Your ETF Guide to the Trade War

to say the least. So trade wars. Don't rest for your vacation. I guess no, I have to. I have to call to talk to you about how investors are dealing with this trade war. It's become the theme of the year. Yeah, that rising rates. Although rates have kind of flat flatlined a little bit. Um rates are boring compared to trade wars. They are, and that's why. But they have moved a lot of flows. But I will say, if there's one sort of macro event, it's it's trade wars,

trade tensions. Although let's face it, some of it's probably an overreaction in the headlines and from the media, and I think this is a great opportunity to not only look at something that's happening in real life, talk about how investors are reacting to it or how they should or should not react, and trying to parse out what really matters versus what's sort of like the crazy outrage of the week. And there's no better time to do this because obviously things have shifted from being rhetoric to

reality now and we're looking at full on tariffs. So to help us understand the trade war, we're joined by two guests, Sarah Ponzick, who's on the Cross Asset team here at Bloomberg News, and also John Davy, who's a portfolio advisor at Astoria. They're both going to give us different views on what's happening and also sort of like

how investors are dealing with it. Yeah, I mean I suggest that both of them, because Sarah wrote this article basically your eid to playing the trade war, and it goes over a couple of different things that she's seeing. Sarah talks to people, she looks at the data, and she writes about it. She can tell us what she's

seeing and hearing. John literally is putting people's money to work using e t f s, and he has to read what Sarah writes and other people and look at the news and the twitters and and everything and take it all into and decide what to do with real money on the line. John has skin in the game, so we have the best of both worlds in my on this episode of Trilliance, Your Guide to the Trade War, Sarah, John, Welcome to Trilliance. Thanks for joining us, Thanks for having me,

Thanks for having us. Uh Sarah, you wrote this article that was really really great and Investor's guide to managing escalating global trade tensions, so it's a great Bloomberg News headline too. Can you give us a sense of of what you've been covering and what you've been watching unfold. Of course, it's kind of been an evolution in a way,

as you were just discussing. At first it seemed it was just rhetoric, but now we're actually getting these tariffs, so day by day, week by week, it's really starting to feel a bit more real. So I have been talking with money managers for the past couple of months as this really has been developing, to see what they're doing if they're concerned if they're actually moving money around. And for a while, that answer was always no. The answer was always no, we're going to reach a negotiation,

we're going to get a deal. We're standing pat We're really not doing anything differently right now. But as the weeks went on, as as we got further down the timeline, all of a sudden, concern started to seep into their tones of voices, and all of a sudden they started advising, Okay, well, if it gets a little further, this is what you

should do. This is what you should do. And then we actually started to see some movement within the flows and some people actually telling me that they're moving money around. So I would say it started off when I would ask them, all right, if this actually develops, if this actually gets pretty bad, what are you gonna do? But classic answer was always all right, go to small cap stocks because they're more domestically oriented. For in a trade war, the U s stands to benefit, so you're better off

if you're in the US. So make America grade again. What does that look like from a flow perspective and a return perspective? So far this year, so from a flow perspective, it's actually interesting because one of the largest small kept et s. I know. Bloomberg Intelligence had a great deck out recently about this, saying that there were actually outflows from small caps e T s UH in the past week or so. However, it was still a

lot less than US equities at large. And if you look at the Russell two thousand, I mean, the Russell two thousand has just been on a tear this year. It's really been outperforming the SMP five hundred and broader equity markets at large. So we are seeing that, I mean, we're seeing small caps outperformed, and we are seeing a little boost there being a little better uh than larger

US equity flows. The rustles like an eight percent return so far this year versus the SMP, which is at about two exactly smps like muddling around, moving sideways around that number. And then Russell two thousands up eight percent, So really seeing some strength there relatively. So that's where they're going. Eric. When you look at the small cap stuff, how are you saying? What are you saying? Ironically, small caps appear somewhat like a safe move normally they're the

jumpier ones. But what I will say is in the second quarter it was unusual that small caps took in thirteen billion, that was more than double any other cap size. And the note that Sarah's referring to was that for the first time in a long time, they saw a week of outflows. And so the question remains is if small caps are If small caps stopped getting investors interest

and attention, it's not good. That's an overall bad sign because they've been the one sort of equity area to a be bullish, but be also play that protect from the trade war quote unquote. UM So let's bring in John on this talking small caps. Let's say you're out there, you own a small cap eat after you're thinking about going into it, how would you look at this area going forward? Well, I think so if you own small caps, I think that's a pretty good place, you know, for

the time being. Um but I'm going to take the other side of that trade about how trade wars is the reason why the market's hell him off. Trade wars is not what's driving the market that. That's my point, and that's what we've been arguing, is that you've got things like you know, the ft ist hiking rates, You've got you know, no more qui in the US, uh and soon to be stopping in Europe. You've got global growth, that's the couple in right. US is up, you know,

as you said Russell two thousands up eight percent. You've got China that's down e M that's you know down, you know, fourteen percent year to date. So I think, you know, like if you watch the news, you're always going to be scared, You're never gonna want to invest. I think small caps is a good place to kind of, you know, park your money just because you know, I think a lot of Trump's policies is beneficial for domestic

orienting companies. But for us at Astoria, we've been the pensively positioned in the portfolio for most of this year. This was a big call that we made earlier in the year, uh well at the start of the year. So our premise was that, you know, we expected this year to have a lot more volatility. We thought that, you know, there was a lot more uncertanty this year with what the Fed is going to do, so we've been more defensive in general. So if you own small caps,

I think that's a good trade for you. I think it's been a good investment, and I would I would probably hold on to them. And let me jump in here back to Sarah. In terms of the small cap btfs, if you noticed I j r Is in the top ten, that's most people know small caps I w M which is the I shares the most traded one, or VB which is Vanguard, but I j r Is number nine. To talk about within the small cap space, what what

kind of ets are seeing the action? So the e t s that are seeing the action are the ones that are actually being used as more sort of a trading vehicle. So if you want to get into the action, I mean, we're seeing heavy trading falling. We're seeing people wanting to get in and get out, maybe make some some quick moves using these e t s. And that's really how we're saying it play out there. So I w M clearly takes the monster of the flow volatility,

that's the one that's been around forever. But it's the fee is I believe twenty basis points I'll find out in two seconds here. But John, in terms of picking a small cap ETF, if you're out there listening like how do you actually do this? I w MS twenty bits and then you've got ones that are ten and

even a little less. Do you prefer going to the sort of cheap, low cost Vanguard or I shares Core series, or do you like the liquidity of an I w M. We I would prefer something like in E E S or in I j R. So those are more Yes. This is why. Look these E t F strategists, they sniff through the whole toolback. That's that's why we have them on. I don't even know what E S is.

That's the Wisdentry earnings weighted e t F. So basically, first of all, they take like a quality filter, so you have to have like four quarters of like positive earnings, and then they wait the stock in the index based on its earnings. So the more earnings you produce as a company, the higher the weight. So it's like a super higher quality e t F. If you go back, you you probably have a terminal up. But if you go back E S has completely killed I w M

since its inception. And you know my point is like, okay, E yes, may coos to your thirty five basis points. I w M is maybe you know fifteen, but I'm sure if you look, I don't know what this is. Yeah, E S is up two to I w M sixty four. That's seventy eight percentage points difference. It is a little pricier, but it's not bad, especially when you're comparing to an

active fund. It's thirty eight basis points. But you're right, it's small caps, but with a little of the edge taken off and a little tilt towards that's like a toy at the bottom of the cereal box, cracker jack box. Are we that old that we remember that I do it? Okay, okay, okay, good, all right. Quality usually works over time as like you know, as a factor, and we don't have to go into like a factor based discussion. But I think people get enamored about low costs, and you know, they want to

buy the cheapest product out there. And I think you got to look underneath the hut a little bit when it comes eat just because there's so many products out there. So E S is one of those like hidden gems if you like small caps, and that's a good point. I mean thirty eight to twenty or ten, that's eighteen basis points. If you had picked E S, though, that's seventy seventy eight hundred basis points, So I agree with you.

I think though, when you go pure, sort of plain vanilla like the smp F have injured, you really should look for the lowest cost. But when you go to these other areas, you can possibly do your homework a little and find a hidden gem. Absolutely, Okay, Sarah, what's the what's the number two thing that you um focused

on in this article? So a lot of people started talking about if you're worried, get defensive, and John was talking about how maybe not even just because of trade, but they were starting to shift to a more defensive position at the are to the year for even other reasons. But when they talk about defensive equities, a lot of them say, all right, well you look for your toothpaste and your diaper companies because it's something bad, worred to happen.

At least you know that people always need those types of products, so go to your consumer staples. And for me, I did. I. Well, I was curious because it seems like there was a shift in tone when we got to June, so I was really curious what the flows looked like in June versus the rest of the year, and we definitely saw a major shift. So if you look at XLP, which is State Streets Consumers Staples sector fund, so x LP actually had the most outflows from January

to May this year. X l P, I mean consumer staples as a whole have really just been struggling. So they saw seven hundred seventy three million dollars in a loss from January to May. However, in June that completely flipped, and if you look at the entire suite of those sector funds, x LP actually took in the most money out of any of them. It saw five hundred eighty three million in inflows in June. So I was just curious.

I was looking through the data, and it did take a bit of time, and I was worried maybe I would not find anything. But I thought it was really interesting that I had noticed that shift in tone from the rest of the year until June, and people were actually starting to say that they were concerned, maybe they were going to shift money around, And what do you know, XLP went from the worst to the best. Flos XLP, by the way, is it really is a boring e t F. I mean Coca Cola, Colgate, pal mall of

walmart Um. In terms of the performance by the way, just so people know, in the past ten years since the financial crisis, basically x LPs trailing Tech or XLK by a hundred percentage points. Tech is over of the SMP five hundred Staples is a mere six eight percent. John, could we see a whole new regime where XLP becomes the stud and xl K lags All the holdens you

mentioned just kind of remind me of Warren Buffett. Just as a total aside um, I think what you're gonna start to see is people kind of getting more defensive in their portfolio given what's going on with all the

kind of macro news. So, um, here's the other thing, right, if you want to market cap weighted index, right or in E t F, you are indirectly you know, long tech, right, because tech is like of the SMP, and you may not know, but you are a tech kind of investor, right, And I think now, given everything that's going on the cycle, you know now is a decent time to kind of get more defensive in in general. As a total aside, you know, one E t F that we moved into this year is q e MM. So we owned I

E m G last year. It's the emergent market ETF. Five stocks drove fifty of the returns, and I in I MG in And this year, you know, we just didn't want to make a big bet on five stocks, you know, five Chinese internet stocks. So this year Q E M M a little bit more defensive, and it's

out performed I m G by like one. It doesn't sound like huge, but you know, you start to kind of get you know, a couple hundred basis points, and it's out performed on lower volatil lo of autility and what were the holdings that that you wanted to access there? The holdings are very similar to I MG just doesn't overwait. So Samsung may not be like five pcent like it is an I m G. You know, I may only

have like a two percent weight. So it's a it's a little bit lower ball um, more defensive, you know, more value and quality stocks. So and John brings up a good point. This is sort of the same concept as E E S applied to emerging markets, in that when you go to emerging markets, most people use what's called the market cap weighted e t F. That's E E M, I MG, the ones you mentioned and a lot of times the top ten holdings can make up

almost half of the portfolio. At least when I look at QWI E m M, the top ten holdings only make up six of the portfolio. That's an underrated field, isn't it percentage of top ten holdings? Yeah? And that also comes down to waiting, and when you look at it the alternative waiting. You could not go the other way though, and have an equal weighting, which gives a little more volve In this case, you have a quality

screen on this um. Even though it's less concentrated. The quality screen takes that edge off, which doesn't make it extra have extra volatility. So it's an interesting pick qu e m M. It's the spider product. It's a multi factor approach to emerging markets. Okay, John, can we just go a little bit more meta about how you as an investor, how you've been dealing with the trade war

as a transition from being rhetoric to reality. Sure, Um, you know, we're longer term investors, so I think you know, Look, Trump's approval ratings keep rallying and keep going up as his trade ruter kind of spikes up. So I don't think he's going to back down. Per Se, I'll caveat by saying, you know, we're not experts in trade wars, so you know, we tend to focus on like data and what's going on in economy, and I think there's some bigger picture issues that are driving the market. So

one is, as I mentioned earlier, the FED is hiking rates. Two, you've had you know, the couple in you know, from US and the rest of the world in terms of global growth. I think inflation's rise in and you know, I think that's really what's driving the market. Like you know, yeah, the media is gonna talk about whatever is hot for that day, but you know there's other big and bigger driving forces that are impact and market. So to answer

your point, Joel, you know we've been increasing cash. So cash I think is a really interesting alternative at this point in time. Right, the two years yielding like you know, two point five percent, so you take on no credit risk, no,

you know, very little duration risk. So I would much rather own like a s h Y. Then let's say like an h y G, like why take on the extra credit risk and the extra duration risk for for HIO credit s h Y, which is an a propro ticker for something that holds one to three ye treasuries. It is shy. It's when you're feeling shy, you go into this thing and s h V. These are making the top ten top twenty flo lists and they're they're boring. Uh. These are ultra short term debt, which is used for cash.

Talk about the amazing inflows into ultra short term debt this year. Look, you say they're boring, but the thing is they're safe. And if you are worried about anything, even if it's a trade war, if you're just worried about where we are in the cycle, maybe that's where you want to park your money. And that's what we're seeing.

We are seeing some major flows into short term debt, and as well as short term debt, we're also seeing some huge inflows into the tenure treasury bond e t f s as well so g o VT, which is the I shares products. It's the largest US treasury bond tracking US treasuries. In June, it took the most cash on record, the most that's ever taken in a month.

It took in about eight hundred seventy million dollars. So we're seeing money into short term debt and then of course the ten uere as well as getting a lot of traction. John As that's g o v T is fifteen basis points. As as an investor, when you say cash, right, a lot of people think of money market fund. Can e t F s like this be used in place of a money market fund and like short ultra short term treasury et F? Are people starting to do that?

I think? So? I mean I think if you look at g Bill, that's been another kind of big inflow um. You know, I think they got like seven million, you know, just in the last you know year. If you look at JP s T that's a short duration fund from J. P. Morgan, they've raised a lot of assets. So, I mean, you know, the thing when when you buy a money market fund is that you know you buy it at NAV. You don't pay bid offer, you don't pay commission cost um.

You know there's no slippage right when you purchase that, Whereas you know when you buy an E t F you know there are extra costs, right. That's the thing that you know, most people don't realize. So in light of you know, the news about Vanguard cutting all e t F. You know the seven GTF. Most people don't aren't aware that, you know, there are extra costs when you purchase an e t F, as I mentioned bid offer,

you know, there's market impact costs. So I think just because people love ets right there like a hot product, and you know, now like the end investors starting to see on TV that a t s are a good product. So I think advisors are increasingly using more things like jps T and g BILL or GOV in place of let's say a money market fund. And just to follow up on the ultra short term deadts, they've taken in

eighteen billion this year. That's organic growth, and that puts them at almost ten percent of all netflows this year. They only make up one percent of the assets, So a huge year for those et f s. And I think going to cash and using a little cash, it's hard to argue with that these other ways of trying to outthink all this, But you know, cash, nothing wrong with that, and that's I think what a lot of

people are coming to the conclusion of. That's the biggest argument. Well, one of the big arguments against equities right is that you know, a lot more volatility, extremely late cycle you've got trade wars fed hiking rates, and so you know, two percent it's not a bad investment anymore. And and John, what percentage have you sort of shifted into cash over the past few months, somewhere between like the five seven

percent range? I mean, you know it was hard to own cash right the last you know, five six years, right because mark kept on going up. Whereas you know now you know a lot more choppier uh markets, Right, so your opportunity costs is uh, you know, it's very different now than it was a couple of years ago when every single year the market was going up. And what do you what do clients come to you asking

about regarding the trade war? What are the long term implications which I think are very very difficult to figure out. Here's the thing, right, everyone thinks they're an expert on trade wars all of a sudden, right, we're certainly not. We're more experts in terms of building a portfolio, doing macwork on research, quantitative research. So we tend to invest where there's like a margin of safety. And that's kind of what we tell investors is like, Okay, we're investing

for the long run. It's very hard to pick to determine what's going to happen in the short term, and you know, trade wars is something that you know is very unknown from a long term perspective. Here's the editing, Joel Right, China owns over a trillion dollars of US government securities. Right, it's about of all outstanding debt. Right. So Trump is playing check in with China. And I think that's a very very you know, very very difficult thing to to figure out, you know, the political posturing

and what's going to happen. So again, given we're not experts in that space, we try and you know, to have very diversified portfolios, increased cash, use alternatives, use gold, and you know that that will help and it has helped smooth out our portfolio volatility. Can you speak a little bit about what it's like to do a portfolio shock test in the midst of all this? What do you what do you look for when you guys do that.

Typically a lot of the software rule will will use will say, Okay, what happened with the current portfolio in a you know, oh a crisis. What happened during you know, shocking interest rates when you know interest rates spiked when let's say Bernanky mentioned that he was going to stop quie. This was back years ago. What happened to the portfolio

when the U S. Treasury debt was downgraded? So you know, our soft world just play take the current portfolio and just kind of identify major draw downs over the last you know, ten fifteen years and say, okay, here's how the portfolio would have done in those instances. And how much of your time is spent looking through the e t s to figure out the e S s and the q e M M s of the world which

are perfect fit for you. You know, That's that's really where I think we have the most value, is like, okay, looking you know under the hood of these e t s, and you do a lot of that is yourself, Eric, You have great research, and you know, look, we're saying to investors, okay, you know it's great. E t s have democratized investments, and they're cheap, and they're basically given to you for free, and now you can trade them

on Vanguard for free. But you know, someone's still got to do their research and figure out, Okay, is ees better than I W M, is q e M better than you know, I m G. And our vantage point is that there are huge differences in those E T F, So portfolio construction is a big value add from from our perspective. When you're looking at potential shocks, does the trade war or the rhetoric factor in at all? Does that come on your radar as a potential shock? Yeah,

that's an interesting question to know. The software doesn't model back in time, Okay, what happened during previous trade wars, because as long as I've been working, I don't really think we've had a trade war of this magnitude. So that's that's a great question. And I think that's why markets are a lot more volatile Joe, is that you know,

this is new right. Markets don't like concernty. So everyone keeps trying to model for okay, what happens in a draw down in two and eight draw down and you know two thousand and obviously, you know, no one kind of thinks about, you know, kind of trade wars and what's happened in history in that respect, especially because I mean the dynamics at play here between emerging markets and China all that stuff is sort of different than all

the other dynamics that we've ever had it is. Yeah, although I do think that you know, the bigger picture that you know, kind of we keep on talking about from from a story's perspective, is that you know, the decline, liquidity, inflation rise in the FED, behind the curve, global growth, the couple, and I mean those are things that have that has happened over time, and that's sort of you know, kind of what we do in terms of like the

portfolio stress testing and seeing, okay, what has happened during other similar periods from that perspective. Okay, So the last thing we want to hit on commodities. Sarah, what what did you learn as you were working on this story? So there's an overarching view and there is sort of an argument here, but there's an overarching view that if a trade war were to really escalate, that could be inflationary. So if we do get inflation, where might you want

to go? And some people say commodities because of prices rise, maybe that's the place you want to be. So a lot of people are saying maybe commodity related equities or commodity related e t s. Sticking with that spider select sector suite of funds XL E very similar in the beginning of the year. Well, for the first couple of months of the year, from January to May, excellently lost about forty four million dollars. However, in June alone it

took in four nine million dollars. And of course there are a lot of other moving parts going on with oil and in the energy space right now. But some people have said that it's maybe somewhere you want to be, but you do also have to be pretty careful because a lot of the back and forth that's going on is hitting soybeans and hitting other areas of the commodity spectrum.

And we've seen tons of trading within d b A, which is the investco dB Agriculture fund, people getting in and out of there trying to figure out where you might want to be related to tariffs. Um so yeah, I mean, in a general sense commodities if if there's inflation, you might want to be there for a bit of protection or to position yourself. But there's a chance that it might be deflationary as well, or right, there's a

bit of an arguing ment there. I think, Uh, overall, most people I speak with talk about it actually being inflationary, but you do hear the other end of it as well, And there's a bit of an argument people saying, well, it could actually be deflationaries. You have to be careful there, which which kind of goes to what John was saying earlier of like, we've never really had a trade war

like this before. You can't model it. Let me just break down a couple of things here, because d B A, So there's three kind of ways to play commodities with E T S. This seems to be clarified. XCEL E, which is mentioned earlier, is equities that are in the commodities business, so that's going to perform a lot like the stock market, but also like oil in that case mixture.

Then there's ones that hold futures like DBA holds agricultural futures that will give you pure exposure to those futures, but there's some roll costs that retail investors may not understand and that can be like a corrosion on the returns. Then there's physically back commodities, which is essentially precious metals like gold and silver, which store it in a vault. Um John on given what Sarah said, what are you doing with commodities and what which version of those types

of ETFs are you moving into. So we like commodities. We've said in the beginning of the year that you know, we thought on the we thought the inflation would rise, and we thought that commodities were really cheap on their own um and they're an attractive diversifying the portfolio. Right, So it's kind of like it's been marched into its own beat. So US equities are a point p cent since two thousand nine. Commodities are basically flat, right since

two thousand nine. So you know, we own the futures based e t F, so we own a c O M b UM. That's the broad based Bloomberg Commodity Index. So it's a third allocated towards energy and oil, a third allocated towards agriculture, and a third allocated towards metal. Now they've been negatively impacted with the trade wars um Sarah, to your point on your article. So you know, year

to date it's down like I think ninety BIPs. But here's the thing, right, the range of volatility for equities has been massive this year, right, think about like you know, we SMP was up six percent in January, then it was down six percent, and we've had these massive swings commodities.

Although it's down for the year and not up like SMP two three percent, as you mentioned, it's had a lot less volatility and so that's kind of like it works really well in the portfolio to have some commodity allocation. So this one's actually holding actual commodity futures. So in our traffic light system we do give it a red light because to understand holding futures and as they get too near expiration you have to buy a new one. There can be um extra cost in doing that over

and over and over. How do you account for that? Do you accept what that cost might be? I know, and that's not always a cost. Sometimes you gain money from the role, but usually it is. How do you factor that into your purchase of the e T F. It's a great question. So the ironic thing is that you know, in the last you know, four or five years, you've had a pretty big cost, right, so that erosion that you talked about this year, you actually get a benefit from role in those futures. So it's kind of

like a tailwind per se um. But you know, look that can change, right and as an investor, like you may not know what's going on in the you know, the energy oil market and if if the futures are working for you are against you. So you know, I don't I kind of agree with your traffic light system, although you know, temporarily right now it's it's um you know, tailwind. So one thing this all brings up, in my opinion, is the White House, no matter who's in office, whether

it's Obama, Trump, Bush, makes a lot of news. And it's something that's very easy to rotate all the articles around because everybody's watching it and it's got a it is a macro influence. But let's face it, like under Obama, clean energy did not did awful and that was supposed to be the way to play Obama. And then defense and banks did really well under Obama. Who would have thought that? So is it is it bad investment to actually, you know, try to trade or invest a owned who's

in office and what they're saying and doing. How much do you actually take into account? Uh? Earnings most important, right because earnings is what drives you know, kind of stock prices. I think you have to look at the economy of which you know, presidents are impact in that. But we tend to look at like what's going on with earnings and stocks and that usually drives you know, kind of what happened. So, you know, Obama doesn't get enough credit, right, But the market did rally over while

he was in office. Right, People make it see him like, oh, you know, Trump's now kind of this bull market, but you know, we had a bull market. We had actually one of the best bull markets when Obama was in office. So and how do you, uh, Sarah juggle this this idea of earnings which I'll face it aren't that interesting sometimes versus you know, Trump's tweets and and what to like kind of put that into the mixture of like articles.

I mean, earnings are the number one most important and that's what have been the bedrock of this bull market and the bedrock of what's been holding box up so far this year. Every time I talked to an investor and I asked them, all, right, well, now maybe are you're a little bit worried? What are you thinking? Will They keep saying fundamentals are good, Earnings looks good, so

we should be fine. However, what I will say is that we're going to be getting in too earning season, and now what it's really going to be about is that forward guidance and listening to those calls, listening to the executives, because if we hear executives get on those calls and start saying that their business might be affected by these tariffs, that could actually maybe send us lower. But on the other hand, we've been really struggling to

punch higher. And if we get through earning season and no one expresses concern about these tariffs, that could be what also ends up getting us higher. So they matter, but it's also about that anecdotal evidence and what these executives are saying. If ever in doubt, just follow kind of what Warren Buffett, you know, last time I check

to you know, worth eight billion. I mean, he looks at earnings, he looks at what's going on with the company, you know, really kind of goes deep into like the analysis of the stocks that he owns, and he owns you know, super high quality stocks, you know, super value kind of oriented the company. So that is a great way to end it. I think, you know, everything that

was said here was very really interesting. People do want to trade, but ultimately, and we seet the flows a lot of flows just go to just plain vanilla allocating, but you definitely see a slight shift to defense and cash type BTF this year. Guys, thank you so much for coming on today, Joel, thank you so much for calling in on your family fund vacation. By the way, you can only have two of those three things. That's what they say, family fund vacation. Pick two, Joel, which

two are you having? I'm getting the family and the fun. I guess because I got you. Well played, sir, all right, John, Sarah, thanks so much for joining us Centralia. There's a lot of fun. Thank you, Thank you. Thanks for listening to Trillions. Until next time. You can find us on the Bloomberg Terminal, Bloomberg dot com, Apple Podcast, and wherever else you want to listen. We'd love to hear from you. We're on Twitter, I'm at Joel Webber Show, He's at Eric Faltunas, and

you can find our guests at Sarah Kanzick. That's p O in c z e K and you can find John at Astoria Advisors. Trillions is produced by Magnus Hendrickson. Francesco Leavy is the head of Bloomberg Podcast. Bye