ETFs That Let You Invest in the Future

Bloomberg Audio Studios, Podcasts, radio News. Welcome to Shrillians. I'm Joel Webber and I'm Eric Belchunis.

Eric.

You know what we're going to talk about today is the future. How is it to invest in the future with ETFs?

Yeah, I mean, look, I immediately think of ARC.

I think Kathy Wood in ARC really kind of put this trade on the map of like trying to capture trends that are five years from now. But I mean, to her credit, even though the ETF has gone up and down a lot, you know, robotaxis are actually happening. You see clips of this. Surgeries that are remote are happening. I've seen clips of this. So some of the stuff that was discussed five years ago by her is sort

Get them to give it up.

But they also don't want to miss out on some of the stuff that might be happening early and then speculative and tech oriented, and especially in the US, you know, we are innovating all the time and people want to capture that as best they can, and there's a void to fill for investors, and that I think is where thematic ETFs really deliver a lot of those sort of up and coming themes, sometimes even before you've even heard of the theme or the theme is even ripe.

So we're going to talk about a certain story today. The headline was Wall Street pitches sci fi ETFs for robots, UFOs and quantum bets. That's by Bil Donna Hirich, cross asset reporter with Bloomberg News. We will be joining us on this episode, this time on Trillions Capturing the Future with ETFs. Pil Donna, Welcome back to Trillions.

Thanks so much for having this.

So as we told you, when you put robots, UFOs and quantum meaning quantum computer into a headline, that's like the trifecta and you immediately like, we have an automated email that goes out and invites you on trillion. So

A way to think about it is that issuers etf fishers are starting to think about like the post ARC world, like the post AI world, and they're thinking about these themes like UFOs, like they're actually is a filing.

For UFO to stick with the AI think because AI was sort of like a super concentrated bet and there's like forty products or something on the market.

I think there's more than slightly more than forty, and not all of them are attracting cash. Not all of them are doing you know, up performing their benchmarks are outperforming the SMP even so it's sort of like a struggle there to attract attention and assets.

But it's like move on already sold space literally so or not even outer space, like humanoids is one of the ones that you talk about, what's this? What's that? Look like?

Humanoids is so fun? I think. So when we're talking about humanoids, we're talking about robots that Elon Musks is hoping to put in your home to help you with your chores.

Is Tesla Optimus.

Robot I think he even said at one point that the robots will be expected to babysit, which.

Well, you have you're a kid, like not even two years ago, would you leave a kid? Not a chance, Eric. Would you let a humanoid do some babysitting?

Not yet? I mean it would take time for me to come around that.

Would you let it watch your parents? It depends how what shape my parents were in. But I will say I saw this movie after Yang with Colin Ferrell, which really is I think a glimpse into living with a humanoid. It's basically like what thirty years from now, and the younger sister of the robot actually develops an emotional bond and it's a whole thing.

It's a great movie.

To me.

It feels like the closest that we're gonna get to what will exist in that front. But it will take twenty thirty years. I think my kids will be the first to really adopt and you know, trust a robot walking around the house and stuff.

I mean, it's just getting out there. Yeah, real quick.

Though on the humanoid one part of this though, you said like AI and robotics, like it's still a hot theme.

I mean there's like, I don't know.

I think it might be the first or second biggest theme out there at this point, but there are like well over a dozen now, and so now it's like, Okay, if you put robotics in AI out now, you're probably dead. I mean unless you get lucky with performance. So humanoid to me is sort of like, Okay, let's take the AI robotics and actually like make it more narrow and

Okay, So the humanoid products, because there's now two ETFs, what are they and how are they investing?

There's one from Crane Shares and one from round Hill, and they're investing it. They have slightly different investment thesis. But the Crane Chairs one, for example, has like three different things that it's looking for, like the brain for example. Of the actual humanoids, like who's building those components and the companies behind the robotics revolution. I guess we can try to call it. I think it's there's a slight

So the Crane Shares when you mentioned the ticker is Coyd ko i D that came out in early June. There's some companies that I've kind of never heard of, jab El Inc, Linus, Rare Earths Limited, Amphenol Corp, Malexis. And then you've got the navideos and the Tesla's in the world, Like so many of these things are like, you know, they're really trying to identify what a supply chain for this stuff looks like, how do you get

Taking round Hills is, Well, they're both actively managed. So the roundhoer one is is focused solely on companies designing and building humanoids. It's actively managed. It just launched, so we'll see how those end up performing. I think actually there's very little overlap between some of these companies and some already existing robotics and other AI ETFs, which I

It's worth mentioning that some China humanoids are already in effect, and like the YouTube videos are insane for those Eric, what do you how many humanoid ETFs can the market sustain?

Well, we got to see how popular these are. Probably if I had to ballpark it three.

But that's assuming. Yeah.

I mean, one thing about the two ETFs that have launched, Coid and human is that you got to look at the holdings. You opened up Koid Jol and you said, I don't recognize any of these names.

I'm just the Yeah.

I love that reaction when I open a theme ETF. To me, that's what I want to see. I don't want to recognize the names, and KOID looks like it's mostly equal weighted, so you take all the names. That's why, like Navidia is like just in there with all these other names you never heard of.

It's like a face in the crowd.

The reason that's good, in my opinion, for these themes is that you want bigger bets on the smaller pure plays because they tend to get bought by the Navidias of the world, and you get a ton of money on that acquisition, a ton of return. So COID to me would be more probably more volatile, but you get more m and a pop potentially and then human If you look at the holdings, it's Tesla and Navidia top

But I do like that there's two choices.

One's a little more market cap weighted and you know, popular seeming, and the other one's a little more far out there with equal weighting, and then people can decide what's better best for them.

Okay, we've talked about the humanoid space. What other spaces do we want to talk about? With Loldana.

Quantum is definitely a hot one. There's a pretty big quantum etfqtum. So far this year it's already gathered more than six hundred million in inflows. So it's definitely something that I think people are just awakening too much, much more because the ETF has been around for a couple of years already, but so far this year it's already on pace for a record year of inflows.

Eric, how does that stack up for sort of a cutting edge ETF that's you know, a pure thematic play.

It's great.

I mean, Quantum the ETF is a total hit. It's the Defiance's number one best selling ETF. And you know what's interesting about quantum the ETF also is it is also equal weight. It might not be totally sometimes they do just thing called modified equal weight.

But either way, it's.

More like KOID in that you're getting a lot of more exposure to some of the more smaller peer plays, and it's got looks like one point five billion. There's a couple other ones on the market and they don't really have much, so the one et from Defiance is just basically like raked in the lion's share of assets here.

Stocks and their hits.

So there's the quantum theme, but there's also a huge interest in really gambling on these juggernaut small quantum stocks. One of them went up one hundred percent in one day, so the stock went up fifty percent, the ETF went up one hundred and that's the most pop and ETF has ever had in a day.

So there wow.

And they're they're they're volatile, but that's part of that. That's a feature, not a bug for the degend crowd that trades these. I think the quantum theme would be for a more like normalized long term play because you're diversifying, you're actually taking volatively off the table. So again with ETFs, there's something for buddy, as.

Long as you're talking about super future stuff because quantum is like, I mean, super speculative, like it's out there. Maybe sometimes what the real world applications look like big time tbd Uh. Can we talk about UFOs because I love cheesse that it's like, you got to come back to it.

I know, I love this.

So what's going on with UFOs?

Matt Tuttle filed for of Tuttle Capital Management filed for UFO based ETF.

So it's UFOD yes.

And it's pure conjecture at this point, just to be very clear. But the idea is that there is potentially some sort of alien tech that maybe revealed in filings in you know, if the government releases records that type of thing, where you might discover that there's something tied to aliens there with R and D companies for example, or defense contractors or those types of companies. And so this tf would purportedly invest in those types of firms.

I think Eric exhaled right when we pitched this. You want to go ahead and take the micro in talk about it.

Did I get it right?

Eric?

Well, it's there's actually even more of an level here. It's that the new administration is going to open up the Area fifty one. Right, They're going to be real liberal about letting all of this into the public domain,

Have you read this filing? Have you read this via?

I read it?

I talked to Tuttle too before you laugh, and like, you know, change the channel or whatever. Tuttle just hit a home run with the europe Defense ETF. Remember this is on our episode last time, which is it has a billion dollars. He was the only one who foresaw this.

Now.

I'm not saying this saw the same thing, but Tuttle definitely is one of the probably the most experimental issueer out there.

But sometimes it works.

And again, if it does work, it works big because he's had the market to himself for months now too. In Europe, they've got like a dozen of European defense here's just one still and he has all the market.

Okay, what happens if this doesn't work out?

Nothing, he'll just we just close it and we're never going.

To talk about it again. Okay, it hasn't launched yet, so Eric, what has to happen for this to launch?

Well, you know, the SEC may give him a little pushback on the name and whether it's appropriate.

Member.

Every now and then, the SEC has issues with names. They didn't want blockchain in the name when the blockchain technology was early, so people had to make up different names. They didn't want cannabis and marijuana in names, so they had to work around that. And also, by the way, Tuttle just filed for a government grift ETF, which is a which is one that's trying to make money off of like insider trading in Congress, and so that is another one.

Will they let that name through?

Considering the SEC is part of the government anyway, Tuttle is always pushing the bounds. I'm sure when his filings come through, it's like a whole thing inside the SEC.

I'm sure, but oh, here's this guy again.

Legally, I think as long as the ETF does what it says is going to do, they have to let it out.

And does it say anything about the kind of holdings that would aspire to have.

I think it's defense contractors R and D was mentioned definitely in the filing. I just love the idea of US finding about finding out about alien tech.

We might talk about this one again, We'll see, I really hope. Okay, so is the perfect segue into thematic doesn't always work out, right, Like, let's talk about the metaverse, that whole thing that Mark Zuckerberg get Facebook then meta try to basically own and there were there were meta ETFs, and those we don't talk about anymore, right, so what's the risk of really speculative, niche thematic ETFs.

I think we're the first people to utter the words metaverse in like three years, which just goes to show how much that fizzled out. Like I remember a couple of years ago when when Facebook changed its name and everybody it's all about the metaverse. But it was highly speculative and you really needed people's buy in, and it just didn't happen, and metaverse tied ETFs ended up closing, So that fizzled pretty quickly. Nobody talks about it, and nobody mentioned amazing.

How quickly meta just pivoted to aire right too. Sorry.

I will say that the metaverse ETF is outperforming the S and P since launching, so it has been a pretty good but it's kind of accidental. I mean, Apple's the second biggest holding. It has Ethereum and Solana in it, so it's got a crypto kick. Meta has had a good run. I mean it's a lot of mag seven plus Crypto, so and which has done pane AI. Sometimes a theme goes up even if the theme sucks, which tells you again, let's go back to the human ETF.

You call it.

It's gonna move like the Mag seven And so this to me is like kind of lucky. But by the way, we had I think, do we have round hill on or we just were speculating that they used to have the ticker meta and they sold it to Mark Zuckerberg and they for an amount that was undisclosed. So it doesn't even matter if this ctf's a hit. They totally got paid already. But I agree with you, the metaverse just went away. Man, it's crazy almost like ESG, not as bad, but close.

Yeah, what other thematic plays are on either of your radars?

There's mega trends, which Lazard is taking advantage of. They launched a couple of ETFs in April. THMZ is one of them. It's a mega trends ETF. So again, think about like the way that they described it to me is it's not stuff that's on page one of the newspapers, stuff that's like on page thirty two, section C for example, that's slowly making its way to the front. So again you're getting in on the ground level, you're getting in early. That type of thing.

The stuff you haven't heard of, Yeah, exactly yet. Is that just trying to capture everything across sort of this kind of thematic universe.

No, they also break it down into a couple of different themes that they like, like software, apps and agents, data and AI that type of thing. Future Health is one of them. But THCHMZ is up twenty percent since it's launched, so over the past two months, up twenty percent, not bad, Eric, any on your radar.

One that I'm actually we're looking at because it was part of the May launches was the third Joal Monopoly ETF, which basically invest in companies that like have somewhat of a monopoly on their industry, sort of like the wide mode ETF.

It's not that novel, but I just.

You know, there is the first monopoly ETF has fifty million, the second one has nothing, and so here comes a third one. And so this is where this becomes tough, and the third one has a higher cost. I mean, unless you have an extreme breakout, it can be tough. So I think with thematic ETF, you do have to be in it to win it. So you want to try,

But we're say it's a little too dark.

I think I think there's an upcoming episode that we can call good luck with that.

And with good luck with that, it should be it should be a recurring episode. But so that's one where I just caught my attention, which is how big the rush is.

But here's the thing.

If you look at all of the launches coming out, the part of the problem is, like the regular stuff Vanilla has been had, the vanilla space is over, like Vanguard black Rock dominated. Even if you had success, there have to be charging zero fees anyway. So part of what's happening is if you're in the asset management space and you're trying to get some organic flows, you kind of have to try in a couple different areas. You know,

Out before they're ripe.

I would argue the humanoid theme might not be totally ripe enough. I mean, it's really far out there, but they're going to try, and as the more pure plays come in, the etf will become more pureish. But they may put beta filler in there at first just to try to get out early.

And I had that first movie and advantage and kind of like totally plant the flag. Okay, one more thematic, Eric, what do you got?

Yeah?

So remember it must have been four years ago, right around COVID early COVID.

Yeah, it's like pandemic came back. Yeah.

I came back from the inside ETF's conference, which is now called Exchange, and I was in a new analyst pitch competition or new ETF pitch competition between analysts, and I pitched uranium.

It.

Honestly, it had like ten million.

Dollars in assets this how early I was Joel and one new one launched and I said, there's something going on here. I think uranium could be good for green energy. They now have close to ten billion in assets. So within four years this theme that was like in oblivion for you years and years. Uh, just the world turned and uranium is part of nuclear has become more and

You're like Tarpin tarpin On, we got a big one.

I will say.

R A was around for about eight years before this. Then you are in. You aren m listed. That's what caught my attention, and that one now has one point seven billion. But r A was around for like ten years and nobody cared.

It sucked. It was down, and I give it credit. It could have closed. Sometimes we see ets close right before their number comes up.

Yeah, we talked about that.

But it hung in there and now it's three point eight billion, So sometimes you could be ten years early.

Joel ten just rope a dope.

Eric just wanted us to know that he had.

Yeah, it was really good because you know what, you know, it's a sin.

I came in like third or fourth place and mind crushed everyone in terms of flows and popularity and just being ahead of there.

And none of them are here to defend any of their but you know.

Their pigs were probably like.

And at the Academy wards and you look and you're like, I can't believe so and so didn't win the Oscar for that role giving himself on Oscar.

Now, all right, on that note, we're gonna leave it.

He missed out, but he's still bitter.

But really everybody knows I deserve this. Bil Donna, keep up the great work and we look forward to more of your headlines. Thanks for having me, Thanks for listening to trillions until next time. You can find us on the Bloomberg terminal, Bloomberg dot com, Apple Podcasts, Spotify, or wherever else you like to listen. I'd love to hear from you. Hit us up on social I'm at Joe Weber Show, He's at Eric Balchinus. Billions is produced by