What can of trains.
I'm Joel Webber and I'm Eric balchunis.
Eric. The thing that we've talked about on the podcast before every Halloween or so, we try and do an ETF graveyard, which are things that liquidate, but we've actually never talked to someone who's actually liquidated up on ETF, and we are going to do so today.
Yeah, the whole idea of how hard the ETF industry camp a lot in the bitcoin ETF race, because.
You've long called this the ETF terror dome.
Yeah, it's the ETF terro dome.
So if you get a hundred million like some even the like the eighth bitcoin TF is one hundred million, I'm like, that's really good. Because it's a hard market. Advisors are cost obsessed. Your performance out of the gate, timing matters. There's a lot of variables, especially if you're doing something other than a vanguardian cheap thing. Right. It's interesting to find stories of people who took the chance,
you know, in this case, folded up. They gave it, I don't know, five six years, tried everything they could, the market went against them.
It was tough.
These stories I think have universal appeal because twenty five percent of every ETF launch is closed, so your odds are one in four of not making it, and especially if you're smaller and it's your whole thing, right, Blackrock and those guys can sustain the ETFs that don't.
Sell for a while because they do all these other things.
But for an India issuer, this is you know, a lot of your whole life gets poured into this ETF. And these stories are really interesting to me. But I give everybody credit. It takes gut stroll to launch an ETF because it's public. The performance is there every day, you can't hide from it. It does take a lot and it doesn't always work out, and that's why it takes guts.
So we're gonna speak with Validia Capital Management, where we've got Jack Foehand who's the president, and Justin Carmono who's the partner. The name of the ETF was Validia Market Legends. The ticker was va l X. If you like listening to them, you can check out their podcast Access returns, this time on Trillions inside a Liquidation. Jack, Justin, welcome to trillions.
Thank you for having us, Hi guys.
Okay, So the ETF that we're going to talk about is the validia market Legends ETF, which rip no longer. When did it launch and when did it liquidate?
So launched in twenty fourteen and we liquidated it. It h during the pandemic in twenty twenty.
Okay, and why what happened?
Well, were going going back to the beginning, I should, There's a lot behind that. So we started.
You know, we're primarily quant investors, and you know, when we look at like quant strategies that work over time, I think they tend to have a little bit of a value.
Bent to them.
So we had seen going back like in twenty thirteen when Cambria did shareholder yield, that ETF did really really well. I mean Eric knows better than me, but it got like three hundred million in assets pretty quickly. And you know, the the ETF space, like in that space was much less competitive back then. So in twenty fourteen we decided, you know, we should do it, this idea of like following the strategies of Legends. We thought we could market it. You know, it was a good thing for our clients
from a tax efficiency standpoint. We thought we'd get some outside capital. So we decided to give it a shot.
So what does legends mean? What were the legends?
So the yeah, the idea is basically taking the publicly disclosed investment methodologies from famous investors, but it's extended beyond the likes of Born Buffet, Peter Lynch and Benjamin Graham and other strategies that have been written about in books or academic papers and basically creating models that utilize those
strategies to select stocks. And so what the Market Legends strategy specifically was doing is at the outset, we were taking ten of those unique stock selection models and building what was effectively one hundred stock portfolio that sat inside the ETF rapper. So, and I think they're still around. I remember Alpha Clone was out there, and there was some other cloning strategies that exist, but they were using
thirteen as filings. So we thought we could maybe stand out from a strategy perspective by saying, Okay, we're capturing these fundamental strategies quantitatively and let's stack these models together to create the actual portfolio for the ETF.
I mean that sounds like a good idea because it's like, Okay, if we have these got people investors legends over time, and you could kind of deduce what their strategies were and bring them into an ETF. We talked a lot about how ETFs can be like a vehicle for trades before. So when you launched, it must feel a little bit like you got bottled lightning. What did it feel like to bring this to market?
Yeah, it was fun just learning like what goes on behind the scenes to get it to market in the first place was really cool because we knew nothing about that.
But yeah, you know, we thought we had a pretty good opportunity.
I mean, we had developed a pretty good plan in terms of how we would do this, and obviously that plan had to change a lot when we realized the reality of the ETF market. But you know, we had some of our own client money we were going to put in there. We thought we had a good story. We thought there was a good factor investing underpinnings and what we were doing in terms of like exposure to value and at that time turned out to be completely wrong. But at that time we thought it was a great
time to invest in value. We thought value looked really attractive, so we thought.
All that together gave us a shot.
I mean, I don't think we had any illusions that it was going to be easy, but we thought we had a decent chance well.
And I think one of the things that we realized too that that was different for us because we were running SMAs before that and we still do. But you know, when you come into the fund world, there's a whole
different set of compliance rules and regulation around performance. So out of the gate, we couldn't show anyone any back tested or hypothetical results, and so you know, we started whatever it was December tenth of twenty fourteen, started tracking the actual fund and it was always the question of people liked the story, but it was like what is the performance? And so you start with kind of a day one with no performance, and then you have to build it up, and just the first couple of years
for this type of strategy just was tough. So we were always struggling in that sense too.
One of the things as an analyst, you brought up Alpha Clone and then I also think of GURU and GVIP. These are eachfs sort of look through thirteen F filings to see what stock picks hedge funds have bought and sold, and a lot of times these funds end up with a lot of tech, so they do. Okay, I can't say any of these have crushed it and been huge successes.
GURU had a little nice run there, GVP as a Goldman, so I think some people like that brand, but they haven't really like crushed it either in performance or flows.
But they've survived.
I think because they largely are in large cap us equities, which have dominated.
You guys are in small value.
I guess as an analyst, I would have assumed this was large cap, but you weren't looking through thirteen f's right, and so as these market legends, what led you to small value? Did you pick small value and then say we're going to take these legends strategies and apply it to small value or were the legends picking small value? I guess I don't understand that.
No, it actually flowed through the strategies themselves.
So when you look at say Ben Graham's strategy, or any of these strategies that have either a long term track record on their own or follow people who have long term track records, these guys tend to be a little more of value biased. And also when you run a strategy and you run it as an all cap strategy. So you know, our universe was, say twenty seven hundred stocks,
give or take we can invest in. When you run an equal weight strategy with twenty seven hundred stocks, the natural thing is you're going to end up with much more small cap exposure than say the S and P five hundred, because one you're equal weighting, and two you're picking from a much larger universe that has all those small and midcaps, and you typically find more small, more
value in that small and MidCap area. So it was just like a natural We didn't come out saying we want to launch a small cap value ETF, but it was like this natural progression from the type of strategy we were running.
And how much experience did either of you have around with ETFs before the launch?
Almost none, right, justin yeah, well, we were running SMAs and we may have invested some of our client money in ets, but in terms of like launching a ETS and the inner workings of it, we basically did it all internally. There's services out there now that you can kind of partner and white label, and those are great
for a lot of different shops. You know, we kind of said we got our own exemptive release, We interfaced with US Bank on the compliance and the trading jack did all the custom custom creating redeems in terms of sending those trades to the to the custodian, to the brokerage firm or the trader. So yeah, So, I.
Mean there's hundreds of launches a year, thousands of ETFs out there. What did you what do you think you know now that you didn't know then about bringing an ETF to market in terms of the success.
The biggest thing I think I know now is that, going back to what Justin said before about about short term performance, is that when you launch an ETF, you've got your story, you've got your marketing, you've got all that stuff.
But what you do in those.
First six months, that for a year, the first two years, is a huge party or success, and it's something that you cannot control. And so for us as a small cap value manager, that ended up going the other way. You know, we launched at the same time as Kathy Wood or right right around the same time. That went the you know, obviously in the positive way for her, in the negative way for us.
But this is not an excuse for not working.
But that is like maybe not withindts, but with these type of active strategies, people don't have any performance track record to go on other than what you've put out in the real world, and so they're going to judge you by that, and that's going to be a big part of your success.
And you know, in our case of our failure.
When did you get a sense that it wasn't going the way that you were most hoping for.
I guess it took. It took a little while.
We never had great performance because as you guys know, small Cat Value coming out of twenty fourteen had many years where it didn't work.
But we did do okay.
I think we got to like thirty million and assets at one point, so we crossed break even. So it wasn't like it was a failure out of the gate and it was just a disaster. It was like periods of great optimism and we got up to thirty million, were above break even, and then periods are great pessimism.
In twenty twenty was a great example of that.
You know, when the market was down thirty five percent with small Cat value to cut in half, so you know, I think our ATF went down to like fifteen million, so it wasn't.
It was a back and forth justin.
You may have some some you know, comments on that, but it was got back and forth as it went.
No, I agree with all that. The only thing is like at the low end COVID we had I think it was like something like thirteen million in assets in the fund and we had a six year track record that it just wasn't good. And so as a business, we kind of just had to say, like, we kind of have to shut this thing down because you know, kind of pulling out of this is going to be tough now in retrospect, to be honest with you, those types of stocks that we were owning and we were
part of what we did with the ETF. We actually followed like a monthly rebalancing, so every month we were rebalancing one tenth of the fund. So we were a little bit more active in that sense. So during that COVID decline, we were rebalancing and finding like more attractively priced value stocks. That was just part of the process. And then kind of coming out of that, that kind of stuff took off. But we shuttered the ETF I think in like May of that year, so at least
the fundholders didn't get that. Now some of those clients' assets moved back over to the SMA, so we were fortunate in that sense.
But yeah, so I'm curious, so you had the six that's your track record, and just wondering, did you have you kept a version of this strategy in place so that you could kind of track what the strategy would be doing had it not been liquidated.
Yeah, we actually continue to run it.
So for any of our clients that were in the ETF, we basically moved them the day the ETF shut down into an SMA strategy. There was actually a little bit more aggressive focused, small cat value version of what the ETF was that obviously did exceptionally well. And so you know, for us, that was something that we questioned after the fact, did we shut this ETF down at exactly the wrong time? Because we basically shut it down at the COVID bottom And as you guys know, small cat Value went on
to have a ridiculous run in the next year or two. So, yeah, it did well, and you know, the clients that moved to the SMAs did well. But you know, we always have that question, you know, did we make.
The right choice that strategy that Jack's talking about kind of tracks AVUV, but with a little bit more optane. So the event to small cat value figned with kind of more variation both to the up and downside.
Which by the way, is a pretty big hit.
Avantis has a pretty decent hit with that small value fund, but it came out better timing. And it's interesting. It's always darkest before dawn. They literally closed it like four in the morning, you know what I mean. They didn't realize the sun was just about to rise. Ted Aronson, who's a guy I interviewed for my Bogel book, he also closed up at a similar time. There was a couple shops who were just like, I don't get this market, Like they almost had like an existential crisis, and they
were like, the hell with it, I'm done. And most of them were value type investors, because value was supposed to come back like three or four times, and it would have like a couple months, but then growth would just run it over again and again. Like Marshawn Lynch, you know, the the cues would go beast mode, as
we say, and I want to ask about that. We have been studying the cues and for us, we felt like last year, the cues We're going to have like a decade where small value and these other things were going to do well, and the cues came back even though.
Rates were high.
I want to talk about the existential crisis that people who are steeped in academic literature, who have mentors who have taken CFAs and multiple degrees. You know, only one manager on planet Earth has outperformed QQQ over fifteen years, and it's this guy, Ron Barron. And he only did it because he bought Tesla like fifteen years ago and let it become like fifty percent of the portfolio, and that was the only winning way to beat QQQ. Everybody
else underperformed it. And a lot of the training is, well, these stocks look over valued, I should go into better deals. How do you feel about that? Because all of the academic literature and everything's pointing to looking at fundamentals and value, and yet the cues just kind of runs it over with these seven stocks leading the way. I guess I want to talk about your mentality and your spirit as this goes on year after year.
Yeah.
No, it's really really tough because, like you said, I mean, if you look at value spreads or if you look at any kind of data, someone like us behind the scenes will look at to say, is value attractive?
Is value cheap?
It's been that way, It's been cheap for a really long time, and we have had a good on recently. But like you said, it's nothing like what's going on with the qqqs. But you know, ultimately this is something you see throughout history.
There's two things with this.
One is this is something you've seen in other periods in history, and value has always come back, So that gives all of us that follow it optimism. But the other thing we tend to say to a lot of people is small cap value investing, particularly small cat value, aggressive small cat value investing is not for your average investor, or not for a lot of your average investors.
You have to be able to sit through these periods.
And you look at the period, say from two thousand to two thousand and two, after you know a period that ended in ninety nine where small cat value was awful, you got ridiculous performance over a three year period.
And that's kind of what the history.
Of value tells you, is that you get these long periods where you struggle, you get outrageously good performance over a very short period, and if you can't stick through the long periods, you don't get the short period. So for us, for people who look at data like you said, I mean, we're very very optimistic about small cap value.
It's still exceptionally cheap. But also, like I think every investor has to look themselves in the mirror and say, can I sit through those kind of periods or maybe as you've talked about ERIC a lot of like in terms of how people size ARC and things like that, you know, sizing small cat value is a smaller portion of your portfolio is probably a good idea because it allows you to maybe sit through those kind of periods.
Yeah.
No, I remember one year we said that it was q VAL, which is your colleague West Gray's ETF. We thought that could be the next ARC because we're tobias is because it was so concentrated and if the regime changed that one should pop the most. Then we thought it had ARC potential, but it never lasted long enough to turn heads. It sort of needs to be like over a year, you know, it has to like have time to set in, and it just never got going.
I think the other question I have for you about value is we had Kai wuh In here who runs the it tan ETF. He's a you know, a quant guy too, and he talks about intangible value, which is like a lot of the numbers that all of the quants look at. The dark matter that isn't measured is the brands and the brand value, and there's the people and this other stuff that makes the Magnificent seven and the queues actually more justifiable, and the sort of beaten
up value stocks actually more justifiable where they are. In other words, that gap that you might measure that seems like values obvious is actually more narrow because of the intangible value not measured by the numbers.
Do you have any thoughts on that?
Yeah? No, I think Kai is one hundred percent right. We've actually had him on our podcast and talked about this as well. If you look at a company like say Microsoft, and you look at the price to book, like, is Microsoft's valuation relative to its office buildings and whatever physical things it has? Does that make any sense at all? No, it doesn't make any sense. So it obviously makes sense to adjust for its brand. It's technology like all that stuff.
And so I think, actually what Kai is doing is awesome, and I think it's a great compliment to traditional value. Another thing I would say, though in favor of traditional value, is when you run like a very cheap small cap value strategy, the types of companies you're investing in are not the types of companies that have a lot of
intangible assets. So value does a better je of valuing those kind of companies that are steel companies or whatever they are like that they don't have tons of intangible assets. And so as much as like the christ to book is way way off for Microsoft or Google, it's a
better valuation metric for those really cheap companies. But when we had Kai on, he talked about the idea of blending both, which is, if you have your traditional value, taking this sort of new intangible based value and putting them together in a portfolio can make a lot of sense because we don't know which path the world's going
to take. We don't know if these other value companies are going to come back or if these intangible companies are going to continue to lead the way, so a combination of them can make a lot of sense.
Okay, while we're on this sort of nerdy value talk, I got to ask you about a report that I was writing last week. We had the guy Tim Rittolo on ETFIQ and this guy, you know how, you guys launched after a horrible run for value and you thought, Okay, it's good to launch after a bad back test because then you have room to run if it goes up. I kind of dig that that makes sense to me. You didn't get that run because it hasn't happened yet obviously, but a lot of ETFs launch after a good back
test and then they actually go down. Studies have shown that after it hits market generally there's an underperformance period because they launched at the top.
This guy launched.
The CTF detracts coal stocks, and as we know, cole stocks are just like demonized all over the place and a lot of them are really just beaten up. But if you dig into this, it's fascinating, Like they the colestocks are on one hundred and seventy percent run, but their price to earnings is still five, which is half of their sector, which is the material sector, and the S and P is like twenty five.
I think the queues is like forty.
And it's interesting to me as value investors when you see something like this, you know, what's your take on that?
Have you ever seen that.
Much momentum and still that much deep value in one place?
I mean maybe not, But after the pandemic we kind of saw that too, Like some of the pees at the you know, for all value small cap value companies coming off the you know, off the bottom of the pandemic, we're ridiculously low. And then you got that run where you had you on two hundred percent and they still were pretty cheap. You know, we didn't see like value spreads getting create or anything like that. We still saw
them on the cheaper end after that. So yeah, and that's you know, studies have shown that's when you can really get some really great performance, you know, when you can get value momentum together working together, like you know, like your reference Wes Gray before like q mom became actually a value ETF for a while. Then like you had q valan q MOM looking very similar because value was doing so well. So you can get some of
your best performance off periods like that. They just they just don't happen that often.
Now I forget what year it was, but we got caught in some energy names because the trailing twelve month earnings were really high, but the price of oil had fallen dramatically, so the forward earnings were coming way down, and so our system was picking up these energy stocks that looked like they were like incredible values. And I think that hurt us. I forget if that was like twenty fifteen or whenever, that was, whatever year, but I think Jack, we we sort of modified some things coming
off of that with our value trap. We kind of run a value trap negative screen to try to avoid like really bad performers, like the worst five percent of our universe. And I think that was a result of those energy positions, if I'm remembering correctly.
Jack.
Yeah.
You know, one of the things anybody who does the type of value investing we do face is you're using past fundamentals to try to predict the future. And so what Justin's referencing with the value trap idea is, well, what types of scenarios would those past results tell us nothing about the future or tell us less about the future. And that's the idea that if you own a bunch of oil stocks and the price of oil just plummets, well that's not in the past fundamentals yet so we
try to do some adjustments around the edges. To say, right, in a situation like that where the past fundamentals are not as predictive, what other things can we use to try to enhance our strategy.
So I'm curious, knowing what you've known about ETFs now and this sort of baptism and exposure to like having a great idea and the market not totally rewarding the strategy at the time, and your conversations with financial advisor and clients and everything else, how do you evaluate just the ETF market as a whole now. I mean, there's so many things there. Obviously Eric's brain is filled with them.
Normal people aren't like that, But like, how do you when you look at the options that are out there, how do you evaluate them now? And how has that change from your experience?
Yeah, I mean I would say it's even more crowded and even tougher than when we started. And that was one of the reasons why when we look at shutting it down and say, well, you know, it was a mistake to shut it down because small.
Cat value went on to do really well.
You know.
The other side of that coin is there were way more small cap value ETFs in twenty twenty when we shut it down, than there weren't twenty fourteen. So it's just it's a very like Eric, what you call it, what the terror Dome, Eric, Right, it's a you know, it's just a much more competitive space. It's a tough space, and we knew that going in, but I think it got a lot tougher as it went on.
When we were trying to get the ETF up on some platforms, we went into UBS down and I think it was Jersey City or something like that, where their ETF due diligence team was, and we kind of pitched them on the market legends ETF and they were looking at it and they were asking us questions about our firm and the strategy and stuff, and then they're like,
what are your plans on launching other ETFs? And we sort of at the time we were like, well, we're putting on because we were funding this on their own money, so we said we're putting all of our resources behind
this ETF. But in retrospect, now that we kind of know everything and how it all shook out, like I could see how a firm like UBS would want to see a firm like ours launching multiple strategies, and if we would have launched a value strategy, a growth strategy, maybe something using momentum or something like that, I don't know what. You can slice and dice a lot of our stock selection strategies in a lot of different ways. So it's I can see why they were asking that question,
and we kind of got it wrong. Like what we should have done out of the gate, if we had the capital to do it was probably launched two or three of these things, because maybe the growth one would have took off, the value one would have lingered there, but you could have used the growth profits to stay in the game long term for the value one to eventually see see the data.
And also if you let's say you get thirty million in the growth the nobody else bought it, it would it might have doubled to sixty just on the market performance, which helps you stay in business. It's interesting them and Kathy having this sort of like launch date where they both thought they were right. Kathy happened to get the performance. Not to say either the both ideas were completely logical and genuine, but it's just interesting and both went all in.
I mean, she doesn't have any value hedge, that's for sure. She doesn't just doesn't believe in it. Could you guys even launch your growth stocks or is that just against your like, I don't know, like being to be into high growth.
No, not at all.
We have strategies that are growth, We have momentum, We have all kinds of strategies. They just tend to have a bias if you look at them all as a whole, they tend to have a bias towards value. But no, we could have done that, And to Justin's point, I mean, that might have been the best way is to have you know, you see that a lot. I think with ETF launches, people will kind of do both ends of the spectrum so that you're at least gonna win on one side of it.
So that might have been something we should have done.
We haven't talked about artificial intelligence, which, if there were ever a buzzy word or phrase, it feels like it's succeeded all rational expectations already when you look at what's capable of investing, also at the companies that are obviously becoming increasingly involved and invested in this space. Is there a moment that any of this looks like value or is it just all speculation and growth stiff.
I mean, there's a couple sides to AI.
There's there's like the market impact of it, and there's kind of what's going on behind the scenes. So we're starting to play with it in terms of, you know, it can be useful in value, in terms of maybe you actually constructing value strategies. You know, for us, with our bias is value is value investors. You know, it's hard for us to see like those types.
It's hard for us to invest in those types of companies.
And you know, the thing about growth too, and especially early stage growth, is quant strategies do not work well at all because you most of if you look at the AI type compmpanies right now, most of them will not do well. The basket of them probably will not do well, but there'll be just some outrageous, massive winners in there. And that's where the growth people, the people that are good at growth investing, the venture guys, the growth investors, they do a really good job of being
able to figure out what those companies are like. We can't apply a quant screen right now to those types of companies and say here are going to be the winners.
It just doesn't work.
So we don't exist that much in that space because our types of quant strategies don't work very well there.
Just from an investment standpoint, there are some I mean, we don't do any of this, but Doug Clinton over at deep Water, he's Gene Munster's partner. They're building these and tracking these indexes, broad based market indexes that are waiting companies based on sort of looking at their I guess fundamentals through the lens of AI and then trying to let the AI create sort of the better index versus market cap weighted And I think they started tracking
that at some point last year. So obviously they've got along ways to go in terms of when the performance becomes meaningful. But you know, you're starting to see some strategies be created using using AI. The only thing that I wonder with that is, you know, if you feed chat, GPT or some AI engine, I don't know, thirty years of fundamental data and ask it to create a strategy and you get this like great back test, It's like, well, is that just maybe a big exercise and just data
mining and doesn't make sense? And is it likely to work going forward, but they're starting to in the academic world. There's been some research where some of the academics we've actually had in our podcasts are finding things using AI and machine learning. And it's almost like the mindset is it almost doesn't matter why it works. The fact that
it works is it works. And so it's kind of a weird thing, like we tend to be grounded in like first principles and why value investing should work, or why growth at reasonable price investing, or why quality companies should compound and over time, but the AI is kind of bringing us a little bit in a different direction.
Real quick about you guys have small value. You guys are the quants, and I'm friends with the quants. I met you Justin at West Gray's Marines March for the Fallen, which, by the way, this guy Justin is iron Man. Like there's a lot of iron Man in the quant world. They love to work out. This guy's like the top guy. I think he did the race like in half the time I did, or something like that. You still do you do Ironman?
Run? Still?
No, I'm just just just a runner and rocking when I can. I have I didn't do Wes's I didn't do the marsh for the fallen last year. It's it's tough, that's that's pretty brutal, but it's it's so good and it's so good to get out there and just work hard, and I.
Was impressed by you. Okay, so these quants. I have a theory that part of the other thing going on with the quant world is that you've got the ETFs coming out from themes and even track metrics, so metrics specific. So for example, the free cash flow yield ETF, CAF and cows have gotten billions. I mean, the flows into
these are ridiculous. They tend to lean value. Then you've got something like natural resources ETFs, which is now the biggest thematic category you open up the hood, it's largely value. What do you think of this idea that just sort of slapping on different names to ETFs actually is maybe part of how to sell value going forward, as opposed to just calling it value.
I mean that sort of makes sense to me because I mean I think people those themes and ideas and narratives, you know, can make it more understandable, maybe make it more sellable. You kind of get off the value train, and it's more like, Okay, we're going to look to capitalize on this theme in the market or trend. I could certainly see that for sure.
There's just so many You've seen so many ETFs with like small cap value or whatever in their name. It probably is good to try something different because going back to our own experience, like and you compared us to Kathy would before, it wasn't just the performance that she did better than us. She is master of marketing. The stuff she talks about for the future and the fifty percent GDP growth and all that stuff. I mean, she is really really good at that, and you know we're
not as good. So you know that that is something we probably could have figured out. Is maybe if we had wrapped it, if we had named it differently, or we'd wrapped it in a different way, maybe it would have done better.
Yeah, we joke on the team sometimes they just have these companies that make money or stuff you really need in life, just you know, because her stuff is all like you know, electronic and robots and I don't know, just like getting back to basics, you know, Joel, like that just seemed to and that actually worked In twenty twenty one for a little bit, right, some of the those names actually became popular companies that had a lot
of cash. It all of a sudden became like fundamentals matter for a brief moment there.
Well, I'm just curious, do you ever think that you'll do an ETF again or was this a one and done and stick to SMAs from now on.
I think it's I think it's unlikely. It would be my answer to it.
I just think it's a tough I mean, if we ever have a ton of success in the business, then we want to try it again. Maybe, But it's just going back to what I said before. It's just a really really tough space right now, and it is. There are people like say Simplify as an example, there are people who are finding things that are white space, things that are very different than anybody else is offering. But for us in the quant space, whether it's quant value or quant momentum, I mean, there.
Are some really really great cheap funds.
Also, if you look at something like q val, which you mentioned before, when we started, qu vow's fee was probably twice what it is now. So just to show how much fees have compressed. So even if we had a great idea, it would be very hard to execute it. From the perspective, we'd probably start with a break even that was double than what our break even was when we did the first time.
All right, Jack fourhand, justin Garbload. Thank you so much for joining us on Trillions.
Thank you for having us.
Thanks guys, 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'd like to listen. We'd love to hear from you. We're on Twitter, I'm at Joel Webber Show.
He's at Eric Baltunas.
This episode of Trillions was produced by Magnus Hendrickson. Bye.