The ETF Era Is Going to Be Here for a While

A lot of outlooks coming out in November, smoothing in October. We put out ours out in December, and we look, We look at the year that just happened, obviously, and then we sort of forecast forward what we think and just cope with an overall theme. Our overall theme this year was that the era of the e t F will be here for a while, and largely because of the flows. The volume and the number of launches were just so high and extraordinary for the market being completely decimated.

Both stocks and bonds had one of the worst years ever. You would think that would put a suppressive force on most of those things, but they almost reached records of everything again. So you have a crystal ball and you look into it and tell me that E t f s are gonna keep getting bigger. Yeah. Absolutely. I mean we always had this phrase on the team that we've used in fact our twenty twenty one outlook, I think was bowl markets are good for ets, but bear markets

are even better, and we were right. This year showed exactly that. So but I actually stunned at how much they both the launches and the flows in particular, uh, almost six billion dollars and flows I would have guessed lower. I would have guessed more like three four and mutual funds almost a trillion, and outflows. So this shift to e t f s and passive has expedited in this kind of brutal environment. So I don't know, I feel justified. I'm glad I voted my career to this stuff because

it's it's definitely growing. It's the vehicle of the century. Okay, So who's gonna be joining us? And how are we gonna structure this one? So we have the whole team here. I think this might be the first time everybody is here. We might have done what this once before. So you've got Athanasio, Sara Fagus, and James Seffert who are both here in the studio with us, who are on regularly. We've got Henry jim Over in Europe and Rebecca Soon in Hong Kong. And Henry leads up Europe, Rebecca leads

up Asia. And so everybody's going to give their two cents from where they sit this time on Trillions, the twenty three outlook, Henry, Rebecca, Athanasios, James. Welcome back to Trillions, Henry, first time, welcome, Hello, How are you doing? Before we hear from everybody? Eric, you want to tell us how great you are? That wasn't how I asked you to set me up. Okay, fine, listen, Um, we've been right a lot. I gotta be honest, like our calls have

been pretty good. One thing about outlooks that I find frustrating on the cell side is they tann't tend to just repackage the past with the future tents, and what happens is the future tends to change. So they're wrong a lot. Honestly, We've made a lot of calls that were against the grain, and I just want to take a victory lap here I'm sorry. Now I will go over the ones we got wrong. We have a couple

wrong too, but here's the ones we got right. Over the past two years, ARC would hang tough, called it got it right. They've seen influence. This year, the SEC would approve a bitcoin futures et F and pro Shares would be the first out with it. This was all James, He nailed it. We picked up a lot of crypto people because we were the most aggressive on that call, and it both turned out to be correct. We Um also said bear markets would expedite the e t F

and passive move. UM yours truly said an inverse Jim Kramer et F would be filed, and it was um. We thought that mutual fund to et F conversions would grow quickly, and they have. They're actually getting Uh. Fidelity just jumped in that that call is not totally right yet, but it's in the right direction. Um. And when March, when the bond sell off and the and everything was really going bad and bondy TF showed like discounts and stuff, I said, listen, bond ETFs are gonna double in assets

over the next three years. And I said that rate in the dark of the night before the FED even came in. They're almost there. It's still we got a year ago, but there are two thirds of that asset level. Bond ETFs crushed it this year in terms of flows. Um, big passive fund companies should democratize their voting. They should decentralize it. They did. Vanguard, Fidelity, and Schwab all announced plans. E s G would confuse people and then struggle to

break two to three percent market share. I was probably the most aggressive and negative on this, but they are. I mean, they haven't seen any flows this year. Even black Rock sold out the e s G funderal model. They'll exist. I just don't think they're gonna grow beyond I guess that one's not quite done yet. And then I said two would be the last crypto super Bowl.

Now I said it because I thought they might approve a spot et F and that would pull people off the exchanges and make them lower their fees for trading. I didn't say it because I thought there would be some big scandal with f t X. But I think that is going to be the last curve of surouable. So indirectly got that one. Something we got wrong. We thought hold on, let's just okay, let's just take a moment, okay,

and just saver as long as you can save. He that, but that's also you know, let's hear about the ones that you you missed, all right, um, Ethan and I in particular, we thought multi factor et s would take over Smart Beta. That's when you put all the factors together. Uh. Turns out people like their factors severally, but you know, multi factors there, they got a legit like niche, but they definitely didn't. They're not going to take over UM.

I think it's interesting in e t F land sometimes when they when they merge, when they put too much together, like you want. I know, Joel, you've been asking about this everything e t F. I think sometimes that doesn't actually work. People actually like the pieces sometimes more than everything together. And that's I think the case here. We also thought that the JP Morgan and Goldman like SMP five hundred knockoff ETFs would get bigger and JP would pull out of SPY and IVV and put it in

their own e t F s, and they haven't. The SNP five under brand name is more powerful than we thought. UM. And then fixed income smart bait, and we thought this would be a much bigger deal by now it's really it's still pretty small. I think it's fifty sixty billion equity. Smart Bait is one trillion. So there's a whole disconnect there and it just hasn't grown like we thought. James, do we miss anything. Yeah, there's one that I got

to call myself out on. I thought we'd have an ethereum future zt F two based on the fact that we got bitcoin futures and feed different things. But that has not happened. Um, so we got I got that one wrong me personally. All right, congratulations on being great. Listen, I'm sure you could do the same thing with Business Week articles. I know. So this is my version of that. Let me have it in my life here and and we roll the dice on these takes. Sometimes we put

ourselves out on a limb. We'd don't we don't play it safe. We are in our your head issue. The thing that we got right was the weak link in crypto was going to be the brokerages, and that's it was a broadway. We didn't say FTX specifically, but listen, let's pet each other on the back right now, go all right, Ethanasios, let's talk about what's your number one man? Well, I'll start grim Um. I think closures are going to pick up. We did the episode on the graveyard. I

think a couple on Halloween. Uh. There's two parts of the equation, obviously, launches and closures. I don't see launches slowing down. It was a you know, despite the market being tough, launches still came in pretty strong this year. You had last year, you had a lot of crazy stuff coming to the market. I actually think that other

part of the equation is going to pick up. I think people threw a lot of product out that's not gonna you know, you need a bowl market, and I don't think we're gonna have that next year, or you know, it might be a tough from market. So I think we're gonna see closures start to pick up on people or issue or start to clean up their lineups. So do you think more closures than than this year? Uh? Yeah, I don't. I mean this year was higher than last year.

I think it will be pretty high. I could probably is just another call we have to pat ourselves in the back. Next year, I think we could be a really rough year. For closures. Okay, I guess we're starting off on a bad note. Henry, first time on trillions number one. Sure, I don't know if there's a whow you, but what's allowing me is um active ETS. I think Active is going to be uh continue their rocket tractory in the US and the Europe. In Europe were falling

close behind two reasons. One, I think investors in the US are starting to look beyond the structure and looking at the strategy itself, so don't really care if it's active or index anymore. In Europe, I don't think we've actually finished the consolidating the ETS story. Um, so before you can talk about active ETS, we have to get the ETS story down first. However, people are still gravitiing

tourist Active. Yeah, it's interesting. Um semi transparent or non transparent Active just total flop another call we got right, I should have put that on the list. Oh my god, Sorry, I'm annoying every listener right now. They're like, all right, dude, it's just the patent the back show. We'll have a roast next time. Okay. Uh, my other shoulder, but transparent Active doing great Capital group came in transparent. They got like five or six billion fidelity. Like there's a lot

of the transparent Active is doing just fine. I mean Active is really I think carving out a nice niche, right, Tom, Yeah, I think going back to your other there's another patent the back, but the Cathy would call I think her being transparent and her having that success might even kill

that narrative that you need to be non transparent to succeed. Yeah, and so I think I think the non transparent Active is probably gonna slowly it lives in a very very small niche, if not just go away eventually, and transparency will will be how they do active. I think what's what we're seeing though, also with the adoption of active is a lot of intermediary not intermangors like I ra

A S are coming in. We have white labels are trying to start out their own et S shops and launching their active strategies because there's no more stigma if there ever were on active ets. So they're just bringing out there there there either they're trying improving strategies to act to space or the strategies that weren't working out that well, they're putting it into the et F wrapper to try them out, so I'm gonna see how big

growth there. I do have one variation on this active call, which is I think that you're going to see um big legacy companies like Franklin Templeton Fidelity. At least, this is what I would do. I will come out with my best ideas funds, a concentrated portfolio, just twenty five stocks like Cathy would style, but it's the best ideas of your whole brain trust and make that a separate et F and then just keep your mutual funds because

they're good cash cows right now, or convert them. But then I think that a concentrated active fund fits well on our otherwise boring beta core allah Cathey would and I think she showed that. So I think we might see legacy sort of archives itself a little and come out with these best idea funds. That's just my call, but you know, we'll see. Yeah, we's gonna have calls. Do I'm only like, I'm only batting eight fifty, But we'll see, we'll see, we'll see. Okay, James, what's your

number one? Yeah, So I'm gonna actually look a little bit beyond here. A tad But so I mean, first start by saying when I talk about mutual funds and everything, I'm about to say, I'm excluding money market funds. We don't really we don't consider them to be the same type of situation when you're looking at ets first, mutual funds um But so the one that is, we think that passive could pass active and assets for ets and mutual funds by the end of three Right now, the

trend is accelerated. Eric mentioned earlier, it actually has slowed down in some furrors of the market. So one of the reasons why passive tends to overtake or pass gain market share and active during bear markets it is because active has historically been so much larger. So if you're a tent trall and you go down ten percent, that's a lot more money that's going down if E t F s are half or less than half that size,

So the bear market really hurts. You see outflows on top of that, and then E t F really gained market share. But what's happened now on the equity side of things, there's passive equity assets are larger than active equity assets, and the mutual fund ETF space combined, so the exact opposite is happening. That said, we're still seeing enough growth in the ETF to overcome that that that lead that PASSI have had. So passive should be losing more money than active in this bear market, but they're

not because so much money is pouring out. So because of that, we think the trend is going to be. It could happen by December. That's next year. I think it's definitely going to happen by We would need a massive regime shift of the last fifteen to twenty years for that not to be the case. What percent of the funds market is passive when it comes to equity, Uh, it's so it's about okay, what about fixed than um fixed income it's a it's about third. It's in the

mid thirties. And what this is, what's total total? It's about So that you're saying that's going to go to fifty one or fifty point one at the end of next year, theoretically by December three, I think could happen. It's going I would bet a lot of like you would be you would I would be very confident that's gonna happen. In Now, let's shift to mutual fund to e t F that's a whole another like sort of war.

We're looking at what is that person, what percentage of assets the ETFs have relative to mutual funds, and where do you see that going? Yeah, so again x money markets, because there are trillions of dollars in money markets. But we're about so if you take ets mutual funds, et s makeup about and based on the current trajectory and all the stuff we're talking about E t f s democratizing, revolutionizing finance. People still pointing the ts. I think it's

gonna happen by It could happen within five years. So that's a big jump to go from twenty eight to fifty. But at the current rate of change, it's it's not that crazy to put out there. And I think most people listening might actually feel like, I can't believe ETFs only have twenty eight percent end of those assets. But the media has really shifted to covering a t f

s and mutual funds don't get much coverage. We're actually hiring somebody to cover mutual funds because a lot of our clients actually want to read about there's still twenty trillion in them and they've kind of been left behind by the media, but they still have a ton of money, and you know, it's slipping. But this is going to take a long time for this all the playout, but I agree with James, they will become the majority at

some point. Alright, your number two number two one is, you know, beating the SMP is hard right over time, it's just really hard to beat the index. So we looked at this year. Actually a lot of ETFs did better than the SMP five hundred, and it's because it was a violatle market. And so I think next year, if we're gonna be violat again, I think it will be a good opportunity for other et f that'll perform.

Now I get it, not every ETF is supposed to perform the market, but I think when you have a market like we did this year, a lot of stuff like value, energy, active, smart beta, things like that tend to do well. So I'll probably be looking for a lot of the same stuff next year. So more opportunities,

more trading, more ways to beat the market. So I think that's you know, people don't realize not every ETF is just supposed to be like an active strategy or smart beta, A lot of people will trade throughout of them, right, So there's just as many energy ETFs as there are tech ETFs. And energy was really great this year, so I think it will give opportunity to a lot of things that were left for dead to be able to perform next year. So that's something I'd be looking at.

A couple of comments. This is very interesting to me. I think this also speaks to the fact that a lot of smart beta e t f s tend to be designed by people who overweight fundamentals and like stuff that you learned in your cf A class that stuff matters now they don't like, actually designed smart batts to go after nonprofitable tech companies which work clearly for a while, and left all these value funds which use you know, more classic fundamentals like price to earnings ratios and stuff.

They now are kind of working. There what they They were designed with a lot of evidence and now there it's working because the market is value these things that tend to always be valued after the bull market comes down, right,

it is a return a mean version kind of thing. Um. And then to your point of the stuff like if energy does well, you'll probably see a couple more energy ETF launched, and so the product will start to go towards the things that are working value energy materials and then all there there where you're going to see some out performance. Yeah. I agree. It's like spurs basketball, right, like back to fundamentals. I think that's gonna work next year. Last year was all like aliops and like you know,

and we're going crazy. I think this year it's going to be just back to like most boring basketball. Yeah, you know, pick and rolls, like just basic basic. I'd like that metaphor that it works, Henry, Let's here what else you got for Europe. For Europe, my synkoll is actually fixed income products UM. This last month for example, bad massive flows UM back into e tps in general and have the flows were into fixed income whereas they

only make up total assets. So in terms of fixing income, my cul for next year is going to be fixing in products for income generation and UH for combating inflation. So that could be fixed for inflation, actually could be fixed income, or it could be hard assets. So I keep an eye out also for UM for like gold bullion and other medals funds UM. There's a lot of cryptocurrency e tps here in Europe, and I think um

some investors saw it as a store of value. Given the current situation, I think we'll see some people um flowing out of the cryptocurrency TVs and back into a gold bullion or other metals. Inflation and Income m E t p s are mar caul for next year. Yeah, so piggybacking on what Henry said here in the US, we've fixed active fixed incommutual funds have It's been a it's been a little bud blood bath so far in two they've seen hundreds of billions of dollars and now

I think we have four hundred billion right now. Yeah, half a trillion. Hold on half a trillion is six times more than any other year of outflows, so it's the record six times over. Yeah, So fixed income has been active fixing. Commutual funds specifically have been crushed. But et f s we've taken in a decent amount of money and fixed income despite this rising rate environment, despite the worst performance virtually ever for fixed income, and the

et f s are still taking in money. So that's that goes into the fact that I talked about equity wasn't gaining as much market share on the passive side of things, but on the fixed income side of things, it's really ramped up. Like we've seen a couple percentage points ramp up in the passive verse active side of things and on the E t F side of things because of this mass outflow from mutual funds and into e t s. At the same time, I think there's

a demographic a shift as well. Here a lot of fixed in commutual funds were bought by boomers when they were young, and their four one case, they're now seventy eight years old. And if the Feds aggressively hiking I if I was a boomer at that age, I might not want to wait around. I might just take I had a good run. It was like thirty year of lowering of rates. I mean it was brilliant. I might just cash out. I also think that the e t F s are used more by institutions and allocators now

to pinpoint what they want right now. Like Tom had a great note on the cash like a TS which now yield four percent. So now you just buy one of these cash like ats. You can buy any exchange gives you four percent yield, you've got some cash you wait to deploy to equities. So I think e t f s are used for their tool purposes, whereas the mutual funds were used a little more for like the whole enchilada. Yeah, we we we we. We've talked on the show about the single stock ets and that potential

growth area which hasn't really panned out. But one area that has panned out is a single bond ets, the one from FM Acceleration. They have hundreds of millions of dollars they just launched this year, and they're targeting specific on the run rolling of treasuries, which basically allows you if you if you watch Bloomberg TV or CNBC, they

talk about specific points on the curve. These e t f s allow you to actually target those exact things that economists are talking about, and they're seeing significant uptick. People want to invest in these things, these on the run good treasuries. Yeah, and this brings up a point people are like, oh my god, single stock ETF, single bond ETFs, like this is ridiculous. Like but here's the thing that people always underestimated about ETFs is convenience. Consumers

love convenience. Make it easy. They will come, people will buy that. It's a pain to go out and short Teslas. So there's an inverse Tesla. Just hit click you O, you're on that. That trade is now on. Or it's a pain to go buy the treasury. Now you just buy this thing. It trades on exchange. Like Microsoft, you now own this one bond. So I think that is going to happen, the single stock, single bond, and even you know who knows single commodity, we're gonna see a

move into this area. That's said with the single stock, I do think it's going to be more limited than people think. This whole spaghetti at the wall, nobody needs single stock viser like inverse viser. It's probably gonna have like six or seven stocks that people care about. Obviously,

Tesla's the first example could be meta. If it starts to get volatile, there could be flavor of the month that comes in and out and they single stock it um and then you're gonna see a single stock where they're gonna call options on it like Tesla covered call ETF. So I think securities like Tesla and Arc are gonna have these ecosystems built around them where there's multiple ets that do trades around the stock, but then these outer layer stocks I think will die. Like I don't think

we need a g E one point five times. I mean, I think nobody's gonna buy that thoughts. I agree with pretty much everything you just said. Yeah, I agree. I think it would be concentrated in just a few names. I think the cover called the E T s are a good example of these um of income ets because people still want their exposure the equities also want a

bit of income. I think you can also look at UM the defined outcome ets like innovator ets, where they're talking to the same um population which you addressed UM the boomers. They still want exposure to the overall equity markets, but they are afraid of it collapsing, so they have a cap. They have a buffer on the bottom line. What you're giving up though is a bit on the upside. But they're okay because they've already invest their money over their lifetime, so they have all these game A minutes

want to lose anymore. Yeah, we don't see these products in Europe, so that's why I'm still calling for fixed income products to grow in Europe as a proxy for income genitoring ETFs like we have in the States, and a lot of what we just mentioned requires derivatives, which is a lot of people think of it's a dirty word.

But what we're finding the e t F rule made it a little more liberal to use derivatives, and what we're finding is it it's not being used to go crazy with levera journey thing, but it's used to sculpt outcomes. Derivatives can really fine tune the outcome of of a strategy, and they're being used brilliantly by many companies UM, and I think will continue to see that where UM people will package up the derivatives plus some equities in a certain way to get you exactly what you want in

an outcome. Rebecca, welcome back to trillions. I know that China is on your mind, tell us more so. The reason why China is on my mind is I expect China to rebound in. To put it into perspective for everyone, China has been in lockdown for almost three years now, and so what this means is people have not been able to leave their house. If they got COVID, they

would be sent to a mass quarantine center. So think of squid game, big concentration camp with people, and people have not been able to move freely between the cities, and so at one point all the cities were locked down where people couldn't even leave their house for an extended period and the government was sending food to all of the homes. And so all of a sudden, after three years of being locked down, people are now reopening and allowed to move again. So this is going to

be a huge impact on the economy. As people begin to shop more, leave their house, they will be traveling amongst the cities, and so this will have huge impact on the economy. To put into perspective, China is the second largest assets under management for ETS in Asia Pacific. They own roughly of the market, and so as China reopens next year, we're going to see a huge impact not only on the economy but also on E T S and so tech outlook is looking positive, Ali Baba

ton Cent. You know, we expect the consumer sectors and the consumer discretion to be one of the areas that are going to grow significantly. If there were a ticker that I wanted to watch, what's the one to watch? So tickers in China are random numbers that Eric always makes fun of. Yeah, look, listen, I have the pounds on this. As you go from the US to China, like across Europe, it goes from unbridled capitalism to pure communism.

It goes from like dude and like hack and move right, and then in Europe they're like there's a couple words, but a lot of times look like license plates. It's like l G nine. And then you get to China the tickers like five one, five, three four. Then the next stickers five one, yeah, and it's like, oh my god, like, how do you even know what's going on with the tickers there? It's I don't even know what's happening. I look at these tickers and it's so confusing. It defeats

the purpose of a ticker. Well, we just had a new one launched here in Europe with ticker f you w fifty, So we're not we're not too bad, but I guarantee that was by accident plate that went bad. So in Hong Kong, you can make a charitable donation to the Hong Kong Exchange and then you can select the random numbers and so instead of having you know, you have like I said, you can tickers. Yeah, So,

for instance, in Hong Kong, a lucky numbers eight. So if you want the number eight as part of your ticker, you can make a charitable donation of one million Hong Kong dollars and you'll be able to select your tickers from a list. But so for instance, for instance, in Asia, people don't like the number four, and so if your ticker has the number four in it, no one's going to buy it because it's unlucky. So we did make sure you get the right numbers communism versus thanctually. Okay, James,

you're another one for us. Yeah. Um, we did do just an entire episode and essentially this, But I'm gonna have a big spot bitcoin etf um, Eric and I are on the record last year calling for likely Q three Q four that we get a spot bitcoin E tf um didn't happen. Well, no, no coming, so we we we aren't wrong yet, but we could. This could

be on the things that we got wrong list. And my my call is that unless we get some sort of legislation from Congress, there's some giving the SEC more regulatory power, or the SEC just starts taking regulatory power that they might not have. Right now, we're not going to see a spot bitcoin EDF. So last year coming to my side, yeah, I think it's what this is. Well, there's a there was a lot of talk in Congress.

There was multiple bills for stable coins, for different ways to do regulate crypto, and we just everything is kind of the talking is kind of slowed. There were also a few different areas that honest actually f t X was doing some things that could have helped make more regulated spot markets. Um so unless theoretically, if an exchange voluntarily comes under and registers as an exchange with SEC,

maybe then we could get one. But I think we're gonna need an Act of Congress literally before we get a spot bitcoin et F. And now just to pivot to that because on in our database we consider cryptocurrency and alternative, even though you could argue it's too correlated for that, but anyway, it's an alternative alternatives in general. Though obviously had this big year last year DBMF broke out. It was like sort of ARC, not as big, but an indie star that broke out billion dollars. I know

you have your bullish on alts. I am too. I don't know, they'll be like as big as I don't know. I'm bullish relative to the sercise. Now they have five billion, I can easily see them getting billion. I don't know about three billion. What do you think Let's talk about the alt side and why would that? Why do you think alts will grow? Yeah, so I'm aent with you. The problem with alts is like, right now, the market has already tanked a decent amount. Right, So the benefit

of altars you have a diversified portfolio. So if you were invested in them and then the market went down, you had an alt that was actually uncorrelated to fixed income or equas, like as we talked about DBMF, which is now basically a billion dollar fund because it did exactly that. UM. So these altar are the whole point of them is the verse fire your portfolio, maybe reduce volatility and give you similar returns or higher risk adjusted

performance like a sharp ratio type type of situation. But for the most part, investors still aren't biting as much as like we expect that. I feel like every year we're like, Okay, this could be the year for alternatives UM and it just hasn't been Now, granted, there was a very good year last year for alternatives UM so hopefully maybe advisors are taking more note. The other thing is the alternatives they were often very highly priced and didn't actually do what they said they were going to do.

Where now we've seen some of these managed futures et F, some of these other alternative products that are actually doing what they said they're gonna do, and they're not charging a hundred basis points or whatever it may be. And even if they are charging that, some of them are doing what they said they're gonna do, giving you good sharp sharp ratio performance. And you're getting more people from the actual hedge fund world coming in and doing their thing in the E t F rapp or not an

E t F company doing a half alt kind of thing. Yeah, exactly. Yeah, I still think that's gonna be a tough story to sell. I mean, DBMF, they they've they've filed UM or I think about the launch a mutual fund here based on the same strategy here in europs are based on the same strategy. But it's gonna be a tough story. I mean,

I remember when else on the product side. UM two, you're you're either selling um um product in one or two sent since the cash woman's attention, their imagination vers just having to spend you know, a good ten to fifteen minutes. I mean, just from a time resource perspective, as well as the the salesperson's time, it's it's it's gonna be a hard sell. That said, the sixty and the forty went down this year. Everybody thought the forty

was supposed to offset the sixty. If that continues, if the sixty and the forty continue to be correlated, I think all value goes up because then it's at least something that would offset the sixty and the forty. That I think is why I would slightly disagree with what you're saying. But that said, I still all this will be very small relative to big beta and and in our cat in the way we look at things in our systems. Some of stuff Henry was talking about, like

cover called income ets. A lot of people would consider those also to be like alternatives because they tend to smooth out the returns. You lose some of the upside, but you also limit your downside when you do stuff like that. So if you include those into the alternatives, the space is much bigger. But the true hedge fund type strategies, Um, there's only a handful that are of of any significant size. And I'm not sure I'm gonna we need to see more people come into space. Maybe

fees get lower. Then advisors who really are looking for some alternative to just the sixty, maybe they'll come in. But I'm with you, I don't think we get to a couple hundred billion in assets. I don't think that's going to happen in this space. About two years ago, I said, we need a rock star like Cliff Fastness or a Vanguard. Vanguard does have a market neutral mutual fund that charges like twenty basis points. Needs to get rock star or cheap like. It needs to be Cathy

Wood or vanguarded that category. And it's yet to really have that. Andrew Beers turning into a little bit of a rock star, but he came from the indie world. But a Cliff Fastness or a Vanger coming in would definitely jump start flows. I think anything else, Yeah, just one last thing that I just keep thinking about and comes up and and I can't rid of it. Is this the cultural wars have like came into the E T f LD like we used to just do our E t F thing, and I think politics will be

over here. But after E s G came out and then the the E s G reaction and now you've got you know, strive and anti E s G and um, it's really brought the political realm into the E t F realm. And then the voting right Florida just said they're not going to invest in black Rock because they talk E s G too much. And that's become an interesting part of our job now is trying to, I don't know, walk around this without taking making political stances

and trying to treat both sides fairly. But I don't know. It's a little unfortunate, but it is here to stay. I don't see this going away. I think everything has

become political politicized, including E t F somehow. I mean, aside from the political thing, I think anything that could be E t F I will try to be E t F. I s whether it's I think it's just they've made it so easy, so I think things might get a little crazy, not just outside the political But that is a good point that the more the core of the portfolio gets boring and the more passive was Ironically, the crazier E t F launches are going to get

because they're going to compete for that of your portfolio where you're looking for fun stuff, vaultile stuff, narratives just foam cure your fomo a little bit. So ironically passives rise had less to crazier E t F launches. Yeah, I mean Will Hershey over Aroundhill is a good example

of this. He's launching a suite of products that are basically taking advantage of the same way that we have single stock ETFs, except he's doing like very small, like concentrated like ten stock or less portfolios on certain themes. So again making that way more concentrated active side of your portfolio. And I'm with them both. I think that's exactly what's gonna happen. Yeah, we're bullish. Hot sauce. Hot sauce is here to stay. It might get hotter hot

the hot sauce will get hotter. James, Henry, Rebecca Eric thanks for joining us on Trillions. Thanks for having me. It's great to be on the show. Thanks for having me. Look forward to seeing everyone in Thanks for listening to Trillions. Until next time you can find us on the Bloomberg Terminal, Bloomberg dot com, Apple podcasts, 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 Falcuna's.

This episode of Trillions was produced by Magnus DRIs Bye