's a lot of products that are out there. I think we're going to and I think we've seen closures already happen. I think we're likely to see more closures in that space. Whereas where the discrete, let me bring it back to the majority of it more the discretionary
side of it. I think a firm like Baron Capital that just launched their first CTFs, I feel like they're in it for the longer haul that I think they're going to be committed to the space and hopefully the products are going to be successful also, but I think it's less likely that they're going to close those products, even if they're under one hundred million dollars in the in the in the in this or under a five
hundred million dollars or whatever number. We want to use UH as a as a point of time for success. Whereas the traders who else the t Rex products, I think we're going to see many more of those come and go.
So, actually, something I wanted to talk about, which I think flows naturally from this is trends. And so I know you mentioned innovation and the auto callabowls, and are there any active trends you think are overhyped as we head into this.
Year I've moved into So there's ETFs that I don't think we should have, and I'm not going to name them. There's just enough eat gift and it isn't necessarily up to me, UH to be able to do. I guess I'm happy that I'm talking to the two Bloomberg Research colleagues that I know of that are not crypto advocates. UH. I hope Eric or Zealous I hope Eric listens to this. Yes, uh, happy to have it. But so I think we're going to see many I don't think you guys, and I
don't think that's considered active in this space. But there's there's ETFs that exists that are tied to strategies that I didn't necessarily see of value. And I'm not just naming crypto related once. I'm not. I think the market's going to determine that. So, for example, I was pleasantly surprised at how popular Colo ETFs. I know, I just referenced one of the firms that's there, but the Janis Henderson Sweeter products have been tremendously successful when they came out.
I don't think I was as optimistic about how successful they would be, and I was proven wrong. I think, you know, if I think ETFs are a great access vehicle and you can get the benefits of active, whether it's active in the security selection or active in the implementation or options or what have you, I'll let the market decide and then we've got a pine on those from a success or a lack of success standpoint. So I feel like that's a dodge of a question or
dodging of the question. But listen, we've got how many four thousand children in this CTF space, ethan just I know, David, you've got many more mutual funds there. I treat them all equally until I don't have to know about them anymore. You love all the children, well, some of them I remember their names, some of them I don't. And you come across these things. The market's going to determine whether
or not. And we've seen products that came out of under the or it came from under the radar and emerged, and so it would have been logical to say those products weren't going to survive and didn't have a case uh, and then the market had success. But I think that and maybe you're we're gonna get to an apologies. I know you shared an outline audience. I got an outline on this, but I don't have it in front of me. I think distribution is going to be key for whether
or not a product is successful. Maybe I'll pause there, Maybe maybe we don't want to go down that path.
No, I want to talk about the four thousand plus and maybe another four thousand coming. But obviously a big story for look for twenty twenty six and be the share class, right what or a conversion. So let's just say any of those routes, what kind of like impact do you think the share class ruling or or firms looking for conversions is going to have on just the industry or just active in general. Like that part of it,
just like how much more competitive can it get? What maybe types of strategies do you think are gonna come through or be listed as share classes from some of these asset managers.
So I'm really I'm really intrigued to see how this is going to play out. Getting approval and then coming to market are not the same things as you both would would appreciate, and so I want to see what, not only what products the asset managers come to market with, because to come to market means to convert, to take a non transparent product and make it transparent, and so the industry has moved primarily towards offering ETFs that are
fully transparent from an active standpoint. There's some success stories, and I don't want to debate that here, but there's some success stories some Fidelity and Teriro price that are in smaller number of products but but have have had had success. When you got to you gotta be willing to share your full book.
Uh.
So that's going to be strategies that one makes sense to be able to do that, primarily large cap us equity strategies. That's going to be ones that have capacity to be able to not have to worry about closing. Again, good real world problem to be able to have, and where the management team is fine showing their hands. So it's a relatively low turnover. I'll go with relatively low turnover strategy at least out of the gate. So I think we're going to see products in twenty twenty six.
I think both of you all see at the Exchange conference in March of twenty twenty six. Will I know we'll I have confidence that will have products that'll be out from Dimensional Funds and FM and maybe a couple other firms that have been very eager to come to market. But I'm still a little skeptical as to how fast
we'll see. Some of the other firms that have a well established lineup of strategies, are they ready to bring their usual fund client base into the ETF marketplace or even smaller firms I reference Baron Capital, they and tweety Brown or a couple of the firms that I saw that have gotten the next step of approval. Those are mutual fund franchises with mutual fund more oriented shareholder bases. Are they ready to bring those people into the ETF world? I think they should be, but are they set up
to be able to do that? And I don't know how fast that happens? Do you guys, well, I mean, let me get your take. I realized this is not my job to ask you the question. But my gut is that we're going to see in the in the hundreds, low hundreds, maybe hundred, one hundred plus or so tops products that come to market in twenty twenty six is I don't know. I'm not putting a hard number on that. Do you guys have a number in mind of active share classes that come to market in the next year.
I don't think it's going to be high. I think it's going to be slow going. I think there'd be a lot of wait and see from some of these
firms just to see what happens. And one of the things I, you know, last year, one of the things I was waiting on just from the mutual fund side is holding holding reporting was supposed to go monthly for big funds, like it was a go over a billion, but that got pushed, got pushed another couple of years, and it just seems like the industry there's a lot of firms that do not want to show their holdings, and so if they don't want to show their holdings monthly,
with like another lag, you know, why would they want to show their holdings daily. And so I think there's still a lot of apprehension for a lot of firms, and so I think it'll be slow going in twenty twenty six. I don't know what's going to happen after that. I think it could pick up after that. Yeah, what about you?
Yeah, I think I agree, And maybe I'm just too cynical. But I also think the stuff they're going to roll out might not necessarily be their best stuff at first. Like if you have a really good fund that's has good star ratings, could performance, maybe that's not the one you start with. You sort of start with these other ones first. They maybe have smaller assets. But let's obviously we're very pro ETF here, right, But Todd, is there
maybe with either share classes or conversions? Is there actually strategies that you think do not make sense in an ETF.
Like, I know.
Everyone wants to push to go towards ETFs, but is there maybe once or even Dave, this might even be a question for you, like where is it, Hey, you don't need to be an ETF. It's either because you're giving something up, or because of the transparency, or because of the liquidity that maybe it doesn't necessarily make sense to be in that wrapper and stays in you should just stay as a mutual fund.
So, Mike, I don't have a great answer. Again, I'm a former mutual fund annalyer that became an ETF analyst and so is aware of what's going on in the musical fund space, but not enough. But the active small cap space. We've started to see products that have come to market, and but most of the products that exist
in the active small cap space. And I'm going for gut not from actually the data I think are more in the systematic approach, the avantas, the dimensional funds, the very broadly diversified not taking on that much beta or taking them, you know, trying to add that much alpha being beta, Like that's that feels like an insult that's not intended as an insult, but lower cost, well diversified holds thousands of positions and not in the below one
hundred positions. So if you want to concentrated small cap strategy, if you believe in stock picking from a small cap approach, mutual funds might make sense because one that's where it exists, and two, if you are successful, then the closure can happen. That's an area that I probably I'm going to fall back on. There's I'm not sure that I can come up with that. I'm gonna go with that. That's the one I'm going to fall back on.
No, I would agree. I think capacity issues is kind of the still the big hold up on and some of the mutual funds moving to ETFs, and yeah, small caps, microcaps especially, I can't imagine we'll see a ton of microcap ETFs and even you know, you talk about emerging markets that are emerging market ETFs, but then if you start getting into the even the front tier markets, I start to wonder about capacity issues there as well.
Yeah, one thing that comes to mind is like kind of on the private equity side, like we saw this XOVR ETF fright to cross over the holds some SpaceX, but there was actually a problem that when more people came in the way and SpaceX went got watered down. So I would think that would be a case that they wish they could maybe close the fund right because the existing shareholders are getting watered down. So I don't know if maybe private assets falls in that category two,
but yeah, definitely be interesting to see. Like I agree, I think on the small and microcap I think that's maybe one strategy that they It could become a problem if they get too big.
Yeah, I mean so in some of the even US equity mutual funds, I'm going from pulling back from years of memory on it. But where they own private placements, obviously that's that's something you can't do. I don't think you can do in the ETF apper you'd have to mark mark to market uh that much more work daily uh, or have would be all over the place, uh for
the for the ETF. Yeah. So if that's if that's if you, as if we're thinking about from an investor standpoint, if you, as an investor believe that that's a value add that your active manager can provide, then you'd want to have that you then you'd want to make sure that that was possible and it would exist in the mutual fund where it wouldn't exist from the ETF standpoint. But there are again, there are also, David, you know
this better than I do. There are mutual funds that are active equity mutual funds that are gathering assets that people are staying loyal to and adding money to so that that they're doing so for good reason.
Yeah. Yeah, I mean, there's definitely gonna be a lot of legacy holdovers that will still find success no matter what. But as you know, the industry as a whole, though it's going ETFs. I did want to switch gears just a little bit. And I know you speak to advisors, so I think it'd be great. This is a good question for our audience. You know, how our advisors actually using active ETFs today? Is it you know, for alpha building blocks? What are you hearing?
So it depends upon what type of product that it is. So we work and just as much for the audience to better understand the lens that I'm focusing on, we add Verify. We host virtual events with some asset management partners.
Speakers and the audience are financial advisors, and we're routinely asking them questions, survey questions, poll questions, whatever you want to phrase that during our events to get an understanding of who that audience is, what they're interested in, and help that help use that to help drive the overall conversation. So it depends if we're doing We've done events with a firm like NEOs for example, that offers defined outcome.
They use their active management. It's on a tax efficient approach using options tied to the S and P five hundred with the product like SPYI or the NASDAQ one hundred like QQQI. What they're doing is what the investors that are coming and listening to that have told us is many more of them are using an options based product to generate enhanced income and using that as a compliment or a replacement to their S and P five hundred or their NASDAC based strategy. So that's a compliment
to generate income. Whereas we've hosted events with Tierro Price where their products are more discretionary stockpicking equity strategies, and so what they're doing is trying to outperform the S and P five hundred and looking to do so with security selection. So I think that those are just two examples of use cases that we're hearing from people. It's it's a little hard to ask an audience that hasn't opted itself in that question, so it's somewhat self selecting.
The people who are coming to learn about options income are using options income strategies as a compliment more than I or to be able to generate that income, whereas, of course the discretionary folks are doing differently. We haven't asked the full audience because if we tried to get everybody to respond to such a question, we wouldn't get them because they weren't as engaged with us. So again, answer and maybe a bit of a make sure that you know the data that you're working with.
I really like that usage question, and I don't know, Todd. Are you finding what's a You mentioned barn Right that had come to the market for their ETFs, and I think, David, you've written a lot about this like it's a good fund right Their strategy has been really good over time. Do you find that, whether it's advisors or retail investors,
are they using the ACTIVETF properly? Meaning are they and holding it for the long term, or are they trading in and out of it and then thus maybe doing themselves at the service it's not committed to that strategy long term.
So I think the flows would and not picking up I mean that Barren products have not been out long enough for us to use them as a full study. And I also can't I don't want to go off the top of my head in terms of not looking at such data. But the flows data that I've seen shows that people are using the active ets that are intended for longer term strategies in a longer term manner.
The single stock oriented ones obviously are being traded and or hopefully they're being traded much more frequently in and out. Otherwise people are going to get hurt. But their asset base suggests that that's the case. To me, I think people are doing or using them the right way. What what I'm I'm going to answer your question the way
that may not have been intended. What I'm a little concerned and want to make sure not that we're gonna have maybe the audience here is going to learn as a result of this for how to properly trade in ETF. But my my concern is we bring more people over from the mutual fund world into the ETF space. Is that trades get put in overnight and executed at the open. People are trying to do things at the close, and you know, as you guys know, that's just not the
way you should be buying. Is selling an ETF limit orders. I will be the eightieth person who talks about ETF trading that uses the phrase limit orders this year. I listing eighty people have done that, as he pops into his own head. But you know, trading the right way that you should within ETF. So'm I'm more concerned that people are not trading or thinking of it is a trade then more than they're trading too much.
Yeah. Well, that's actually a really good point. I've never thought about it about let's say a conversion, right, if you're using a mutual fund, you used to putting in your orders, they get executed at nav versus. Now if a converse to an ETF, there's a whole new trading dynamic, right that you might not be used to when you're putting in your orders. So, uh, I think you gave us some research ideas that we can really explore. So yeah,
thank you for that. Yeah, that's a really great point on this, Like like David did a good job of like identifying someone like Ron Baron who's like performed really well over time. But obviously beating the market is hard, right, Like we've seen the spiel of reports, and David does a report too about it, like just active it's hard to beat the market over the long term. And now you have all these single stock ETFs. Do you think in the way investors might be looking at these active
funds saying, hey, they can't beat the market. I have all these like leverage, single stock tools. Now maybe I just become the new stock picker, like I can beat caffy Wood and shifting that away from like the active manager decisions. Do you think that we see more of that as we see all these single stock ETFs and people just having this confidence that hey, the market only goes up all the time. I could beat the market. I have these lever tools, and I'm the new stock picker.
I don't need this XYZ manager.
So yes, I think that I think we've we've been in that world, whether or not the individuals fully in that world, but we've certainly seen, you know, the growth of ETF strategists and model portfolios where they're using index based ETFs primarily to overweighth this and underweighth that on
a sector or a style or investment approach. To do it on a a single stock leverage approach is dangerous because you're not picking I mean, I guess you are picking the stock, but you're also picking how much that stock is going to move in that short period of time.
So in that scenario that you were talking about of using individual stock or single stock leverage ETFs as the way of trying to outperform the market and doing that on a daily basis, sure, I think that's I mean, that's probably had that's been happening outside the ETF space, of people using their brokerage account and using leverage. That scares me. I mean, I didn't know that those people existed outside of the ETF world beforehand, and I didn't
know them. But now if I know them because they're part of the ETF world, then that then I'm more concerned about that. I'm assuming you were talking about that scenario as opposed to somebody who's using the different sectors of the S and P five hundred and overweighting based on.
Yeah, I mean just more like, Okay, the stock pickers have always been there, they can trade stocks, but now it's like, hey, like you want to buy in video, but like now you're two x and video and maybe you see what let's say Kathy Wood is holding, and I can just buy two x versions of all these ETFs and try to just I don't know if it's you know, this get rich quick mentality or I can I can do better than them, and I have these tools that didn't exist five or so years ago, and
that's what's sort of been feeding into this, like the new stock picker I can it's been being a DJ and the more risk I've taken has been better off.
And I don't know how this age is.
Obviously the market can change, but I was more thinking just about how not necessarily just using this leverage stuff, just how that more ETFs have gone back to hey, you're the new you're the stock picker. You know.
So I think if it's using broadly diversified ETFs to do it tactically, and they're very low costs and on most platforms you can trade them commission free, yeah, I'm I'm for that, even though the more you trade, the the more you're likely to fail in doing trading. I think I'm more I'm more advocating for someone to take a more strategic approach and a tactical quarterly overweight this and underweighth that from my mindset. But starting people are
doing that. The ETF vehicle is going to make that better for them. I think that's going better in that it's going to be easier to execute, not necessarily better in that it's like you're playing with sharp objects with single stock leverage gtfs. You have to do so carefully. I don't have confidence in my ability to be able to use such sharp objects, so I'm not using them, and I'm going to leave it to somebody else to be able to do so. I don't have confidence in
my ability to necessarily do security selection anymore. I don't have the time to be able to do that. So either I would be again I'm not going to reveal my book, but I am doing things that's more strategic in nature, or I'll pick a couple of active managers that I have confidence in that they have the full time job and a team of resources to be able to do that on my behalf.
So I've got one more question before we go, you mentioned the portfolio manager. You know, with mutual funds, for years we had star managers, and as we move into the ETF rapper, do you think that era of the star manager is feeding or evolving?
So I think it's evolving. I mean, we have some of the stars of the mutual fund world, and it's more I feel like the names of portfolio managers. We've referenced Ron Barron, so he's an example within the equity space, but more of them are in the fixed income space. I name drop Brick Reader earlier, who's got a couple I think successful ETFs. I think I name dropped the double line guys of Gunlock and and Chairman and Team. I'm probably failing to name other ones, but it was interesting.
I was with Jay Jacobs of a Blackrock earlier this week and he referenced the name of the manager of BAI, which is their artificial intelligence ETF, Tony kim And I think it was intentional that he was referencing the name of that manager, so that I'm sure Tony kim Is has a great record and great pedigree, and the data shows how well that this fund has been performing. But I hadn't known. I don't know that the average investor would have known of Tony Kim, but this was I think.
I think we're seeing asset managers and I think they should lean in. If you're going to trust our security selection, you should know the name of our security selector for ETFs And I don't know who. Did you guys know? I'm going to put you both on the spot. Did you know the manager? Would you know the name of a manger of an active ETF if you didn't know it beforehand? In the mutual fund.
World, probably not. It's tough.
There's so many it's hard enough to remember the four thousand children tickers we've got to come up with, right, so the names of the portfolio managers that go with them.
Yeah, it's tough, but this was a great discussion. Todd, thank you so much for joining us.
It's a pleasure to be with you this way, and I'm excited to see both of you, I hope at the Exchange conference in mid March in Las Vegas.
Great Ethan, thank you for being my cost on this episode, and I do want to thank our listeners. If you liked the episode, please subscribe and leave a review. If you want to see more of our research on the terminal, go to BI Fund, Go for fund and Active research and b I ETF go for ETF research. Until our next episode, This is David Cohne with Inside Active
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