Four ETF Nerds Debate 20 Topics

of the day. Yeah, and he really would hardly let anybody finish. He would just go around quickly and he was like sort of a yeah. He was like no, no, no no, no, And and it was fun to watch. It was a spectacle and it was for our A d D minds. This is you know, young gen x or I really liked it. I felt I got a lot out of it. It was slightly entertaining, and you don't see that token Republicans. Everybody's thrown in together, right,

So we're gonna do our own version of it. We are We're joined by a few e t F nerds and we're gonna talk about the E t F topics of the day. Yeah, and yes they're nerds, but they're pundits. So when the McLaughlin group had these political pundits on, these are the E t F equivalent of those pundits. They're just E t F pundits. In fact, when I do conferences, I'll frequently be on a panel called the pundits, and it's with these people. These are also the people

that you know me from being on that competition. We're always coming third or fourth place, which disappoints you, and I'm sorry, but it's these are the pundits that I see in the circuit and who are usually the ones you see quoted, and they're really lively and become friends with them, and it should because we're gonna talk about new regulations and we won't let them blather on and on. I'm gonna I'm gonna sort of you're gonna McLaughlin a little bit here. Yeah, we're gonna keep this quick and

rapid fire and get this. I'm gonna see if from get through twenty questions. This week on Trilliance Nerds, we're gonna launch right into introductions. Let's start off Dave, Dave not Egg, Managing director et F dot Com, Tom tom Lyden, editor of ETF Trends, Todd Todd Rosenblute, Director of et F and Mutual Fund Research at CFR A alright, question number one, Todd, is too much attention paid to the expense ratio? Most definitely, so we've seen a race to

the bottom. But there are products that compete with one another where the exposure is quite different from one another. You have V W O and I E MG hundred basis point difference this year and performance the exact same fee. We've got dividend products that are the same thing. If you're buying market cap weighted products, it may not matter if you're doing anything else. You really got to look under the hood. Dave, it always matters because uh, fees

are important. But I think what Todd was trying to say but stumbled over his own tongue is exposure matters way more than fees, and that's the number one thing that determines your performance. But Tom, isn't there a backlash against paying too much in the past? Then? Is it understandable that people want their investments for absolute dirt. Cheap

price is important? But major market indicators. If you're paying four basis points, great, But as we see thematic factor multi factor, you're gonna pay up a little bit more for it. Compare that to mutual fund expense ratios. It's crazy. Tom's like the smooth jazz station. He is the top of his head. Yeah, he is the smoothest of us. All all right, um, and my two cents, I think plain vanilla, you know, expense ratio should rule. I think when you get to more exotic areas, you should pay

a little bit. People do need to make a living here. Okay. Number two, how will a bear market affect et s? Dave? Uh, it's going to be great for e t f s because it's gonna flush out a lot of overpriced, underperforming, low active share active managers. All that money comes into the et F industry. We've seen it over and over again. We see it when we have a one month downturn.

We see it we have a one year downturn. Tom, Well, we haven't talked about this before, but a lot of money is going to go into mutual funds, money market funds, UH, short term fixed income. The industry is gonna be hurt. Todd, Yeah, I think people don't want to pay much when they're losing money, so that the less that they can pay through through E t F s h through both fixed income and equity products, I think is gonna garner more interest. I agree. Um, Look, the bull market has actually been

way better for active than most people think. Assets have increased in active funds by seven trillion. That's more than all of passive a bear market we've had, not only for flows, but just for their sort of asset growth. How responsible for the epic bull market that we've been in, which also happens to be an insanely boring bull market? How responsible for that are E t F s not? I would say E t f s are a symptom of that, not a cause. Yeah, it's just the rapper.

So if the stocks inside are going up, then the E t F is gonna go up. But there's so much more money that's in active management, either in the mutual fund wrapper or individual stocks then or separate accounts than it is the t F. The TF is riding in the back stew to the car, not driving. Yeah, that's it. They've just been along for the ride. Yeah, I mean, look, one direction has a lot of sales. It's not really an MP three thing. Okay, number slap across the face, Okay, yeah you got you kind of

got taken down there. Um, welcome to the club. Alright, Number three, which E T F provider is most likely to crack the top five? That isn't there? Now? Tom, I'm gonna say, Wisdom Tree. If you look at Wisdom Tree and there, did I take your? You take mine? Yeah? Well, the whole ideas they were built on the currency strategy, and when the dollar is strong, it's really really tough

for them. But when you look at the way John O. Steinberg put the thing together, it's really well positioned that when things start to cool off here in the US and heat up overseas and especially in development countries, it's gonna be huge. So, as simple minds would say, don't you forget about me? Tom obviously listens to this podcast. I love it. Tom. We're gonna have like we should put together a Spotify playlist for this afterwards. Well we

did to give request. Somebody has asked asked us like, can you list the tickers you cover? I've asked that about the TV show too. Um, now, Eric, how about this one? Would you make someone a mix tape of all the songs that come up on this episode. Oh? Absolutely, but I mean honestly, the more like is a is a list of mixed tape of the tickers we cover. I think that's the main goal. Anyway, Todd, we're back to the questions. You have to be ready, dude, I was so JP Morgan. So JP Morgan is crashing the

et F party. They're about to hit the top ten with their Beta builder products being a driver and with active management and with multi factor. I really think they're going to put the resources behind growing in this space. They're not in it just to be on the outside. They're in it to be in the top five. I think the more interesting question is top four, because Charles Schwab is going to kick Investco power Shairs to the curb. On that front, Charles Schwab is rapidly headed towards the

top three player. Right, but they're already five, right, No, I know I'm hijacking your questions, so we haven't talked. First is first trust in the game. See that was my pick. First trust to me is like the quiet baller. No matter what they put out, they come up with a billion dollars they have. Whenever I talk to people on the street, they say, nobody sales people is like

first Trust, So I would go with First Trust. I think JP Morgan Goldman is a good sort of outside and I like all your answers, actually, but I would have to trust is too easy there. Number six right counts you know alright? Number four? Which et F category will see the most innovation in the next five years? Dave, uh, thematic ets. I think that's where you're seeing most of the interesting stuff happen right now. You're going to see more active product there, and I think that's where you're

going to see most of the headline stories. It won't be where all the assets are. That will still be low cost beta, but I think the stories are all gonna be thematic. Todd, Yeah, I think fixed income is where we're gonna start to see this. We've started to see ascid growth and is mostly in the broadly diversified products.

But I think there's a lot you can do from an active perspective and an index rapper or an et F rapper, and a lot of very smart people who work at asset management companies who are gonna be looking for new roles. Creating an index is going to be

very important. I think at active equity we get a bear market in stocks, there are a couple et fs that are poised to go all cash, and if they catch it on the downside and sidestep it and then get in on the upside, here's a situation where E T F company can set themselves apart performance wise, show that alpha and they're billions that come in there. I I don't I don't buy that these cash flippers that that go in and out of the market are going

to be the thing. Yeah, one of them will catch lightning in a bottle, but I don't think investors buy that that's a repeatable thing. Okay, so they'll be late because they'll buy it after the fact, for sure. But med Faber wrote this trend following white paper in two thousand and seven. Nobody read it. Nobody at all read it after the fact after the bear market. Hundred thousand downloads,

So it's crazy. Unfortunately, investors are late, But from a performance standpoint, somebody's going to be in the position to get it. So I'll riff off of Tom and say alternatives. And the reason I say that is because if you don't have this sort of easy market uh, and there is some some down or volatility or a couple of years that are negative. Anything that shorting is gonna look really good. And I think then you'll see a lot of uh some flows, and of course you'll see the

innovation on top of that. There's been a lot of innovation, but I think there'll be more. Alright. Number five, what's the problem with E S G t F s? How come no one is buying them? Todd? I just think people wanna buy simple things from an et F rapper, so far and so and the other part of it. The problem is is that the money that's in these mutual funds is sticky. People are not performance chasing when they're buying based on what matters to them from a

social responsibility, from a government perspective, and environmental perspective. So yeah, I just butchered. I made it seg on that. It's also complicated for people. So I think the money isn't flowing from mutual funds to et F the way it is for traditional active management. Maybe at some point it will, Dave, I know, yeah, you're an area I think, well, I think that money is going to come. I think it's a long, slow trickle. We have a thirty trillion dollar

generational wealth transfer that's happening. That money will hit E s G as that money changes hands, but it's just gonna take time. That money is gonna be very sticky and it's never gonna leave. Once that money is in an E s G fund, it's stuck. But will the firms survive? Will the will the products stay out there long enough? Will the firms be patient enough products to

be able to do that? We see products closed after a few years when they can't get The big thing is can they hang with the major market index is number one? And can some in fact provide alpha? All the back testing shows that there is some alpha to be gained there. That's the question. And well, let me flip that around on you dave this. Everybody says millennials are going to be the E S G um, the people who buy s G. But look, let's face it, you just said boomers are going to transfer. Boomers were

the biggest hippies of all generations. How is why is nobody selling to them? Why are they why think they were? That's where all these guys in Portland, Maine came from that started the E s G revolution, But that's not where this transfer is coming from. This is coming from very high net worth baby boomers who are managing multimillion dollar portfolios, but they're seventy years old. Those folks are

handing that money down. All the surveys suggests that E s G concerns are going to be a major factor in that wealth transfer. But is there pressure from institutions and foundations to actually allocate in that area as well? Well, yeah, that's what's building these products. You look at what's come out in the s G already, it's been driven by institutions,

the wealth transfers. What follows, right, But my point is, doesn't every generation have sort of the E s G thing going on until they get kids, responsibilities and money, and then they forget it's too busy. Yeah, that it's easy to say that, but we've never seen the kind of response we've seen to investor surveys that we see right now. Right when when forty five year olds walk in with their parents they talk about this with financial advisors,

it's showing up as the number one concern ahead of performance. Now, I don't believe that performance always wins, but it's definitely number two. Um, okay, number six. Will there be a bitcoin or crypto et F by the end of todd No, I see we moved the or maybe we haven't moved the goal post a little bit on this, But no, I don't think there is. The SEC has concerns about it. There isn't the data to backup that this can be handled in a way without fraud. It's a hard thing

to overcome proving that. And I think what we've seen recently is people have gotten hurt and in investing in it. And I don't think the SEC is making evaluation call as a result of this. But bad headlines saying people are are getting hurt with these products does not make it easier for these products to get approved. Tom Uh, they're getting hurt because the value of the cryptos going down.

There really hasn't been anything that's been fishy underneath. SEC is looking at it for sure, they're trying to get their arms around it. It will happen by the end of two thousand and nineteen. Yeah, And with the caveat that. My parent companies Ceboglobal Markets, which lists bitcoin futures. I think futures based products are going to be where this happens. It's really hard for the SEC to say you can invest in oil futures and net gas futures, but you

can't invest in crypto futures. They settled the same way, they trade the same way. I think it's just a matter of time. I think the time is. I agree with you. I do think it'll be a coin based one first, although, be given that you work at cbo E, I have to sort of defer that you probably are right. But I think a coin based fures you gotta roll them. You know, you gotta roll futures. That's troubled a lot of E T f s, And it's an extra layer of complication that I don't think you'd get from the

physical How do you how do you get storage? Right? I know I would rather buy a physically back one then a future one if I had a choice. Yeah. But if he use an eighties reference from baseball, Jim Rice is in the Hall of Fame. I think if we go ten years forward, the most feared hitter in baseball from the eighties is not necessarily a mantra that's going to get you in the Statistics don't back up. He's going to be in there. The data doesn't back up to the SEC today. Maybe it will, but today

it doesn't seem like they're comfortable with it. Okay. Number seven. Will there be a zero expense ratio et F in the next twelve months? Tom? Yes, absolutely, Todd Yeah, I think there will be swabbed. You guys have any other opinion on who it might be. So I do think it's gonna be swab I would have normally thought Fidelity

except the partnership they have with I Shares. I don't think they're gonna want to compete with products like I T O T that are commissioned free on their on their platform, where Fidelity is playing in the mutual fund space there that doesn't compete. I think Schwab is pretty close to doing it. Uh, you know, from where they are from an expense ratio standpoint, it just makes sense to gather asset. But but I think Vanguard is not going to want to give up the low cost trophy.

I think they're going to tell you know, everybody wants to rule the world right exactly. Continue. That's a good one. Number eight. What will be the biggest result of the new E T F rule the sec OF is implementing probably early next year. Dave, increased transparency. I think from an investor perspective, that's the part that really matters. All the other stuff is nerdy crap only I read what

do you mean by that? Meaning that they're mandating full portfolio disclosure, display of maybe it some discounts, um putting all this stuff up on websites on a regular basis, in a in a format that people can actually process. I think that's going to be a big deal. Tom. If you're an advisor, maybe five million to a billion dollar advisor, you never before thought about launching your own ETF. Now you can do it. Todd, Yeah, I agree with Dave. I think the cost transparency is gonna be a big deal.

People are gonna start to go a little bit beyond the expense ratio. Firms are gonna start to market not just on the expense ratio, since we've seen a race to the bottom there. I would also add that I do think you'll see unusual products launched because it'll be quicker and easier, and I think you could see a lot more um the stuff that people roll their eyes at. At the same time, I think you can see more active managers jumping in with products that are related to

their strategies. UH number nine is smart beta a fad that will go away once this e t F rule gets implemented, and it's more likely to have more active launches. Tom. No, factor strategies are always going to be there. Single factor, multi factor. Anything it's not market cap weighted to a great degree is smart beta, and if it's indexed, it's not active. Dao. I was working at Wells Fargo Niko. We ran a strategy called Tilton timing. It was a

multi factor strategy. It's never going away, Todd. I don't think there's any reason for it to go away. I think everybody in the industry hates the term and has their own version of the term. But yet when you see surveys out there, it's understood people at least realize this is a different approach then market cap weighted or not just the apples and ibm s of the world, that you are getting a different portfolio. I think this

is here to stay, and for good reason. People are getting good products and they're getting a slightly twist on the market cap weight of the approach. And I also think there will be an evolution where it's just called active eventually. I mean, because smart beta is act, it's yeah, it's quant active, Which brings up another question, which is should the term be killed once and for all? Todd No, I think it's finally moved into the mainstream and people

are comfortable with it, and it's like Kleenex. You know, you don't call a tissue even regardless of the brand to what it is. I think people are comfortable with it. Everybody that doesn't work in the industry realizes what it means to some extent. I think it's here to stay in for good reason. Tom, I think we should change E t f s the acronym. People still get it wrong, Tom, we should call them X funds. Don't fight a brand where you can't win. The ets are here to stay.

Smart bit is here to stay. Number eleven. Where will E t F growth come from? The most Which sort of investor type? Institutions, advisors or do it yourself retail? This will be in the next five years, Todd. So institutions. I really think that in many cases they've been laid to the party. They the rules haven't been fair for them. Insurance companies have about one percent of their potential assets invested in fixed income et F. The rule is now just changed to make it so you can call fixed

income ETFs fixed income. And I think we've started to see uh, the use of e t f s instead of other futures and forward contracts as well. I really think they're going to help to drive that and improve liquidity, which then helps everybody else. Add as well, Dave agree, advisors are pretty tap market six advisors. Now utt f s in some fashion or another. Retail will get there, but define contribution for owen K is not going to really drive anything because mutual funds make more sense. They're

it's all coming from institutions. Tom, they got it, and I will add that institutions if you look at their seventy eight trillion in total assets, only about one is an et F, So I agree, I'd probably agree, although do it yourself retail. We had Fidelity Matt Goolay in here and we asked him what the white space and ETS was and he said, the retail investor, the direct retail because right now I think that percentage is ten percent maybe or less, and there's more education going on anyway.

UM I put that second, and the commission free expansion and actually no commission products that Vanguard has had, and the broadening list. It's making it easier and easier to use ETFs across where it is. I think that's gonna grow. I just think there's the pike is potentially so much bigger from institutions if they if you make a five million dollar trade, much much easier than it is. If you know, I can't do that in percentage basis. Retail

will grow faster on a dollar basis. It's institutions dwarf it. Like, how David did that better than I did? Dave? How big do you think that slice could get if it if they only have one invested right now? Where do you think it could go? Speaking of that, this is a great segue question number twelve. We had Bogel on

the podcast a couple of weeks ago. He gave us a little excerpt from his upcoming book, which was a scoop which he said, in the future, these big asset managers are going to have to mutualize themselves, adopt Vanguard strategies survive cutting costs will not be enough. Do you agree with this, Dave? I know because I think capitalism is kind of a force of nature that can't be turned off. Tom, Can you see Abby Johnson going into Dad? Hey, Dad,

I got an idea. Letty. I think it's gonna be even harder for you know, companies that are publicly traded. You know, Alliance Bernstein that that doesn't have an et F present, Black Rocks already, that's already gone in there. But firms that are trying to get in and uses as a way of doing it. I think publicly traded companies are not should they if the better question to me is should they do that in order to bring

costs down? It's certainly something for them to consider, But I don't think they're going to do that because shareholders. But what do you think the result is in consolidation then mergers? Yeah, I think we see what we see right now. It's hot m and A. M and A is going strong, But doesn't mean that there's not room for innovation. All right. Number thirteen, let's talk about buzzwords. You know smart beta was the big hit from five years ago. The new buzzword is machine learning and AI.

There's been a lot of launches where they just slapped that term on it. Is this a real thing or is it marketing? Dave, I think it's a marketing term for the kind of innovations we've seen in quant investing every day for the last forty years. Technology is really helping from a research standpoint. You think about anybody coming out of school want to go into business, they want to go to Goldman, they want to be an analyst. Right, you don't need them today. Computers do the whole thing. Um.

As far as back testing, it continues to innovate. Listen, machine learning is going to help in a big way going forward. But as uh they've said over at JP Morgan, we really haven't been tested in a bear market with AI. At the Helm Todd, I think it's being used in a mutual fund rapper more than people realize, and it's been working. And Goldman for example, asn't you know, it has a very strong presence using quantitative investing in that way.

I think if they and other firms bring that into more of an ET f rapper, I think it's going to help. But yeah, buzzwords help to get people to pay attention to it. You think you're smarter than an index based product, which is basically following the same rule book at the computer would Joel, what do you think of that term? I mean it's it's it's definitely You've written about it, and yeah, no, I actually think that

it is totally legit. Um. It takes out a human element, you know, and it means it means something way beyond tfs. To keep in mind, like this is I think gonna be a technology that continues to evolve and when people can harness it, it's going to be really powerful. I do think there's a lot of bunk to it, but when it's legit, it's legit alright. Number fourteen. Do e t f s pose a systemic risk? Todd No, The e t F is just the vehicle that people are

getting exposure to the marketplace. So I don't think there's too much money going into e t f s that are gonna cause it. It's still I think it's three percent of the money that's in fixed in com ETFs is the size of the overall fixed income market. I think it's about a little bit bigger than that from an equity perspective. There again, I to use the phrase again, they're riding in the backseat of the car while individual stock pickers are driving the market. When that market becomes volatile,

they're gonna they're gonna fish crash. Gave ETFs a bad rap. Are we going to see that again? Are we going to see another flash crash again? Yes, you don't know what's gonna happen, but something is inevitably gonna have a black swan event is going to happen, and somebody's gonna get that teachers, which is what the flash crash was. Why does that always come up as an E t F issue. Et F got hit, so the proctor and gamble,

So will they be painted with the same brush again. Yeah, of course they're gonna always get the blame, always get the blame. But the money that's flown into E t F since then is what double and triple. It's not as if get scared out of the only people who are talking about it. You know our mutual fund companies that want to use that as a reason to say

stick with us, will hold onto your money. At four pm, E t F Well, E t F s right now own seven percent eight percent of stocks right, whether it's Apple, any stock. What number would that have to get to before you thought there was this the stomach risk post tom I don't think it's going to be a risk at all, alright, Dodd, I don't. I would be making up a number that's out there. And like you, I'm

not in the prediction business. Yes you are. Your whole business is predicting like not in not in the what if the sky is falling, not wild scenarios. Okay, all right, now, now that you guys said there's no systemic risk problems, give me one legit concern you do have regarding e t S tom Um. I think if we get into some thematic ETFs that are illiquid and you know, whether it's emerging market's emerging market debt, that's a little bit of concern, But over time we've really done a good

job handling it. I don't really have any major concerns about liquidity at this point. But as we continue to branch out and innovate, they're going to be some unfulfilled or or areas right now that are not represented in the e t F space that might be a little bit risky going into, especially with the new ETF rule, okay, Dave. Uh. Similarly, I think that e t F now give us access to virtually everything leaveriede oil, whatever it is you want. We don't have a way of gate keeping any of

those products from individual investors. I think that's a problem. Eric. I know you always talk about your system for red lights or movie ratings, um, but ultimately it's going to have to be something that comes from a regulatory standpoint. It's and I have to come frankly from FINRA. They're gonna have to put a place something in place that it actually creates gates for some of the more esoteric products.

What would that look like. It could be as simple as FINRA saying that people who access a vehicle like futures based product have to sign the same paperwork they would if they were going to open a future's account. Todd, I think the risk is that people performance chase without understanding what it is they're buying. So they're buying something that was hot and then they don't really and they walk away and don't come back to it until they realize that the thing has crashed back down to the

middle where it is. I think the money has gone into e t s without people understanding what it is they're buying, and if they're buying well diversified market cap weighted products, then that's great, but in some cases they're buying things that they shouldn't be buying. Yeah, and I would riff off that. My biggest concern is in line with Vogels, which is overtrading. They're so good, they're so cheap,

they're so easy, and you get everything. It can be a bit like stepping into a casino and you could lose your mind just trading all day. But you could do that with any You could just say same. I mean, that's just always how it is. I agree. But although to retail investors there's extra things they serve up in certain ways. So that's that's what's important. From the brokerage perspective.

The firms that are going with so broad a commission free offering, how important et F education is making sure that there's enough there so that they can try to protect investors from themselves. I actually wonder if there isn't like a different solution that you know, I think of like the conversation we had with Betterment a little bit, which is when you actually go and try and trade something,

they warn you about the tax implications of it. So I wonder if there isn't some sort of like technological or behavioral solution that doesn't help incentivize people to not trade too frequently. But that would be but that would be sort of on a platform by platform basis, I think. And there are pop ups that are on some of the platforms. I mean, they do exist, but I hear you.

I think and obviously our system, like I said, I think there should be movie ratings for E T F S or something akin we have that if you have a terminal, give me a call um um okay, number sixteam related. If you were the SEC and you had, you know, complete control, would you ban leveraged and or vix ETPs right now? They absolutely not? Tom Todd, No, I think they serve a role for some people. I just think they're abused by probably more people than they

should be. Even with what vix went through, vix has been very very low. There's a market there, there's a demand. All these products do what they say on the tin, and that's the thing. And that's why I said, I think the right answer here is gate keeping these products for certain kinds of investors. If I have a Schwab account, I shouldn't be allowed to trade something based on futures without some sort of positive acknowledgement that I know I'm

gonna get my face burned off. Well, you know brokerage firms, you know that wire house firms, They in many cases they preclude advisors from them. So the differences a self directed investor who doesn't want to pay for that extra service or or advice that's there, that's what they're missing out. It shouldn't it shouldn't be a service to put up a pop up that says you haven't filled up futures market paperwork. Would that be a DOCU sign agreement? Sure?

Um okay. Number seventeen will brand name index providers like M S, c I, SNP and, hate to say it, Bloomberg Barkley's be replaced by self indexing as fee pressures come down, Dave, Uh, it's not a yes or no answer. Over time, it's gradually hiding in that direction, especially when you look at UH from the cost standpoint. It's going

to be a part of it. And there's some companies out there that you know, three or four percent As far as an indexing charge really means something, And when you ask the individual investors and the asked the advisors, is it really important that that index name being there and it tied specifically to it, it's not as important. So since I said institutional investors are going to be a key driver going forward, Institutional investors want in many cases want that SMP, want that m s c I

want that Bloomberg Barkley's behind it. And so the products that are catering to that market are going to do so. And it's but it's not because they love the brand, right, It's not like nobody got fired for buying IBM. It's because they want to buy an ms c I emerging markets product because they know the methodology will match up with how they're thinking about, you know, their US exposure or some other country. Right, that commonality of methodology is the reason you pay up to be part of the

self index be close enough. Well, it can if you're not an institution that needs to run it through Bloomberg terminal to do analysis. I agree for anybody not an institution, I think it's it's it's going to go that way. Vanguard proved that doesn't matter. They went to CRISP and they got seven hundred billion in those indexes. Since then, black Rock dump some some of our indexes and they

did find. And I think the one thing that is there's some rock star indexes like SMP five hundred and ms c I emerging markets that probably are just too big to mess right, Okay, last three which are I think more on the lighter side, but you know, looking for your legit answers Number eighteen. If you could invest in one et F with your entire life savings, what would it be, Tom, I'm gonna say the Investco Guggenheim ride X RSP five hundred equal weight. Wow, that is

that's not a bad pull at all. Yeah, it's out of the box, but not that crazy RSP. So this basically is SMP five undred, except every s thought gets the same waiting, which I think is point two. Yeah, Todd, Yeah, I didn't think we're going to get to this question, so I didn't have an Okay, okay, that just super boring s H B B B yeah Todd, Yeah, I would go to total market a total market product as well. So I shares I T O T And why would you pick that one over SWAB? I think I like

the SMP brand that's behind it as well. That on the fly, I mean there there's you know that you've got vanguards VT V T I, So I would go with VT. That's the total market plus the international. It's global, so it's basically the whole equity side and one shot. Now there are asset allocation ets but for some reason I don't like them. Nobody does. They do bonds and stocks together. But I'd have to go with that VT

if I had to pick. But I now have a flashback that I think I got asked this question the last time I was on, and you're gonna play the clip when I use a different problem. Um, Dave, that's a good question. Why don't people like the asset allocation ETFs sort of like do it all for you in

one shot? Well, the big reason is because a lot of these UH funds are sold by advisors, and if the advisor puts you in a single product, you fire your advisor, right, So you need to have some break up of this in order to have a conversation around what the asset allocation is. And also, your risk tolerance is not gonna be the same as mine. I'm older than dirt, you're young, you've got a young family. We're gonna have different risk tolerances and Traditionally you rebalance the

asset weights to deal with that. UM and target tape funds have never taken off in e t f s, frankly because they don't work. In for case, you guys recently wrote about that, I think on et f dot com. Thank you for that. I was that I was quoted in. So it's not just it's it's not just a shameless one. What he have referenced that article if he was not quoted, that's the question. You know, he is too smooth. Okay, Joel,

do you have an answer for this? Have you still think my great idea for an e t F is the easy button ticker easy? And I still want that thing to exist and it's like the only and that was the idea, but nobody put any money in it. Well, big idea doesn't mean it's not a great idea, man. Don't take it from a blast from the past of the eighties. Okay, number nineteen. If you could invest in only one e t F with the ten percent of your account that you have some fun with, what would

you pick? Dave? Oh, that's tricky. Um, Hey Todd, somebody come back to me. I feel like I didn't mean to be using eye shares again. But I like M t U M so. I think putting a little bit momentum behind it. I think the trend is your friend. If it's part of the portfolio in a in a slice instead of the whole portfolio, I think can add a little juice to it. You're so risky, it's ten of my sometimes do you have after dinner mints? Before dinner, I'm gonna get crazy and take my socks off. I have.

I have a crazy answer. My crazy answer is e M l C Emerging market local currency. That's that's a good one. But you're not going to hit a home run, not like I mean, it's not gonna triple by that one. Well, because I think most people don't take enough risk with their bond portfolios in general. It was easy to grab HACK or you know, you know, ARC or something that's out there on the edge pushing technology. But that's also where you would play with single stocks. E M L

see something I'm never gonna buy on my own. I Am not going to go figure out how to buy South African debt a r k K. That's the r innovation, right, Okay, So it's got we talked about aids, active management. It's got genome sequencing in there. I mean, it's kind of a theme thematic greatest hits man And if you ever go see those people, they have an open house every Wednesday afternoon. You can sit around and chat with the analysts. Uh,

they're doing some stuff that's pretty special. I would go with m J. And I say that because I like E T f s that are out there wrapping up a toddler industry that you think is going to grow big, which I do and has not. In these these companies will take them years to get in a lot of them getting it's an acquisition. It's a a lot of targets for acquisitions in there. And I just think that's part of investing is speculating, and that's what I would

go with. How about Udell, I don't think part of investing is speculating, but if we're playing that game, well this is this is the ten well maybe one percent, right, But the microcap question, I always like that one eric going into the trying to get the super super small stuff that might have a huge payout. And the microcaps interesting, there's a thousand microcaps and um, almost none of them

are even in the broad market. But Dave shaking his head the wrong way to play microcaps because you can't because you can't close them. Right, So you wait, if you want microcap, you want to go find some actively managed, you know, probably too expensive mutual fund that can close the fund when it hits a billion dollars because if it's microcaps, you can't buy enough of them to matter. And then that's a great point slapdown again. Sorry, sorry, Joel.

All right, Joel, I'm gonna let you ask the last question since it's it's what you're how we close all the shows. Okay, So, Dave favorite ticker, uh, you know m J. I think MJ's a fantastic ticker. Tom favorite ticker, uh the Wisdom Tree, short egg etf shag. Yeah, so you are going back to the eighties. Those are early nineties, I think, okay, and the sixties and Todd, what was what was your favorite last time? And has it changed?

So I don't remember what I had last time, but it has changed because I actually wasn't caught off guard with this, and since we are doing an eighties theme here. In the eighties, I was eating a lot of peanut butter and jelly so p B and PBJ. PBJ is the investi dynamic Food and Beverage portfolio. It's like chicken and beer companies. It's like companies that make peanut butter and jelly. Yeah, honestly, yeah, it's like what you when you go to a barbecue. It's these companies basically provide

all the stuff hacks. Hacks a good second choice. Hack is really good. I like hack. I like verbs, so I like move hack. That's why Toke I think is a gem. So I'm a big verb guy. I like verbs, so I would have to go with hack. I think my new favorite is is Nash. I mean it's not like it's a new product, but I just love the fact that's okay, alright, there you go. Some of the Nashville et f Yeah, man, I love the idea that somebody like took a city and wrapped it in an

e TF and no one bought it. It's funny. We have some nerds here, So can you guys tell me how nash wasn't the first local et f ever Oklahoma? Yes, there was an Oklahoma e t F. I mean, talking about being ahead of your time, I thought, oh, there's there's hardly anything and fixed income in commodities. Let's let's do Oklahoma. Well, we hope we bring him back. One day. They brought ef Hutton back, didn't they. And there was a Texas right, there was a Texas ETF. Yeah. Yeah,

there's the person who can with local shares. I didn't meet him. He did want to do other cities. Should just go through and do every airport in the world, so you get you know, O R D and JFK and well Nashville. They were saying that JFK's I'm pretty confident that that's like one of the I shares small JKF J Okay, I'm still thinking about E T F S being e F T Yeah. I got a great I got a great send off. Thank you nerves. Well, guys,

thank you very much. This was great. You gotta talk about cramming a lot into one podcast, Joel, did you learn anything? I learned a lot um, mainly that you guys really like to slap down non nerds, so I appreciate that gate keeping man. Alright, guys, it's been a pleasure see you guys on the flip side. Thank you guys, thanks for having Thanks for listening to trillion until next time.

You can find us on the Bloomberg terminal, Bloomberg dot com, Apple Podcast, Spotify, and wherever else you like to listen. We'd love to hear from you. We're on Twitter, I'm at Joel Webber Show. He's at Eric Ball Tunits. You can find Dave Nodding at Dave Nodded in A d I G, Tom Leiden at Tom Leiden L Y d O N, and Todd At at Todd c f R. A. Trillions is produced by Magnus Hendrickson. Francesca Levie is the head of Bloomberg Podcast