Perth Tolle on ETF Freedom Metrics

She'll tell us how she starts with a data set up from various think tanks like Frasier and Cato that rank countries based on their freedom indexes, and then proceeds to put them through an algorithm that she helped to create. And what you end up with is a list of some of the most innovative free emerging market countries in the world that also end up doing really well and acted over the past couple of years. When you see how poorly China has done, and obviously Russia's have seen

all its stocks go to zero. Uh, those have not been in her funds, and so on a relative basis, her fund has done really quite splendidly. You avoid some of the worst countries in the world in a n e M index, obviously you're gonna do well on an absolute basis. They've done well. Also, just go punch in f R d M and you can see how all the fund has done over the past couple of years. It's about two hundred million dollars in assets. It's just turned three years old and just became a five star

Morning Star rank Mutual Funds. So really quite fascinating. If you're at all interested in ETFs, emerging markets, or innovative new ways to slicenseise the world of assets, I think you're gonna find this to be a fascinating conversation. So, with no further ado, my interview with Perth Toll. This is Masters in Business with Very Results on Bluebird Radio. I'm Barry Retults. You're listening to Masters in Business on Bloomberg Radio. My extra special guest this week is so

what I've known for a long time. Perth Toll is the founder of the Life and Liberty Indexes. She is also the sponsor of the Freedom one hundred Emerging Markets et F. It's a first of its kind strategy using personal and economic freedom metrics as key factors in driving the investing process. Perth has lived in Beijing and Hong Kong. She currently lives in Texas. Uh and her experiences overseas is what helped lead to the Freedom and Liberty Indexes.

Perth Toll, Welcome to Bloomberg. Thank you for having me, Barry. I've been waiting to do your podcast for a very long time and I honored to be here. I'm thrilled. I'm thrilled to have you. So let's start with the basic inspiration. I love the concept and it's amazing nobody thought of this. But previous to you, what was the inspiration shin for the Life and Liberty indexes? So the seed for the idea was planted when I went back

and lived in Hong Kong after college. I was born in Beijing, and I grew up in both China and the US, um going back and forth between the two countries. After college, I went and lived in Hong Kong for about a year, reconnecting with my dad's side of the family.

And while I was there, I traveled to the mainland to Beijing, Shanghai, shen Jin, um and I saw things that um as a person who grew up in a free society, mostly in my formative years, that shocked me and I realized that my life would have been very different had I stayed in China for my entire childhood and as opposed to having come to the United States. UM. So it made a difference in my life, and I

realized that it was freedom that made that difference. So let's let's talk a little bit about both UM personal and economic freedom. How do you use these metrics as creating an index which the e t F is based on. So the metrics that we use come from third party think tanks, the Cato Institute and the Fraser Institute. And this keeps all the all the metrics completely quantitative and independent. So we think it's very important to have metrics that

are robust, that are independent, and that are quantitative. And so the Cato and Fraser data set that has the human Freedom metrics encompasses both personal and economic freedoms and they rank a hundred and sixty five countries in the world on these seventy nine different metrics. UM. We take the twenty seven country Emerging Markets UM universe and just look at those countries and those scores for those countries based on the seventy nine metrics. Is the primary factor

that goes into our country waiting. All right, So you have twenty seven E m countries. Uh, you're looking at the freest ones in terms of economic freedom and personal liberty. And then from that list, how do you go about selecting the comp nice from within each country. Yeah, so let me just run down the whole process just quickly

for you here. So, so, first we had those twenty seven countries, and currently we're using the same country set as m c I because most of our clients to benchmark to M s I. Now we're not bound by that though, so in the future we may add or subtract certain countries from that universe right now is the same as M s I. Uh. First, after we have that universe, we look at which countries are actually big enough and tradeable enough to be in an e t F because this was always designed to be an ETF.

So you need liquidity and volume and the ability to get money in and out of the country. Yes, so, but mostly we're looking at the market cap of the country here as a as a ratio to world market cap. If you don't meet our minimum ratio, then you're out, even if you're very free. So this actually eliminates very free markets like Czech Republic, which is too small, um Peru, which is not liquid enough, and it also eliminates some very unfree markets like Egypt because of size. So we

have those eliminations based on market cap ratios UH. And just to clarify, when you say size, you mean size of the country, you mean size of the companies. The market cap real the market cap, so you don't want micro caps. So we want to keep it very liquid and very tradable. So once we have those countries eliminated, then we have about eighteen countries left in the eligible universe, and these are the countries on which we apply the

freedom weights. It's a hundred percent freedom weighted. It's not a it's not a tilt, and it's not in an overlay. And the reason why we do that is because with market capitalization waiting, which is the standard for most indexes, including Emerging Markets UM, you end up with a lot

of autocracies with this universe. So the emerging markets universe is filled with autocracies and countries just coming out of autocracy, such as give us some examples like China, Russia, Saudi Arabia, Turkey, Egypt, and so forth. So by freedom waiting instead of market cap waiting, we're seeking to solve that problem of these

autocracy heavy concentrations in the emerging market space. And so we created this for people who want to have that exposure to emerging markets, people who always have either strategic allocation or just always want that emerging markets exposure. UM, but without funding autocracies. So there's no we've never had any China, Russia, Saudi Arabia, Turkey and so forth because of freedom waiting, not because we you know, arbitrarily excluded in any country, but it's just a natural result of

that freedom waiting. So you have the set of twenty seven countries in MSCI that gets reduced to eighteen by size, and there's got to be thousands of potential companies win those eighteen countries. But do you select and how do you get there? So the most important part once we have those eighteen, we do freedom weight those eighteen countries.

As part of that process, the worst offenders are excluded, so the lowest scores are excluded out of this in this process and the best of those eighteen and typically it's between ten and eleven country are included in the index. And that is a completely objective process. UM. That's rule space. And I you know, my subject of opinion doesn't factor into that at all. So now you're down to ten or eleven countries, how do you take? How many companies

do you take from each of those countries? Yeah, so we take the top ten largest most liquid companies in each country that is not a state owned enterprise. And that's the only thing that we do on the security level. So we're just taking the largest most liquid companies that

are non state owned UM. And the reason why we didn't add any additional factors so that obviously I work with a lot of UM factor people UM, and the reason why we didn't add factors to that is because we wanted to isolate the freedom factor for this product. It's our first e t F. It's the first Emerging Markets e t F in the world that uses freedom waiting, and so we wanted to see if there was a market for this type of product and see how I

would go UM and we're very happy with the results. Yes, so you end up with companies more or less, and that's that's what's in the t F. Yes. So currently there's eleven countries and there's a hundred and ten securities in the e t F. In the previous two years, there's been a hundred securities and ten countries, and that's

why it was called the Freedom one hundred. And the index has been outperforming pretty dramatically over the past a couple of years, in part because China seemed to have imployed itself going after their own their own senior tech people will talk about that later. And obviously Russia was just a debacle. You sidestepped all of those because none of those countries are in the index. Yes, and again

we don't arbitrarily exclude China or Russia. We didn't have them in there any of this time because of the it's a natural result of that freedom waiting. So freedom waiting in this case worked very well and it was a very effective leading indicator of some of these tail risks that investors in these cap weighted index has experienced. And if I recall, the E t F symbol is f R d M for freedom. Is that right? Yes? Very interesting. So let's let's talk a little bit about

the world of ETFs. First, Y and E t F instead of a mutual fund. What was behind the thinking of going that way, especially given your background. You were a fidelity for a long time, and they have been giant in mutual funds for forever. Yeah. So so once I came back from Hong Kong, I worked at Fidelity

Investments in the l A and Houston markets. UM, and I was at Fidelity for about ten years as a financial advisor, And you know, that's when I started noticing the trend of the rise of indexing and the rise of E t s and how beneficial the E t F structure was for clients. I don't know of any other investment vehicle or structure that is as beneficial tax wise for clients, and so um and trade ability and everything. So so I was always a fan of the E

t F structure. And when I created this, I always intended for it to be an E t F. We created the index before there was an E t F, but I always intended, you know, it was always designed to be an E t F R. The old joke was of mutual funds were invented today, they wouldn't be able to get approved because they're so inefficient. They trade at the end of the day and you end up paying taxes on other people who sold, as opposed to

you paying taxes when you sell the holdings. I mean the trading at the end of the day is not as big of a problem because most of our investors are long term. But UM, that tax efficiency is just so hard to beat in any other type of vehicle. So who are your investors? Do you have any idea who owns cts? So right now, UM, we have about two million under assets and so it's just beginning to be big enough to get noticed by institutions. We're getting

more institutional request at this time. We just had UM a family office demand that we get approved on Morgan Stanley and they just approved us. UM. So we've been approved on a lot more platforms lately because of the size UM and also the three year track record and the five star morning Star rating. Now, also that's one of my questions for later. But since you brought it up, you just got a five star rating on I mean, this was last month. I shouldn't let you bring that up. Yeah,

well it's I was. It's coming up later, but since you mentioned it, we might as well talking about now. Yeah, no, and you know what Morning Star ratings come and go, and I, UM, that was a surprise to me because well I guess it wasn't a surprise because it right, So it just happens at three years thirty six full months, and it's based on performance, So I guess it wasn't

that much of a surprise. But um, you know what I really appreciate about that is that I didn't expect this, this uh strategy to play out, um the thesis to play out this well, this quickly, and for it to have done that in this exact three year period of time when the morning Stars come out, Um, just all the stars had to align for that to happen. We yeah, and we all know how hard it is to get five star morning Star rating, and so for us to have that right out of the gate, I'm very grateful

for that. And I don't take much credit because a lot of that is stuff out of my control. You know, we can't control the market, so um, geopolitics or who's going to invade what country? All these things. Sometimes you know, it doesn't hurt to be smart, but being lucky goes a long way. Yeah, I mean, I think we were set up well just because freedom waiting. Obviously, it's the reason why we didn't have any China or any Russia, and that that helped us tremendously in our investors to

avoid that risk. So so here's the question, and pardon my naivete, but the fund has been doing really well. Geopolitical events have worked out perfectly um for for the Freedom ETF. But go back in any decade in history and there are very similar bad actions by bad actors, autocrats, dictates, all sorts of um other folks. The question, and I don't know if there's an answer to this. The question I want to ask is how come nobody ever thought

of this? I mean, it's one of those ideas that in hindsight is like, oh, of course you pull out the worst players in the geopolitical world. Of course your performance is going to be better. Has anyone ever explored this idea before? You know what I would think? So, um, actually, you know my friend Rob are not who isn't one of our investors, And I first I think I introduce you, you know what, you always say that, but on your podcast, I'm going to say I met him on the seaplane.

That's right, flying into, flying into that's exactly right. So when I left Idelity, and I started doing this very slowly, I called research affiliates and I was like, hey, you know, you guys do non cap weighted indexing. We we want to do non cap weighted as indexing. Do you want to work together? And they were like, no, please go. I couldn't. I couldn't get past the first gatekeeper UM.

And then when I went to to Camp Ko talk is because I was on a panel with David Kotok, Black Rock and Morning Star for a cf A Society's UM forecast panel that first year. I had no idea what I was doing at the time. And afterwards, you know, David invited me to this camp and I was like, what is this. It's like fifty economists that go fishing in the woods next to Canada for three days with no WiFi. And actually my friend said you should go

because Barry rid Holes goes to that camp. Yeah, it was Christian Magoon and Amplify who said Barry rid Holes goes to that camp. You should go and you can meet Barry. And so you are partly responsible for me going that year in more than one reason. And you're also responsible for Rob going that year because he lost the bet and he had to he went to pay

that bet. He doesn't go every year, you know, you know, he hasn't been back since and before that he was there maybe five to seven years prior, took advantage of me. I was very very drunk when he when he said let's make a bet, and I'm like, it was an out of body experience. I watched my right hand should go up and shake his hands and the back of my brain was, what the hell are you doing, you idiot. That's a lot of money and he decides to show it with a brick of cash. It was wasn't even

a check. It's like whack. It's pretty pretty hilarious. So yeah, so that's a funny coincidence. So I vaguely remember introducing you to Rob out on that deck, not realizing you guys flew in together. Yes, we flew in on the on the seaplane because I call the seaplane company the day I was coming in and I was like, I'm coming in from LaGuardia today. Is it too late to get a seaplane? And they said, no, you can share

with Rob or not. Here's his flight number. Just go intercept him at the airport and I did, and I was like like that. Yeah. I was like, hey, did they tell you were gonna be writing together? And and that's how we met. He heard the idea. UM, you pitched him on the plane. Then it's loud and buzzy and you're literally you have those heads five feet over the swamp, your moose and stuff running. I believe he asked what I do? So okay? So it was an

lf field, So he was. He was one of your earliest investors, the first one he invested after camping into the into the company, not as an investor investor that too. So after camp he committed to being the first investor in the at the time non existent fund. And then a while later is when I found out I would have to launch the fund myself instead of just you know, licensing the index. And that's when he became a g

P LP investor. So who else when you say you have to launch the fund yourself, aren't you running this with another group that helps manage. Yes. So my initial plan after I had the index, and this is when I met him and you at camp KO talk and there wasn't a fund yet, UM was to license the index. Who like I shares or vamp or someone UM. I talked to I shares, They didn't want it. I talked

to everyone and no one wanted it. So eventually I just had to launch it on my own um and that's when I said, okay, I'll need to raise funds because the operating costs for an e t f R and no, it's not in substant ential, it's it's between legal and compliance and regulatory filings, and you know, it's a quarter million to a half a million dollars. Well, in addition to that, in emerging markets, we actually give

you access to local shares on local exchanges. So we paid the custody costs of giving you that access to give you that market um exposure, and that's one of the things I'm very proud of and very proud to pay on behalf of my clients. So um so that

that's even more expensive for emerging markets. So we had to raise funds for that, and I ended up, you know, as you know, working with et F Architect prior they were called alf Architect at the time, and their first white label clients, West Gray and the whole crew over there, that that they're actually a really good group of guys and smartest can be. You did introduce me to West Gray, as I recall, h So, alright, listen, I'm not looking for a commission on any of this. It was just

I find West of stuff to be fascinating. He's an interesting guy, a marine captain slash quant just such an unusual background, you know, and and then do really good work. I didn't realize they changed their name from Alpha Architect to EAT. No, they didn't change their name. They have they separated the entities. Oh, so you have E. T. F Architect as one group. That makes sense in an Alpha Architect as a as another group. Will say say hello to West for me. UM, I really like him

and his crew. So we went over twenty seven countries down to eighteen, down to ten or eleven UM and ten most liquid companies within each UH within each country. How about rebalancing? How do you go about over the course of the year keeping things in in line with the original balancing? And then how often do you make changes in the index? Yeah, so we rebalanced once a year, because the human rights data comes out once a year, so the Personal and Economic Freedom data UM, and it

comes out around the end of the year. So we rebalanced the third Friday in January UM and then we leave it until the next year. If something happens in between, we don't respond to it. Immediately and we have to wait till rebalance um. There is a rule that, uh if if if country falls more than five points on one of our skills, that we do kick it out, even if it's already in the index. But we do that a rebalance time. So there's a basically it's a

freedom decline momentum role. And the reason why we do that is we found that freedom. When it increases, it does so gradually, and when it decreases, it does so very quickly, and so we don't want to be catching that falling knife, so to speak. The only country that's ever triggered that it was Turkey, and that's before the

e t F existed. It was when it was just the index, and that was in two thousand eighteen rebalance um and it was because they found more than five points on the previous year's scales and they've never made it back into the index. Sense. So hypothetically, if pre ordawan Turkey is in your holding and then someone comes in who's an autocrat who removes a democratic um election rules and and imprisons his political opponents, they could end up staying in the index for the balance of the year.

Or if it plummets that five percent, you kick him right out. They would end up staying in there until the rebalanced time next year. And the reason part of that is, yeah, there is a lag in there. But we found that these types of political changes do take time to show up in markets, so it doesn't happen immediately. If you've noticed, elections are very often mispriced for this reason. UM, it takes a couple of years for these things to

show up. We I do the freedom meetings with our econometricians at the think tanks every year, and one year UM I was there with the Polish UH delegate from the Polish think tank that works with our freedom guys and UM and this was right before the p I S government gone too power, if you'll recall um and they said, okay, we're about to be like this ultra right wing kind of crazy government and they're going to have constitutional majority probably, but it won't show up in

the markets for a couple of years. And it happened just as he said. Poland was still the best performing market in two thousand seventeen. In two thousand eighteen, they fell to number four from number one in our index UM and they've stayed basically in the middle sense. UM. But now you know, they're taking a lot of steps to support Ukraine in their in their stand for freedom. So I'm glad they're in there. I'm glad they're one

of the top four UM. But they did show that decline, but not until a few years after that government came into power. Because what happens is our data providers they look at what's actually happening on the ground. They don't just look at, okay, what we expect to happen. They're not trying to predict the future. UM. We're not trying to predict what countries are going to have the best freedom momentum upwards. UM. We catch it on the downwards,

but not upwards, because we can't predict the future. If we were to do that, we would have invested in Argentina, if you years ago, UM, or some of the worst countries, because they have the best kind of UM trajectory like expected improvement possibilities. UM. So we don't do that. We take the absolute freedom level at the time of measurement UM relative to their peers, and there's no you know, there's no a hundred percent free market and there's no

percent on free market. Um, it's all a gray zone, and so it's just relative to your peers. You know. When we just take the freest countries, all of these countries have problems, even the developed markets, even the United States.

We're not free here obviously. So all countries have their issues, um, and we just try to pick the ones that have the strongest institutions, best role of law, best individual and investor protections, private property rights, intellectual property rights, things like that, and just make sure we're giving our our investors the you know, exposures that are the freest of that universe. Let's talk a little bit about what's been going on

in China and in Russia. Starting with China began cracking down on some of its tech leaders and technology companies a couple of years ago, and it was really surprising to see your government really start bashing their own economic leaders. When you're looking at that from a distance, you have to be thinking, well, I'm glad I don't have these

guys in my index. You know what. It's it's a bittersweet thing, because yeah, it's it's a it's good that we didn't have them in there, but it's terrible thing. What's happening because you know, being from China, I want China to to succeed. I want them to be free UM eventually. And I you know a lot of people like myself years ago thought that we were on that trajectory because China increased in their freedom levels a lot

UM in the last couple of decades. You know, they went from abysmal policies under Mao too not so bad policies. They opened up economically and UM you know, had great success there and their GDP grew tremendously and that was very real growth people lifting themselves, was up out of poverty UM and very powerful UM growth story. But now grows story of the past because they are that growth story of the past. You don't think there's a lot

of growth exactly what you just mentioned. So you know, they're the star sectors like tech or we're being are now being cracked down on UM jimping has consolidated power is continuing to UM DIC. Yeah there's em peripheral life and uh and yeah, there's no room for any discent. You saw what happened in Hong Kong. Just the just the idea of any discent UM. What about Jack ma and you look at all the companies he's affiliated with. So it all started with and Financial when that was scrapped.

And then Jack Ma disappeared after he said something that wasn't kosher and criticized you know, just you know it was actually very I think, but nine what he said. Um, but he he criticized the government basically the way they handled the financial sector. And you know here in the Knitted States we do that every day. Look at us on Twitter, I mean yeah. And so so the fact that that even that was enough to you know, basically

disappear him. Him being a very visible persona in the exactly and you know, just just a very character charismatic and well loved, well looked up to guy. And uh, you know when he disappeared, I think a lot of people realize, Wow, if if they could disappear your founder, um, you know, you might have some risks there that we

didn't account for. Um. And then following that, all the other tech leaders started, the CEO started stepping down or um pledging a ton of money for Common Prosperity, which is one of their you know, new initiatives, and uh that you know that money came from shareholder pockets and it's basically a bribe. It's not going to common prosperity. UM,

it's just to keep the government happy. And so every company in China now is required to have ammunist cell member and you know as part of their their company, UM, all the funds are now required to have UM communist leader. Uh. Kind of it's like the old mob bosses with y hey, Freddy's gonna show up and he's gonna make sure everything's done right. It does have that feel to it. So so this is very scary actually for someone who I mean,

I roote for China. I want them to succeed. I know I thought they were going to be much more successful at this point. But that's you know, the one problem is they're reversing these policies and going back to very uh unfree even economically policies. Um. The the other problem is the demographics. So the one child policy for a long time. Right by the way, there's there is a lot of UM literature and analysis and even books

written about how China effectuated the one child policy. Yeah, so the one child policy led to thirty million missing women in China. That's that's official Chinese think tank estimates, some others have it as more than twice that um. And this is a hard issue for me because when I went to China um And as I mentioned, I traveled to Shanghai to Beijing. UM. I was twenty three at the time, and I yeah, I had a friend

in Shanghai. Her name was Maggie. She was exact same age as me, just like all of my American friends in every way, um, except she didn't exist on paper. She was one of what's called black children who um I went to school under a fake surname, was a second child, and her parents chose to to register her brother for existence. Basically so um so no school records, no hospital records, no um no state benefits. So it was basically you know everything else. And and that's when

I realized, Wow, that could have been me. She was the exact same as me in every other way and so um so that that affected me in a profound way. And also this policy affected our generation in a profound way. Not only are there pretaty million missing women, there's thirty million men who had no prospect of getting married or finding a wife. And what do you do when you have no prospect of ever, you know, having a family join the military, and so that led to a huge

military build up in China as well. And so, um, this is a policy that made me realize, Okay, so policies matter, governance matters, um, and these types of things have a huge impact on the future of a country, in a society and an economy. Um. And so that's actually what led me to start exploring these relationships speached in the market. So it's funny you said governance matters. I was discussing when we finally managed to book you

for the for the podcast. I was discussing this with I won't mention their name, but we both know them, and they said, well, how is what China is doing to their tech sector any different than what Trump did after he got elected? And I always find it weird when I'm in a position of having to defend President Trump.

It's like, hey, you can't compare obnoxious tweets trashing a company with actual government policies that forced companies to pay a corrupt tax, have people added to their boards by force, disregard the rule of law, sanctity of contracts, sanctity of private property. As as crazy as the Trump era was, it was a lot of noise at least until January six. But I mean during the Trump administration, it was more noise than actual policies such as we've seen in China. Yeah,

I think there's a few differences there now. For first, I don't know who you're talking about, actually, but but I want to say they have a point in that every country has these issues, and it's just a different degrees, right, So we may have had it. You know, we have regulations that effect how our companies operate here Trump or no Trump, And there's a certain degree of government interference in private markets everywhere. Um So, so it does happen everywhere.

You know, we happen to be one of the least worst, I think in the United States. Um and in China. Yeah, it's very different. One reason is you can't push back against it. So here, you see any kind of policy going into place that people don't like, there's a huge amount of pushback. You look at though, the protests post Supreme Court overturning Roe v. Wade. If that had happened, you can't do that if that happened China. Do you

think people could protest the one child policy in China? No. Do you think they could protest when I went to to child and they're like, why did you make me only have one child? You know? And when I went to three child, no, nobody could protest that. In fact, it would. You would be prosecuted for protesting. You would be disappeared. So I can't launch a fund like this in Hong Kong. I mean I would be arrested because of national security law. So the institutions in place right

are important for pushing back. For checks and balances, it has to be a plurality of political parties, there has to be a system of checks and balances, independent judiciary, UM. There has to be a you know, uh, free media as a force to keep government accountable. And so these are all things that we find in freer markets that

we don't see in the less free ones. So you can have a crazy person in charge, but if you have stronger institutions, if you have some checks and balances, free press, that keeps you know, power um from getting out of hand. So so let's talk just for a moment about Russia. Obviously they've become an anathema given the invasion of Ukraine, but even before that, you didn't have Russia in UM, the t F tell us the reasons why a country like a Putin led Russia just doesn't

make it into a freedom index. Well, their their freedom score from the think tanks was too low, and that's why I didn't. How low is too low, so you have to be higher than your peers. And our algorithm assigns positive and negative weights. The negative weights are excluded, so they were How low were they? Is what I'm really getting to. So Russia ranks a six point to

three out of ten UM. As a comparison, Kuwait is six point three four, India is six point three nine UM, and then you get into included countries Philippines six point eight three, Thailand six point eight nine, and so forth. These are the kind of borderline countries. India is borderline sometimes sometimes. Who are the top three in the bottom three?

So top three in emerging markets are Taiwan top one UM, Chile, and South Korea currently, so South Korean Taiwan kind of really no longer emerging markets, right, But you could say the same about China, right, I mean, okay, well that makes sense. And who are the bottom three? I can imagine, Yeah, so bottom three in emerging markets Egypt, Saudi Arabia and China. Saudi Arabia. Saudi Arabia ranks actually lower than China on

the overall score. It's five point one to China is five point five seven um so and one fifty rank out of one sixty countries in the world. So it turns out that taking a bone saw to a journalist and making him disappear isn't good for your freedom index. No, they also have some women's freedom issues. Um, hey, they can drive now, right, But in these kinds of markets, in the free markets, you have to watch rhetoric versus

what actually happens on the correct um. A lot of these reforms that NBS put into place, there was a lot of hope in that country for BS to reform, and you know, we had a lot of hope about Egypt in the Arab Spring also before that all went to hell and then you know, women were allowed to drive all of a sudden. But at the same time that the women were allowed to drive, they put four women who had campaign for women to drive in jail. One of them just was released, some of them are

still in jail. My friend uh manal al Sharif, who is has been jailed for you know, UM campaigning for women to drive in the past and is now exiled in Australia. She did a whole women you know, women to drive movement here in the United States at that time to protest those women being in jail. So in these countries you have to be very careful. There's always rhetoric and there's always a big pr push to make them seem like they're reforming when actually perhaps on the ground,

there's less of that going on in reality. Huh really quite fascinating. We mentioned that you're now a five star morning Star Funds, but when you were first rolled out in the Index, was voted best New International Global E t F and Index. Uh what made people so excited about this theme back in Yeah, you know, that was very a proud moment for us because that was voted by UM, people in the t F and people in

the industry. Yeah. So first, you know, investors would put in their kind of nominations and then a panel of judges of E t F experts UM would vote and so so I'm I'm very honored to have to have that those awards. But I think what it was is that UM intuitively investors. That's just understand that, you know, freer countries have more sustainable growth, they recover faster from draw downs, they use their capital more efficiently, whether it's personal, human,

or economic capital. So you know, capital goes where is welcomed and where it's well treated. And that's Walter riskin quote UM and capital is not just money, it's also people and ideas. And you look at the capital outflows coming from Russia right now, coming from Hong Kong UM

the millionaire exodus. There's I believe more millionaires per capita coming out of Hong Kong than anywhere else at this point UM and I think that just speaks to UM the growth potential of the freer markets UM to be the launch pads for growth in the next decade, so especially in emerging markets where they're coming from this very low base. So I think an emerging markets because there's

such a high concentration. And when we launched, I think China weight was about and most emerging market Russia and Saudi Arabia were in there. Right now, Russia's out, China's down to like thirty, but it's still you know, kind of a high concentration. Saudi Arabia is still in the top ten. You still have Turkey, Egypt and all of these others um so. So there's just a high concentration of these autocracies. And I think people were at the time saying, finally, there's a way to invest in emerging

markets without funding autocracies. Right. So it's not even e m X China. It's e m X dictatorships. You're just not participating in the worst It's very different from e m X China. So X China just access China out out of a market cap weighted index. It's not anything else. It's just there is It's just an arbitrary exclusion, and I think that's a band aid on a much deeper problem, and it doesn't address the root issue, which is the lack of freedom is the problem in China, not China itself.

So so you hinted at something with Hong Kong, and I'm curious if you pay attention or track this in any way. You mentioned the exodus of millionaires from Hong Kong. I wonder what sort of brain drain takes place in places like Hong Kong or China or Russia when the country just takes a really bad turn in the wrong direction and people finally say all right, no, Moss, I'm out. Yeah, I mean I think that's a that's a pretty high level of brain drain. I think without capital controls it

would be even higher. So these countries have those capital controls for a reason. And how do you get capital out of um countries like China or Hong Kong other than buying condos in Vancouver? Very difficult? Yeah, I mean, I don't know. I always always amazed anytime I visited Vancouver about the sea through apartment buildings, which was apartments owned people in China, and it was sort of their safety nets and other countries not just you noticed all

the autocrats they send their children to school in the country. Yeah, absolutely, What why is that they're not confident in their own education systems? Yeah, I mean, I don't know. So you wrote something I thought was kind of interesting, uh, and I want to get some feedback on it. Bricks are a good example of a nonsensical e M grouping made up by Wall Street, now used by autocracies as a

dog whistle for forming alliances against the free world. Explain that. Yeah, so that was prompted by a tweet um that I saw that said Iran now wants to join the bricks Right, so bricks was coined by an economist at Goldman Sachs Um like two thousand one or something longer before that, right, Okay, Brazil, Russia, India, China, South Africa. I was added laterally, Yeah, but but you know, mostly Brazil, Russia, India, China, and UM. So they coined

that phrase, you know, grouping these countries. But there's nothing in common among these countries except they're all emerging markets, so they're all coming from a low base. So it really made no sense except that it made an acronym. And Wall Street, I think sometimes doesn't realize or consciously denies its own powers. And you know, we created that acronym. And then these countries started something called the Bricks Summit, right, So now they're a summit, so kind of a competition

to the G seven and so forth. And now Iran wants to join. So Sas is the guy who who coined that. Okay, I'm not trying to call him out or anything. I'm just saying in in on Wall Street, we sometimes deny our own power and we create these things meaninglessly just to sell product. And then the acronym gets hijacked by autocrats to create alliances against the free world.

And so sometimes and that's a good example kind of a visualization of what happens when we invest in these on free markets as well, we lower the cost of capital for these companies in these markets to do business. There is a cost to doing business in a way that puts state interests first. Every company in China has to do that. I'm using China as an example, but the same thing in Russia, Saudi Arabia, Egypt. I mean, you see exppropriation in all these countries, UM, and the

state interests always come first. So that comes before your shareholders, before yourselves, before your customers, UM. And there's a cost of doing business that way, and we are subsidizing that cost by investing in these places, in these in these companies. And also these companies typically have very poor accounting standards,

very poor transparency. We don't know who the actual owners are, and so you could directly be enriching autocrats and their cronies because we don't know the ownership of a lot of these As long as the regulators are getting there a little payoff on the side, what do they care if the accounting is right as long as their numbers. And we have ourselves to blame for that. It's our regulators that allowed this, our lawyers who wanted to make money from this, our investment bankers, and our you know,

Wall Street us. So we have a lot to be responsible for here. And I think sometimes Wall Street, you know, carelessly makes these things up like bricks. Okay, what is that? You know? It doesn't make any sense. And I think you know now now people are realizing that, and it's pretty much dead as a grouping an emerging markets investing at least, But now we still have the Brick Summit and Eyrong wants to join. So there's a lasting consequence

to our actions. When you're in a position to direct assets, whether it's your own assets or someone else's assets, that is a position of power and privilege, and we could use that power for good or not. And in emerging markets there is no neutral huh. Really really interesting. I recall re not too long ago, and it actually might have been on Twitter that the A A share investors, meaning the local investors in China get treated very different

than the B share investors. And if you were a B share investor in China since nine you haven't done that well, whereas the A share investors did pretty good. Yeah. So the n c h I Index, which is the MSCI China Index, tracks both on shore and offshore shares, a very complete picture of investing in China. UM since its inception in it has had lower than treasury like returns, so lower than for the B share the outside, for

both on shore and off shore. Really yeah, together, So for thirty years of the biggest growth spirit of any country on a on an extended basis, and it didn't be treasuries. Correct, it's abysmal. And and now why is that? Is that because so much skim was taken off the top. There's a lot of dilusion, there's expropriation, there's expropriation that so expropriation I define that as UM basically nice business you got there, Shame something happened to it. Yeah, so

so government. You know, for example, in Egypt, there was the largest dairy company. The government wanted to take it over. The founder said no, He was put in prison. His son said no, was also put in prison with him. So this happens in all these unfree markets, not just China. Um, I know, I pick on China alot or seem to because they're just such a great example there exhibit A for all of this stuff right now. So so yeah, that you know that happens in all of these countries,

and China specifically. You see this major drag on emerging markets indexes as a whole because they have such a large allocation, and so emerging markets as a whole hasn't done that well in the last decade or more so. So that leads to the opposite question. If invest sing in these autocracies and on free countries help some of the worst leaders in the world, what is the positive for investing in the freer countries that respect economic freedom

and individual liberty? Yeah, so so freer countries have a lot of benefits that are beyond even economic benefits. They have higher life expectancies, they have lower infor mortality, they have lower gender inequality or higher gender equality. They have higher GDP growth, higher income per capita, lower poverty rates, even their poorest quarter of their incomes are much wealthier in the top quartile freest countries than the bottom quartile of you know, the least free countries. So the bottom.

The poorest people in the freer countries are much better off just by being in a freer country. Um. So, so all of these benefits of freedom are kind of nebulous. They're hard to visualize. And when we try to do with the f R d M Index is to be a scorecard of running a scorecard for freedom in the emerging markets, because yeah, there are a lot of benefits investment wise. They these are the countries that have more

sustainable growth, recover faster from draw downs. We saw this in a sustainable growth, meaning you know there, it's not government mandated debt driven growth, kind of like you saw in China again Exhibit A. You know, ever, grand we didn't know there was a problem until it was too late, and that's you know, one of the problems with this kind of growth is that lack of transparency UM, the debt driven nature of it UM and it just causes

this problems that become too big to fix. So since you launched the Freedom Index, have you been back to China? I have not for Hong Kong, for not even Hong Kong, and I love Hong Kong so much and I wish I could go back, but because of the National security law. It's best that I don't you actually are concerned that if you show up as the founder of this index in Hong Kong or China, you could be arrested. Uh don't want to. I don't want to test that fair enough.

So then let me ask you a subtler question. Do you ever get pushed back from countries that are left out of the indext you hear from different players? Yes, I do, and and that's always interesting because, um then I had to get used to that because you know, working at Fidelity a very conservative corporate culture. But yes, we never really had anything to be criticized about. And if you didn't like something I you know, suggested, you know, you blamed your in tim or whoever I was getting

my research from, right. Um so, so that, by the way, has a great Twitter feed, he really does. It's really the most interesting of all the Fidelity I have to say. But anyway, pushback, who who's pushed back on you? So it's interesting because I've heard pushback from multiple countries, but the pushback is different depending on the country it's coming from. I've noticed that from Chinese investors in Hong Kong, I get very virulent pushback, like very angry and um, hey

you know you don't. You don't. The data set you work off of comes from Fraser and yeah, exactly numbers get from them. I'm not even massaging the numbers. I'm literally just putting the numbers as inputs into my algorithm. Yeah, and my algorithm is coming out with the inclusions. And so from China, I get a lot of pushback in a less civil way, but you know, there's there's still some of them make good points, and I've taken some of that to to heart and and change parts of

our index. One of the things that I really valued from that feedback in the very beginning is that somebody pointed out, hey, you have a South African company, Naspers, which is all of the their entire market cap consists of ten cent and so you're essentially that's interesting. This is a quantitative strategy if the company is based in South Africa, and South Africa's included, but it's really a Chinese.

So we actually, at the rebalance of that following year made a rule that if more than of your assets are made up of the shares of another company, then in that company is in an excluded country, then you're out, and so so they really, you know, regardless of who the messenger is, the message was helpful. And but what I found is that in the more free or the you know, borderline countries that sometimes get included, sometimes don't.

I was in New York a few years ago when Brazil was not included in the fund, and I was in a subway and I ran into a couple of Brazilian UM human rights lawyers and so we were all waiting for the same like late train and UM. And I found out they worked in human rights and I was there for a human rights event, and so we started talking and they were like, hey, it's Brazil and your index. And I was like no, and they were like, yeah,

that sounds about right. So I think countries, you know, different people from different countries tend to react differently to not being included. UM, India, right, I have a lot of Indian Um, we have a lot of Indian fans actually, because you know, India tends to have a lot of fights with China, so so they like that we don't have China, but we also now don't have India. And because India a couple of years ago, UM, increased their

repression of the cashmere people. They had increased um incidences of government intervention in media, and they blacked out protests in places that had um or blacked out the internet in places that we're going to have protests, the farmers protests. And so because of that, their score dropped, and because their score dropped, they became excluded, and uh, they dropped lower than Brazil, and Brazil got bumped up. So it's all relative, right, So um, after that happened, I didn't

hear much. But when I do, you know, personal speaking in person, um, I do hear from Indian you know, audience members. I say, hey, India should really be in there, you know, and they give me all these reasons, and I'm like, I completely agree with you. I love India, you know. Unfortunately my subjective opinion does matter at all, doesn't factor in at all. But you know, is a borderline country and it could make it back in it

any time. You know. For a long time, it looked like Brazil was really going to be a very modern, democratic, industrialized nation. But like so many other countries in South America, they seem to have you know, faltered, stumbled a little bit of all the countries that are right in that borderline zone, what do you think are the ones most likely to end up back in the index over the next couple of years. I do think India is very

likely to make it back in there. They have some issues, UM, but I think they have enough diversity of viewpoints to kind of push back and push through UM, I hope. And they have very favorable or more favorable demographics since some other countries, UM, so I think they they can possibly make it back in. I think Malaysia is currently in and it's one of those I think we'll stay

in there making some you know, reform progress. Colombia is an interesting one that I thought was gonna become more like more likely to come in, but now they're having some issues. UM. And the reason I like to Columbia is because they were benefiting from the human migration from Venezuela.

And I like these countries that are in places where, um, there next to a very unfree market and they're like the beacon of freedom in their region, you know, like Taiwan or um, Columbia or in this you know right now, Poland. Where does Mexico fit into the It's low but it's included. Yeah, so so yeah, I know these are the interesting countries. And what I find even more interesting that we don't currently you know, have a product for is frontier markets.

There's some very free frontier markets still. Yeah, it's like freer than the US on the rankings, much higher. It's like a number five US is like number fifteen, so and that's a that was four last week. Yeah, and and they would be they would be very offended to be called a frontier market. But I'm just talking about size and give me some frontier. Who else Uruguay which is actually not even classified as frontier I believe by

ms C. It's not not even classified. Um it's it's you know, got some very interesting fintech companies and just it's ranked very free. So how about any countries in Africa that are on the border. You know what, I don't know of any off hand in Africa that are on the border Nigeria. I was about to say, Yer and Nigeria. Where are they in your in your rankings? So Nigeria actually is six point to eight out of ten um, which is higher than you know, Russia, Cutter UAE,

which are emerging markets. But it's not higher than you know, India and so forth. So so yeah, it's still not free enough. If we were to make a frontier market index, it still would not be free enough to be in there. So here's the question. Are there enough large liquid companies in all the frontier markets to create an index? Right now? We think the answer to that is no, but eventually it might be yeah. And there's other ways of solving

that problem possibly. Um So, if any listeners are market makers, or if you want to help us make a market and some of these names, please get in touch, because we would love to solve this problem and make something like an e t F that's available for all investors. Obviously, we can make a you know, hedge fund or something, but I would much prefer to have an ETS structure. So so, so, last question before I get to my favorite questions. You mentioned you miss Hong Kong a lot.

What do you miss most about Hong Kong? Okay, So, Hong Kong was like New York on speed Times one. New York on steroids is how everybody describes Hong Kong's Really Yeah, New York just like New York Times ten, just massive. Yeah, I loved that about it's just the speed and the size, the number, the sheer number of people, the stability of um, everything you can do there them,

the respect for commerce, the efficiency. UM. It was just such an exciting place that the lights, I mean, the if you look at the city at night, it's beautiful. It's got world class you know everything and Hong Kong. So that's a very difficult question because there's a lot of good food Hunko. It's like New York. There was a you know, I don't even remember all the names. There was a Tapa's place in mid Levels, which I loved. There was a Indian place with the most incredible non

m on the Peak that I loved. But I think if I had to pick one, I'm I really miss going to this place called trey Wah and it was it's basically like a ihop, like it's an open twenty four hours and it's the one we went to was in Central which I think it's actually closed now due to COVID. But um, that's where you go at night if you stayed up too late with your friends and stayed out and you just want to go and eat.

I just had the best memories there. I just remember you know, hanging out with friends there, you know, in early morning hours. I'm a night person, having the best time. And so that's actually what I missed the most, which is which is like the cheapest like restaurant you could think of there, but it's it's where I had the best memories. So in New York that would be Woe Hops down in Chinatown that was four hours a day.

I remember in college, mean, Buddy's piling its three in the morning and it was I think they're still around and still open twenty four hours a day. It's just it's just not I don't even remember the food. I think the food was like secondary. It was like some weird toast um, you know, and tea or something. But but yeah, no, it was it was the best memories, all right. So let's jump to our favorite questions that we ask all of our guests, starting with what have

you been streaming during lockdown? Tell us what's been keeping I saw Hobbs and Shawl the other day and I was like, I have missed so many Fast and Furious movies, and so I started from the beginning and now I'm on I just I just finished six and so because I stopped going to those movies after college, and the last one I saw was Tokyo Drift, and I have no memory of you know, pre like two thousand four, so I basically had to watch them all over again. Were you a drift girl? Will you out in two

x is? Going sideways around tracks? You know? That's you know I didn't. Actually that's d because I know people who still to this day do that. No, I did not. I was not part of that. It's a funny run of films because it's about this tiny little subculture and they blow it up as if it's like the only thing that really matters. But what I love about that is some of these quotes that they have, and I

love like badass women characters. So like Letty in the Latest One said something like you know that after she lost her memory, and she was like, you know what, I may not remember much, but I know one thing. No one would have ever made me. And he made me do anything I didn't want to do because somebody else was blaming themselves for the trouble that she got into. And she was like, no, I wouldn't have done that

if I didn't want to do it. And so I love that and I love how UM in Tokyo drift Han was like, I have money, I need trust and character around me. It's like all of these little quotes that it was just the sense of loyalty, and I just I just love the brotherhood about the movie. But the philosophy of fast and furious. Who knew that was UM? Second question, tell us about your mentors who helped to

shape your career. I mean, you hear the quote that, UM, if you're the smartest person in the room, you're in the wrong room, right, And I can I can say in this business, I have never been in the wrong room. In fact, I'm usually in the most right room possible. So I think it be harder to answer that question as who who's not been a mentor at this point because I have so many mentors. I mean, how many times have I called you and asked questions? Right? What

should I do about this? UM? All my you know E T F brethren who have their own products, right, I talked to them, I asked them questions all the time. UM West is a current mentor early on UM, you know, looking at people like Rob who pioneered non cap weighted indexing UM or not and you know before that when I was a fidelity, my fellow advisors and my clients, right, so my clients, I learned so much from them. I usually now don't get to meet with end clients very much.

I usually talked to only advisors. You asked earlier who most of our investors are, and I didn't fully answer that it's advisors. And um, you know I recently got to meet face to face family office and that was a fascinating experience. And just these people were so um kind and generous with their time and um, you know, learning about the strategy and you know, um and you know, sharing with me about their family and and you know, I get my inspiration from these people. These are the

people that we created the strategy for. And um, you know, these are the people that whose feedback I listened to, right, people who tell me this is what we want to see next? Or um, when advisors tell me, oh my gosh, you should hear. How are you know our clients respond when we the joy and the relief from our clients when we tell them how we invested for them after the Russia invasion, that we had them in this freedom weighted product. Um, those types of comments are or why

I'm in this and and they inspire me. M really interesting. Let's talk about books. What are some of your favorites and what are you reading right now? So right now I'm actually reading, um, the book about Bogel. The book. Um, it's about three quarters of the way through that. How you enjoying it? I'm enjoying it very much. I'm probably on chapter three. Um. I was. I was aghast reading it, and I'm reading this quote and I'm nodding my head in agreement with it. And then I realized, oh, I know,

I am in agreement with that because it's you. It was it was pretty like, oh my god, talk about confirmation bias was embarrassing. No, I love how he puts so many of our friends in there, and just like so many quotes. Um, it's like reading a book with all of your friends quotes in there. So I love that. Um, it's so good so far. And he and he said, you know you should read this book because you know you will be inspired by how Jack Bogel also went against the grain and so um, so I love it

so far. UM. The other book that you know, I'm a big fan of Bill Browder and what he's doing also Red Notice, and you've read Red Notice. What's the I read the first one, what's the second notice? Second one? Freezing Order? All right, I just got that. I haven't read it yet. That's my next one. Yeah you so, um so that's that's gonna be exciting. I think, Um, I heard that has a happy ending and I love happy endings, and you don't. You don't think of these

stories as ones that would have happy endings. But I'm looking forward to seeing what that is. Red Notice is astonishing. I mean, you read it and like, if that was fiction, it wouldn't be believable, right, Like it has to be nonfiction because if it was a novel, you would say, this is the most ridiculous thing I've ever read. But when you know what it actually happened, you're like, holy,

it's really astonishing. So you mentioned Eric Beltunist. We have him coming on the show in a few months, and um Bill Browder coming on the show, and really, yeah, so we've we have that's amazing. We have both of your books tied up for uh. For I love having authors over the summer. It's a perfect time. It gives me an opportunity to sit on the beach, read a book, and I have I get to pretend I'm working. What'd you do? I worked all day Sunday? Really, what you do?

I I sat on the beach and read Vogel Effects and and that's my aska asked Bill Browder, how he um thinks about emerging markets investing? And he doesn't he tell you he doesn't do it because of the lack of rule of law. Yeah, that makes perfect sense to me. Um, So I obviously disagree with that. You should still do it, because there are some very free markets in emerging markets, but I agree with his reasoning. So so. My wife's brother used to be general counsel of Amaco, like twenty

years ago, that little Amaco BP deal. That was his thing. And he was never a fan of investing in Russia because he always described them. Um. He always described them as a criminal enterprise with a standing army attached to it. And that was twenty five years ago. And he turned out to be very very right. He said, every time he ever went to Russia to do any sort of contract ordeal, the terms always changed. Even if you had a sign agreement, it didn't matter. There was no respect

for contracts. Forget private property, your individual rights, just whatever they could get away with, they could get away with, and not a surprise, A didn't make it onto your list. Know that rule of law is so important. And Russia is one of those countries. I had a client when I was a fidelity, a Russian client who told me I don't want to invest in Russia because it's like funding terrorism. And you see how prescient that was now. But Russia is one of those countries that has both

poor personal freedom and poor economic freedom. So you know, personal freedom I categorized into civil and political freedom. Civil freedoms are things like terrorism, trafficking, torture, disappearances, UM. Women's freedoms there's five women's freedom's proxies and then UM in and these are emerging markets. Women's freedoms like women's rights to movement, women's rights to children after divorce, women's rights

to inheritance, things like that UM. And then you have your political freedoms like do process, role of law, UM, civil sure, criminal procedure. And then you have you know, freedom of speech, media expression, and so forth. And then you have your economic freedoms that were all familiar with UH, freedom to trade internationally, sound money right, free to fear countries actually have more sound monetary policies and lower inflation

rates historically looking at inflation as a major risk going forward. Um, business regulations, taxation, um, government interference and private markets and so forth. So Russia is one of those countries that rules, you know, ranks poorly on and economy. Yeah, so um those you know, China is another similar situation. So yeah, that's the country that we were never had in the index.

All right, And our final two questions, what sort of advice would you give to a recent college grad who was interested in a career in either ETFs, investing or

emerging markets. Yeah, so I think a lot of college grads um these days try to go into quant and I think quant does have its place, But I think right now, for for new grads, I would say, look at you know, look around you, and you know, just look at what's happening in the world and invests according to that, right, Um, And sometimes that can work just as well, um, But for everyone, I would say, one, start at a big firm like Fidelity or you know, a company like Bloomberg where you can learn a lot

um and they have the resources to train you. Because We've had a lot of college grads come to us and say, can we work for you? And you know, my answer that I do not have the resources to train someone just straight out of college UM as a startup right, So UM, I would much rather hire them after they've got that training. And you know, don't stay forever. Do what you're passionate about. But you know, get the basic training down and these are such great training grounds,

and yeah, maybe you'll stay for a long time. I stayed for ten years, Fidel and I loved it, UM and that was a tremendous building, you know, blog and foundation for what I do now. UM. And the second thing I would say is once you do branch out, UM, if you're lucky enough to have a vision or a mission or something that you're passionate about, you know, UM, go for it and try to fail as big as possible. Phil fail early and young recover, yes, And so when

you're young, you know, do do what you want. Go for it, and don't ask yourself what is the most stable career path. I think a lot of people ask that these days, but UM, but ask yourself, what is my ideal scenario? What do I want? Ideally? If I could have anything, do anything I want. What would I do? And then go that direction because you may fail, but you know you'll be happy. That's the one thing I

learned from Yen v Neck of Van Neck Funds. Actually early on I heard him speak and and somebody asked him, I have an idea for an ET, I should I launch it? And He's like, yeah, yeah, sure, you know you make you might fail, but you'll be happy and that I can tested that. So and you know, one of the things that's fascinating about both Silicon Valley and the United States compared with more traditional countries is failure isn't a red mark in the US the way it

is elsewhere. Oh he launched the company and failed, how terrible. Here. You know, vcs and entrepreneurs list their failures. It's almost a badge of an honor. I mean, I know that that that's a given for folks like us, but a lot of people don't understand how significant that is. Yeah. I mean, if you're not failing, you're not trying enough, so you're not reaching out of your comfort zone, you're

not taking rich whole self out there. Yeah. Absolutely. And our final question, what do you know about the world of investing today. You wish you knew twenty years or so ago when you were first getting started. Yeah, So when I was first getting started, like twenty years ago. It was twenty years ago, actually, I think it is when I went to art school in Pasadena to go into advertising design. So I was wanting to go into

a creative field. And what I didn't realize that that time is that finance can be very creative and for me, indexing is a form of expression. We created this for people who believe in the benefits of freedom and want to express that in their emerging markets allocations. Before there wasn't any way for people to express that if that's what they wanted, and now there is. So we're creating an avenue for people to express their preferences in the

emerging market space. Um. And that that's a that's a creative thing, you know, using data that's not readily available on Bloomberg or fact set insteady using freedom as a metric. Um. It was a creative kind of outlet for me. And so this is uh, something I didn't know before that finance and you know, indexing specifically could be a creative exercise. Really quite fascinating. Thank you, Perth for being so generous with your time. We have been speaking with Perth Toll.

She is the founder of the Free Itom E t F and Liberty and Freedom Indexes. If you enjoy this conversation, well please check any of the previous four hundred such discussions that we've done over the past eight years. You can find those at iTunes or Spotify or wherever you find your favorite podcasts. We love your comments, feedback and suggestions right to us at m IB podcast at Bloomberg dot net. Sign up from my daily reads at Rid Halts dot com. Follow me on Twitter at Rid Halts.

I would be remiss if I did not thank the Cracks staff who helps us put these conversations together each week. Justin Miller is my engineer, Paris Wald is my producer. Sean Russo is my head of research. Attica val Bron is our project manager. I'm Barry Rishults. You've been listening to Masters in Business on Bloomberg Radio.