1 00:00:02,880 --> 00:00:07,500 ETF Prime is hosted by Nature Ace, President of Investment Advisory Firm, 2 00:00:07,520 --> 00:00:11,740 the ETF store. This program is for informational purposes only, 3 00:00:11,740 --> 00:00:15,940 and does not constitute investment advice. Investing in ETFs involves risk, 4 00:00:15,940 --> 00:00:17,780 including potential loss of principle. 5 00:00:18,080 --> 00:00:22,020 Any past performance figures discussed or not necessarily indicative of future 6 00:00:22,020 --> 00:00:26,860 results. The ETF store is not affiliated with Edy or any of its affiliates. 7 00:00:27,300 --> 00:00:31,020 Edy's participation in this program should not be construed as an endorsement or 8 00:00:31,020 --> 00:00:34,940 indication by tify of the value of any etf, store, product, or service. 9 00:00:35,100 --> 00:00:37,660 Visit ets store.com for more information. 10 00:00:42,850 --> 00:00:46,890 These days. We're all investors trying to be smart with our money, 11 00:00:47,020 --> 00:00:50,170 despite our worst impulses. But at iShares, 12 00:00:50,380 --> 00:00:54,730 we believe that deep down inside of every investor is a better investor. 13 00:00:57,070 --> 00:00:59,490 One that's just waiting to be let out. 14 00:01:01,300 --> 00:01:06,010 Explore iShares ETFs and insights and let your best investor out. 15 00:01:07,290 --> 00:01:09,850 Visit ishares.com for more information. 16 00:01:16,740 --> 00:01:19,120 Now it's time for ETF Prime, 17 00:01:19,120 --> 00:01:23,480 where we discuss everything you need to know about exchange traded funds and the 18 00:01:23,640 --> 00:01:27,440 world of investing. Whether you're an investing expert or just starting out, 19 00:01:27,960 --> 00:01:31,360 Nate will help you get up to date with what's happening on Wall Street and show 20 00:01:31,360 --> 00:01:34,640 you how exchange traded funds can help lower your investment costs, 21 00:01:34,640 --> 00:01:36,000 reduce your tax bill, 22 00:01:36,020 --> 00:01:39,560 and allow you to take advantage of investment opportunities around the world. 23 00:01:39,820 --> 00:01:44,120 And now the host of ETF Prime, Nate Jue. 24 00:01:46,740 --> 00:01:50,200 All right. Joining me this week will be John Suer, 25 00:01:50,200 --> 00:01:54,240 co-founder and president of Innovator ETFs, who, 26 00:01:54,630 --> 00:01:58,880 I'll tell you what Innovator is having quite the year so far. 27 00:01:59,270 --> 00:02:04,000 I show nearly three and a half billion dollars has gone into their ETF lineup 28 00:02:04,000 --> 00:02:05,160 in 2022. 29 00:02:05,490 --> 00:02:09,240 They're now at nearly 9 billion in assets overall. 30 00:02:09,860 --> 00:02:12,640 And for those of you already familiar, uh, with innovator, 31 00:02:12,640 --> 00:02:15,400 you probably already know the story here, 32 00:02:15,600 --> 00:02:19,920 which is innovator offers what are called defined outcome 33 00:02:20,310 --> 00:02:22,720 ETFs or buffer ETFs. Uh, 34 00:02:22,720 --> 00:02:27,280 these are products that allow you to gain exposure to various equity markets 35 00:02:27,690 --> 00:02:32,400 up to a certain cap, and then there's a buffer to the downside. So, for example, 36 00:02:32,830 --> 00:02:37,520 they have an ETF that allows you to get s and p 500 price exposure 37 00:02:37,790 --> 00:02:40,000 over the next year up to, say, 38 00:02:40,110 --> 00:02:43,240 a 15 or 20% cap, 39 00:02:43,420 --> 00:02:48,320 and then you're protected from the first 15% to the downside. 40 00:02:48,780 --> 00:02:50,120 And as you can imagine, 41 00:02:50,120 --> 00:02:53,000 because of the market environment we've been in this year, 42 00:02:53,440 --> 00:02:55,360 where the s and p 500, now down, 43 00:02:55,510 --> 00:02:59,920 what about 21% defined outcome ETFs 44 00:03:00,220 --> 00:03:04,720 are getting some more looks from investors and advisors. Uh, 45 00:03:04,720 --> 00:03:08,120 so John and I are going to dive into these ETFs this week. 46 00:03:08,280 --> 00:03:12,160 We'll talk about how they work, the pros, the cons, 47 00:03:12,460 --> 00:03:16,720 and then we'll also spend a few minutes discussing their most recent ETF launch, 48 00:03:16,720 --> 00:03:18,360 which this is interesting. 49 00:03:18,710 --> 00:03:22,440 It's a risk managed Tesla etf, 50 00:03:22,610 --> 00:03:27,480 so a single stock ETF that has an upside cap and a, uh, 51 00:03:27,800 --> 00:03:30,520 downside buffer on the price of Tesla stock. So, uh, 52 00:03:30,520 --> 00:03:33,280 look forward to discussing that. Also, 53 00:03:33,280 --> 00:03:38,160 joining me this week will be Rich Kerner Senior ETF sales 54 00:03:38,240 --> 00:03:40,680 specialist at Touchstone Investments, 55 00:03:40,900 --> 00:03:45,840 who actually just entered the ETF space back at the end of July. Uh, 56 00:03:45,840 --> 00:03:50,600 they now have four ETFs already, nearly 200 million in assets, by the way. 57 00:03:50,980 --> 00:03:55,920 And these are what I would call high conviction, actively managed strategies. 58 00:03:55,920 --> 00:04:00,400 There's two equity ETFs and two fixed income ETFs, 59 00:04:00,400 --> 00:04:02,840 all using the, uh, transparent ETF wrapper. 60 00:04:03,290 --> 00:04:07,800 So Rich will give us the backstory on why Touchstone enter the ETF space 61 00:04:08,260 --> 00:04:11,560 and how they're attempting to differentiate here. I, 62 00:04:11,560 --> 00:04:16,520 I will say they have a unique model where they're using subadvisors for their 63 00:04:16,520 --> 00:04:20,640 funds, so we'll certainly get into that. Now, to start this week, 64 00:04:20,750 --> 00:04:25,520 really excited about this. I have on the line with me, Roxanne Islam, 65 00:04:25,520 --> 00:04:28,760 who is associate director of research at vfi, 66 00:04:28,870 --> 00:04:33,720 making her ETF prime debut, by the way. And she will be a, 67 00:04:33,720 --> 00:04:36,440 uh, a regular contributor moving forward. I, 68 00:04:36,440 --> 00:04:40,880 I think you're gonna find her various areas of expertise to be, uh, 69 00:04:40,880 --> 00:04:43,960 rather intriguing and certainly a nice addition to this podcast. 70 00:04:44,530 --> 00:04:46,560 So let's chat with Roxanne now. 71 00:04:47,700 --> 00:04:50,280 Now we're joined by the experts at vete, 72 00:04:50,390 --> 00:04:54,160 a new data analytics and thought leadership company that is transforming 73 00:04:54,160 --> 00:04:58,560 financial services from an industry to a community one relationship at a time. 74 00:04:58,690 --> 00:04:59,040 An. 75 00:04:59,040 --> 00:05:03,120 Area that I've been talking a lot about is Bitcoin versus gold. 76 00:05:03,410 --> 00:05:05,800 So right now in the environment that we're in, um, 77 00:05:05,800 --> 00:05:08,720 a lot of investors are concerned over those rising rates. 78 00:05:09,970 --> 00:05:11,760 Roxanne, welcome to the podcast. 79 00:05:13,130 --> 00:05:14,960 Hi. Thank you. I'm really excited to be here. 80 00:05:15,110 --> 00:05:19,840 Yeah. So look, we have a, uh, a great topic to dive into this week. 81 00:05:19,840 --> 00:05:21,480 But before we do that, 82 00:05:21,480 --> 00:05:25,560 since some of our listeners may not be familiar with you and your background, 83 00:05:25,850 --> 00:05:28,120 uh, just tell us a little bit about yourself and, 84 00:05:28,120 --> 00:05:29,560 and your current role with tfi. 85 00:05:30,230 --> 00:05:34,040 Yeah, sure. So, um, great intro. We already gave on me, Roxanne Islam, 86 00:05:34,040 --> 00:05:37,240 Associate Director of research at tfi. Um, you know, 87 00:05:37,240 --> 00:05:41,480 my career in ETF started many years ago at Wells Fargo. 88 00:05:41,790 --> 00:05:45,200 I worked in close end fund and ETF research. Um, 89 00:05:45,220 --> 00:05:48,840 but then I sort of switched gears and for probably six or seven years, 90 00:05:48,840 --> 00:05:53,280 I worked in Sufi equity research covering individual stocks and transportation 91 00:05:53,520 --> 00:05:55,840 logistics and electric vehicle industries at Staple. 92 00:05:56,100 --> 00:06:00,680 And it wasn't until last year in 2021 that I joined Bey through 93 00:06:00,680 --> 00:06:04,520 what was one delirium. And I cover our thematic indexes, 94 00:06:04,520 --> 00:06:09,040 which include anything from Easys to E-commerce to blockchain. 95 00:06:09,060 --> 00:06:13,160 And I really incorporate a lot of that research from my early careers and look 96 00:06:13,160 --> 00:06:16,400 at those mega trends, macro economic data, et cetera, 97 00:06:16,400 --> 00:06:20,200 while also doing some of that in depth stock analysis on the constituent. 98 00:06:20,470 --> 00:06:24,360 Well, I certainly look forward to having you as a regular contributor to, uh, 99 00:06:24,540 --> 00:06:27,080 ETF Prime. I I think we could use a little more expertise, 100 00:06:27,080 --> 00:06:31,040 particularly in the thematic space, which, uh, is clearly, uh, 101 00:06:31,040 --> 00:06:32,640 one of your areas of expertise. 102 00:06:32,740 --> 00:06:36,040 And that's actually where we're going to look this week. 103 00:06:36,160 --> 00:06:39,400 So we're gonna look at two thematic ETF categories that I, 104 00:06:39,400 --> 00:06:42,000 I find both of these pretty interesting, those certainly different. 105 00:06:42,010 --> 00:06:46,840 So electric vehicles in crypto. And what I like about this, 106 00:06:47,080 --> 00:06:49,680 we'll get into some details on the categories themselves, 107 00:06:49,940 --> 00:06:51,360 but I think more importantly, 108 00:06:51,590 --> 00:06:56,000 you're gonna paint the picture for us of how when investors are evaluating 109 00:06:56,200 --> 00:06:57,360 thematic ETFs, 110 00:06:57,510 --> 00:07:02,240 they really need to separate the buzz from sort of the 111 00:07:02,240 --> 00:07:03,640 reality of the situation. 112 00:07:03,640 --> 00:07:07,920 Because investors may hear about certain companies within a thematic category 113 00:07:08,160 --> 00:07:13,120 where there is a lot of media buzz and hype, and investors get excited, 114 00:07:13,120 --> 00:07:14,640 they want to own these companies. 115 00:07:14,900 --> 00:07:18,800 But then when you actually look at the reality of the situation in terms of what 116 00:07:18,800 --> 00:07:21,000 these thematic ETFs hold, 117 00:07:21,300 --> 00:07:25,920 the buzzy companies aren't always there, right? So there can be this, uh, 118 00:07:26,070 --> 00:07:30,040 mismatch between what investors might expect and what they're actually getting 119 00:07:30,040 --> 00:07:34,000 from thematic ETFs. I guess anything you would add to that before we, uh, 120 00:07:34,000 --> 00:07:35,000 get into some detail here? 121 00:07:36,070 --> 00:07:39,320 Yeah, I mean, I'll just say that, you know, it's Amatic ETFs. They've, 122 00:07:39,320 --> 00:07:41,280 they've been around for for years, 123 00:07:41,300 --> 00:07:44,600 but I think they just really shot up around that 124 00:07:44,600 --> 00:07:47,000 20 20, 20 21 timeframe. 125 00:07:47,060 --> 00:07:50,480 And I think it's really important to remember what was happening during that 126 00:07:50,480 --> 00:07:52,720 time period. Cause even though it wasn't that long ago, 127 00:07:52,720 --> 00:07:55,600 it was just completely different environment than what we're in right now. 128 00:07:55,890 --> 00:07:59,440 So that was when, you know, broader equity markets were doing well, 129 00:07:59,440 --> 00:08:04,320 and we saw the emergence of all these specs and stocks and crypto became 130 00:08:04,320 --> 00:08:08,200 really popular. So investors were just becoming much more confident. 131 00:08:08,200 --> 00:08:12,440 They were attracted to these individual stocks that were in the media or on 132 00:08:12,440 --> 00:08:16,000 Reddit, and they were returning these massive amounts in short periods of time. 133 00:08:16,060 --> 00:08:20,440 And a lot of investors were maybe thinking that they're buying the next Tesla or 134 00:08:20,440 --> 00:08:22,520 the next Amazon or the next Apple. 135 00:08:22,980 --> 00:08:27,600 And I think this sentiment sort of bled over to thematic investing. You know, 136 00:08:27,600 --> 00:08:32,000 when I think about thematic investing, it's not necessarily all about that high, 137 00:08:32,000 --> 00:08:34,000 the, that glamor, it's more than that. 138 00:08:34,000 --> 00:08:38,960 It's really investing in a long-term trend that's based on any sort of shift 139 00:08:38,960 --> 00:08:43,160 in behavior or technology or even regulations. And many, 140 00:08:43,160 --> 00:08:47,240 but not all of the holdings are individual stocks and are growth oriented and 141 00:08:47,240 --> 00:08:48,720 higher risk reward stocks. 142 00:08:48,720 --> 00:08:53,440 So there is a bit of crossover between some of these new stocks, 143 00:08:53,530 --> 00:08:56,800 hi, hyped up stocks and thematic investing. But, you know, 144 00:08:56,800 --> 00:09:00,360 while there are some ETFs that, that may even focus on these specific stocks, 145 00:09:00,360 --> 00:09:04,480 the majority of these, um, thematic ETFs are built around indexes. 146 00:09:04,480 --> 00:09:07,320 And they have these revenue streams, these market cap streams, 147 00:09:07,320 --> 00:09:11,480 trading streams that aren't typically inclusive of these highly volatile stocks. 148 00:09:11,480 --> 00:09:14,720 And I think that's where a lot of that misalignment comes from. 149 00:09:14,790 --> 00:09:15,280 Okay, 150 00:09:15,280 --> 00:09:19,600 so that is the perfect jumping off point because let's get into the electric 151 00:09:19,600 --> 00:09:23,160 vehicle category in particular, which by the way, that is a, uh, 152 00:09:23,510 --> 00:09:27,200 a crowded space on the ETF side, and we should probably talk about that as well. 153 00:09:27,200 --> 00:09:30,520 But you've previously written about how, uh, 154 00:09:30,520 --> 00:09:34,040 there were a lot of new entrance into the electric vehicle industry when you 155 00:09:34,120 --> 00:09:38,200 look back at 2020 in 2021. And of course there was a lot of, uh, 156 00:09:38,200 --> 00:09:40,160 associated media attention as well. 157 00:09:40,300 --> 00:09:44,040 But then when you start looking at index and ETF construction, 158 00:09:44,320 --> 00:09:47,680 those companies, uh, aren't always there. So let's start there. 159 00:09:47,680 --> 00:09:51,120 Explain what's been going on in the electric vehicle space in particular. 160 00:09:51,870 --> 00:09:54,920 Yeah, so I think this sector is really interesting cuz you, 161 00:09:55,020 --> 00:09:58,360 you kind of have these two separate stories happening at the same time, 162 00:09:58,360 --> 00:10:00,880 you know, particularly within the passenger EV space, 163 00:10:00,880 --> 00:10:04,400 which I think is one of the, the more interesting, more relatable, um, 164 00:10:04,400 --> 00:10:07,520 portions of the EV industry. So first, you know, 165 00:10:07,520 --> 00:10:11,520 you have these new entrance startup companies that are building these really 166 00:10:11,520 --> 00:10:12,880 cool high tech cars, 167 00:10:13,100 --> 00:10:15,480 and it all seems like they're trying to catch up with Tesla, 168 00:10:15,480 --> 00:10:17,840 which has probably over 70, 169 00:10:17,840 --> 00:10:21,480 75% of the market share for battery electric vehicles within the us. 170 00:10:21,860 --> 00:10:24,680 And then you also have the legacy automakers. 171 00:10:24,680 --> 00:10:28,400 And these are the companies like Ford Toyota, and they're, 172 00:10:28,400 --> 00:10:31,720 they're recognizing that regulations around vehicle emissions are changing. 173 00:10:32,090 --> 00:10:37,000 So they're slowly attempting to shift production from the standard internal 174 00:10:37,000 --> 00:10:40,040 combustion engine vehicle to electric vehicles. 175 00:10:40,610 --> 00:10:42,440 So I think investors and, 176 00:10:42,440 --> 00:10:45,680 and consumers in general are more excited about the new entrance story. 177 00:10:45,680 --> 00:10:50,000 At first, you know, not only were these products really flashy in high tech, 178 00:10:50,000 --> 00:10:54,160 but then the stocks were extremely exciting. Um, and you know, 179 00:10:54,160 --> 00:10:57,560 a lot of these companies, they could eventually be big players in the space, 180 00:10:57,560 --> 00:11:01,040 but you know, right now it's still extremely early. And, you know, honestly, 181 00:11:01,040 --> 00:11:04,280 it's not easy building an easy, it's, it's a very high tech, 182 00:11:04,520 --> 00:11:09,400 large expensive product. And then you combine that with supply chain issues. 183 00:11:09,400 --> 00:11:12,280 And many of these, uh, new entrants that you see in the space, 184 00:11:12,280 --> 00:11:15,720 they haven't even really started production or hit revenue yet. 185 00:11:15,970 --> 00:11:18,720 So that's sort of the reality of the EV space in general. 186 00:11:18,950 --> 00:11:23,560 A lot of new entrances and some seem very promising, but not much concrete yet. 187 00:11:23,560 --> 00:11:27,880 It's, it's mostly based around Tesla. And then you have the legacy automakers, 188 00:11:27,880 --> 00:11:32,040 and then you have this recording industries like the batteries and charging 189 00:11:32,040 --> 00:11:35,880 infrastructure. So when you look at EV ETFs, 190 00:11:35,880 --> 00:11:40,600 they actually end up reflecting that market and not really those smaller 191 00:11:40,600 --> 00:11:45,360 high risk stocks that may get some of that disproportionate media attention. 192 00:11:45,930 --> 00:11:47,840 Um, you know, when you look at these ETFs, 193 00:11:47,840 --> 00:11:50,640 most are built around these rules based indexes. Um, 194 00:11:50,640 --> 00:11:54,240 they actually end up sort of hedging that exposure to some of those smaller, 195 00:11:54,240 --> 00:11:58,040 more volatile stocks. Um, you know, for example, there's revenue restrictions. 196 00:11:58,040 --> 00:11:59,080 And as I was saying, 197 00:11:59,080 --> 00:12:03,240 a lot of these companies haven't even hit production or revenue yet. Um, 198 00:12:03,240 --> 00:12:03,880 and then, you know, 199 00:12:03,880 --> 00:12:06,440 maybe even easier to understand there's market cap restrictions. 200 00:12:06,450 --> 00:12:08,320 So I'll give a few examples. 201 00:12:08,320 --> 00:12:12,840 So when you're looking at ETFs like C A R D or D R I V, 202 00:12:12,840 --> 00:12:16,320 those are both EV indexes, they both follow, uh, sorry, 203 00:12:16,320 --> 00:12:21,120 both EV et ts they both follow indexes that have minimum market cap 204 00:12:21,120 --> 00:12:23,240 waitings of I believe 500 million. 205 00:12:23,300 --> 00:12:27,200 But you're eliminating a lot of these smaller EV companies like, um, 206 00:12:27,330 --> 00:12:31,800 electro mechanica for instance, tickers, So l o um, for instance, 207 00:12:31,800 --> 00:12:35,200 that only has like 150 million market cap and just starting to go into 208 00:12:35,200 --> 00:12:38,400 production. So companies like that are sort of, 209 00:12:38,610 --> 00:12:43,160 they're either not present in the index cuz maybe they cap the index at a 210 00:12:43,160 --> 00:12:46,160 hundred or if you're looking at some of these more, um, 211 00:12:46,800 --> 00:12:50,360 cohesive ETFs indexes, like the ETF id R v, 212 00:12:50,590 --> 00:12:54,920 they have a slightly lower market cap restriction, 300 million I believe. 213 00:12:55,090 --> 00:12:58,160 So you do see a lot of the smaller EV stocks in them, 214 00:12:58,160 --> 00:13:01,680 but even then you were looking at a market cap weighted index, 215 00:13:01,680 --> 00:13:03,160 market cap weighted etf. 216 00:13:03,220 --> 00:13:08,040 And so the weights you have there are well below 1% for, for that sort of stock. 217 00:13:08,370 --> 00:13:11,960 So I think that there's some disconnect between what you'd expect, 218 00:13:12,220 --> 00:13:15,480 the stocks that are getting the media attention and reality. 219 00:13:15,480 --> 00:13:18,680 And that's why it's really important to know the theme you're trying to capture 220 00:13:19,150 --> 00:13:21,880 versus what's actually inside your etf. 221 00:13:22,510 --> 00:13:24,480 I can hear your colleagues, uh, 222 00:13:24,480 --> 00:13:27,160 Todd Rosen blue's voice in the back of my head saying, 223 00:13:27,160 --> 00:13:28,520 You have to look under the hood, 224 00:13:28,680 --> 00:13:32,400 which of course is perfect looking at electric vehicle ETFs, 225 00:13:32,400 --> 00:13:35,920 but it's amazing like the tickers that, uh, you, you just threw out. 226 00:13:35,920 --> 00:13:40,720 So cars C A R Z, that's the first trust. NASDAQ Global Auto Index etf, 227 00:13:40,810 --> 00:13:45,800 um, iDrive, I D R V, that's the iShare self-driving EV and tech etf. 228 00:13:45,950 --> 00:13:49,640 I mean, I could go on here. Global X has one, which is D R I V. 229 00:13:50,320 --> 00:13:54,080 Fidelity has one FD r v simplify, uh, 230 00:13:54,270 --> 00:13:59,240 Spider Crane shares, uh, Smart ETFs, there's a smart etf, 231 00:13:59,240 --> 00:14:02,920 smart Transportation and Technology etf, ticker Moto M oto, 232 00:14:03,170 --> 00:14:07,240 Capital Link NextGen Vehicles and Technology etf. I mean, 233 00:14:07,240 --> 00:14:09,680 there's a lot of products out here. What, 234 00:14:09,680 --> 00:14:14,680 one thing I'm curious about as you went into some detail there, do you view, um, 235 00:14:14,770 --> 00:14:19,360 battery tech ETFs as a decent proxy for playing the 236 00:14:19,600 --> 00:14:22,640 electric vehicle space? I, I ask only because, uh, 237 00:14:22,640 --> 00:14:27,200 obviously battery technology is such a critical factor in electric vehicles and 238 00:14:27,200 --> 00:14:31,000 we have seen some ETFs come to market over the past few years. So like I, 239 00:14:31,000 --> 00:14:33,760 I think of the global x lithium and battery tech etf, 240 00:14:33,910 --> 00:14:37,880 L I t Amplify has a lithium and battery tech etf, ticker, 241 00:14:37,880 --> 00:14:41,080 B A T T A, Wisdom Tree, W B A T. 242 00:14:41,210 --> 00:14:44,600 Do you view those as a decent proxy for electric vehicles? 243 00:14:45,970 --> 00:14:48,280 So I think it's a little tough to answer, 244 00:14:48,280 --> 00:14:52,400 I think somewhat because if you look at these battery tech ETFs, um, 245 00:14:52,400 --> 00:14:56,800 there's actually a lot of crossover between the holdings because these EV ETFs 246 00:14:56,800 --> 00:15:00,560 do hold supporting industries like batteries, infrastructure, et cetera. Um, 247 00:15:00,560 --> 00:15:03,240 and if you look at the correlations, they've actually performed, 248 00:15:03,700 --> 00:15:08,120 I'd say about 0.7 to 0.8, um, correlation. So it's pretty high. 249 00:15:08,650 --> 00:15:12,480 Um, but there are some key differences. For instance, 250 00:15:12,480 --> 00:15:16,880 when you're looking at these battery tech ETFs, they do have higher exposure to, 251 00:15:16,880 --> 00:15:20,440 to places like China. You know, a lot of the materials being mined are, 252 00:15:20,440 --> 00:15:23,400 are not from the us Um, and you know, 253 00:15:23,400 --> 00:15:27,200 also you do have that exposure to materials to commodities, which has done, 254 00:15:27,350 --> 00:15:31,400 done a bit better than some of the the other sectors, um, of, 255 00:15:31,400 --> 00:15:34,800 of the s and p for instance. So when you look at the battery tech ETFs, 256 00:15:34,800 --> 00:15:39,080 it looks like some of them actually outperforms, um, the EV stocks, uh, 257 00:15:39,150 --> 00:15:42,680 year to date at least. So, so it it's pretty interesting cuz yes, you're right, 258 00:15:42,680 --> 00:15:44,840 you can't have an EV without the battery. That's, 259 00:15:44,840 --> 00:15:47,520 that's basically what makes it an electric vehicle. Um, 260 00:15:47,520 --> 00:15:51,080 but I think there are some key differences that could possibly have the two 261 00:15:51,080 --> 00:15:52,040 diverge in the future. 262 00:15:52,060 --> 00:15:54,480 You, you, uh, briefly mentioned performance there. 263 00:15:54,480 --> 00:15:57,600 If we put aside the very important need to obviously look under the hood of, 264 00:15:57,600 --> 00:15:58,840 of all of these ETFs, 265 00:15:59,010 --> 00:16:03,080 do you have any thoughts on the broader market environment around, uh, the, 266 00:16:03,080 --> 00:16:05,800 the EV or, or battery tech category? Because I, 267 00:16:05,800 --> 00:16:09,880 I look at the performance of electric vehicle ETFs and battery tech ETFs, 268 00:16:09,950 --> 00:16:14,920 many of these are down fairly significantly more than the s and p 500. 269 00:16:15,010 --> 00:16:18,000 So do you think this is the same story as with, uh, 270 00:16:18,000 --> 00:16:22,240 sort of the broader disruptive tech category overall high growth stocks where we 271 00:16:22,240 --> 00:16:25,400 have higher interest rates just punishing everything? 272 00:16:25,400 --> 00:16:26,920 Or do you think there's more to it here? 273 00:16:27,430 --> 00:16:31,720 Yeah, I mean, I think a lot of it is that these are higher growth, um, 274 00:16:31,910 --> 00:16:35,320 sort of disruptive tech oriented stocks inside. 275 00:16:35,690 --> 00:16:39,840 So you do see a lot of that negative market sentiment, especially now. 276 00:16:40,220 --> 00:16:45,200 But I do think there's a key difference between the EV space and 277 00:16:45,200 --> 00:16:46,560 some of the other thematic spaces. 278 00:16:46,870 --> 00:16:51,840 I think the EV space is actually sort of as concrete as you can get 279 00:16:51,920 --> 00:16:55,680 when you come to systematic idea because we do know that there are these 280 00:16:55,680 --> 00:16:59,200 regulations coming into pipeline, some as soon as 2030, um, 281 00:16:59,200 --> 00:17:03,040 and not just within the US globally that we need to switch to these cleaner 282 00:17:03,280 --> 00:17:06,480 emission vehicles. So electric vehicles are happening. 283 00:17:06,480 --> 00:17:10,200 It's just a question of how do you capture that, how it materialize? 284 00:17:10,200 --> 00:17:14,400 Will it materialize through these legacy automakers will materialize through 285 00:17:14,400 --> 00:17:16,960 these new entrance or will Tesla just, uh, 286 00:17:17,310 --> 00:17:21,240 hold that market share in the future? So I think that's the real question, 287 00:17:21,240 --> 00:17:24,000 is really how to capture it. And I think that's sort of the beauty of, 288 00:17:24,000 --> 00:17:27,560 of an ETF is it can sort of diversify away some of that single, 289 00:17:27,670 --> 00:17:31,680 single stock risk that you get when you're trying to find the next Tesla out 290 00:17:31,680 --> 00:17:32,100 there. 291 00:17:32,100 --> 00:17:35,120 One thing I'm always curious about, you look at this category, 292 00:17:35,120 --> 00:17:39,960 I I I mentioned earlier, there's a lot of competition here. When you look at a, 293 00:17:39,990 --> 00:17:44,080 a thematic ETF segment like this and you see so many products out there, 294 00:17:44,270 --> 00:17:46,920 what in your mind is the recipe for success? 295 00:17:46,920 --> 00:17:49,560 What do you think determines the winner's longer term here? 296 00:17:50,930 --> 00:17:54,440 Um, so you know a lot, you're right, there's a lot of these ETFs out there. 297 00:17:54,440 --> 00:17:58,000 A lot of them look very similar. A lot of them perform very similarly. Um, 298 00:17:58,000 --> 00:18:01,560 I think it's key to remember that a lot of these scenes, not just EVs, 299 00:18:01,560 --> 00:18:05,120 but they're in their early stages, they're constantly evolving, evolving. 300 00:18:05,450 --> 00:18:10,280 So you have to build an index or ETF that's broad enough to encompass 301 00:18:10,280 --> 00:18:14,480 that theme and account for how that theme will change. Um, for instance, 302 00:18:14,480 --> 00:18:15,840 I'll just use EV for example. 303 00:18:15,840 --> 00:18:20,160 There's a difference between electric and autonomous vehicles and I don't think 304 00:18:20,160 --> 00:18:22,200 many people really really realize that. 305 00:18:22,200 --> 00:18:25,280 So there's not really yet any fully autonomous vehicles, 306 00:18:25,280 --> 00:18:26,880 but there are some in the works. 307 00:18:26,880 --> 00:18:30,720 There's also electric vehicles beyond cars and trucks. 308 00:18:30,720 --> 00:18:33,640 There's electric aircraft, there's electric passenger drones, 309 00:18:33,640 --> 00:18:36,720 and there's actually already several public companies in that space. 310 00:18:36,970 --> 00:18:41,360 So you have to sort of anticipate all this and, and build this into the index, 311 00:18:41,360 --> 00:18:42,240 into the etf. 312 00:18:42,240 --> 00:18:46,440 Otherwise you're looking at constant methodology or strategy changes and you 313 00:18:46,440 --> 00:18:48,760 have too many of those, not necessarily good thing. 314 00:18:49,060 --> 00:18:52,960 And I think on the other hand, you also have to worry about being too broad, 315 00:18:52,960 --> 00:18:55,600 especially Andy's market pathway indexes. 316 00:18:55,600 --> 00:18:59,920 Cuz otherwise you end up having something really similar to the NASDAQ 100. 317 00:19:00,530 --> 00:19:02,480 Clearly your area of expertise, 318 00:19:02,480 --> 00:19:06,880 which I think you're demonstrating very well here today is, is thematics. I, 319 00:19:06,880 --> 00:19:08,680 I'm just curious. Well, you know, look, 320 00:19:08,680 --> 00:19:12,920 we're not here to dispense investment advice, uh, you know, on this podcast, 321 00:19:12,920 --> 00:19:14,800 everybody do your own hor uh, homework, 322 00:19:14,800 --> 00:19:19,440 but how do you view thematic ETFs in the context of a portfolio overall? Like, 323 00:19:19,440 --> 00:19:22,640 like how do you think investors should use thematic ETFs? 324 00:19:23,230 --> 00:19:25,960 Yeah, so I think we touched on this a little bit earlier, but you know, 325 00:19:25,960 --> 00:19:29,360 a lot of these are a higher growth, higher risk reward investment. 326 00:19:29,610 --> 00:19:31,160 So for most investors, 327 00:19:31,160 --> 00:19:35,640 they should be a smaller portion of the portfolio use maybe as a supplement to 328 00:19:35,640 --> 00:19:39,200 broader core holdings. Um, alternative. Alternatively, 329 00:19:39,200 --> 00:19:43,040 I think there are certain spaces, um, that could be used as sector replacements, 330 00:19:43,040 --> 00:19:47,200 like easy ETFs, for instance, could replace an automotive etf. But you know, 331 00:19:47,200 --> 00:19:50,800 in general, these aren't going to be your, your core holdings in your portfolio, 332 00:19:50,800 --> 00:19:53,920 right? These are just, these are gonna supplement some of your, your broader. 333 00:19:53,920 --> 00:19:55,520 Holdings. Yes, well said. You, 334 00:19:55,520 --> 00:19:58,920 you have the core and then you can add a little spice to it with thematic ETFs. 335 00:19:58,920 --> 00:20:01,840 Yep. Um, alright, so a few minutes left. Let's, uh, 336 00:20:01,840 --> 00:20:04,960 quickly pivot here to one of my favorite topics, crypto and, 337 00:20:04,960 --> 00:20:09,440 and blockchain ETFs, which is another very crowded, uh, category by the way. 338 00:20:09,850 --> 00:20:10,760 Um, I, 339 00:20:11,000 --> 00:20:14,920 I guess broadly maybe using the same type of lens you just used for electric 340 00:20:14,920 --> 00:20:15,750 vehicles, I mean, 341 00:20:15,750 --> 00:20:20,080 what are a few key considerations investors should be aware of of here as you 342 00:20:20,080 --> 00:20:20,913 look at this space? 343 00:20:21,430 --> 00:20:25,720 Yeah, so a lot of similarities to draw between the two spaces actually. Um, 344 00:20:25,790 --> 00:20:29,600 it's important to remember this sector is also sell very new. Um, 345 00:20:29,600 --> 00:20:32,720 if you think about Bitcoin itself, it's been around, you know, 346 00:20:32,720 --> 00:20:34,200 less than 15 years at this point. 347 00:20:34,420 --> 00:20:37,640 And some of these crypto and blockchain equity companies, 348 00:20:37,640 --> 00:20:39,400 they've only been around for a couple of years. 349 00:20:39,860 --> 00:20:44,760 And I think over the past couple of years when we saw, um, 350 00:20:44,760 --> 00:20:46,080 you know, the market outperform, 351 00:20:46,080 --> 00:20:49,440 this was a segment that was largely sentiment based. 352 00:20:49,440 --> 00:20:53,440 And I think now there's actually a shift and there's a lot happening in the 353 00:20:53,680 --> 00:20:55,600 pipelines. Um, you know, a lot of regulations, 354 00:20:55,600 --> 00:20:59,920 a lot of institutional adoption that sort of makes the industry more established 355 00:20:59,920 --> 00:21:04,040 and more legitimate. So I don't think it's really, um, you know, run its course. 356 00:21:04,040 --> 00:21:08,160 I think there's still a lot of room for it to run. But, uh, you know, 357 00:21:08,160 --> 00:21:11,760 regardless, I think it's another important area for investors to do, 358 00:21:11,760 --> 00:21:14,920 do diligence then and really understand what you're investing in. 359 00:21:14,920 --> 00:21:18,720 And so I talk about this a lot, but there's a ton of different, um, 360 00:21:18,750 --> 00:21:21,800 blockchain crypto ETFs. So for example, 361 00:21:21,800 --> 00:21:25,280 if you're an investor that really just wants to track the price of Bitcoin 362 00:21:25,280 --> 00:21:29,280 through an ETF product, they would use something like the itto, which is a, 363 00:21:29,280 --> 00:21:33,280 a futures based etf, which with a high correlation to Bitcoin. 364 00:21:33,340 --> 00:21:34,840 But then on the thematic side, 365 00:21:34,840 --> 00:21:39,800 you have blockchain and equi crypto equity ETFs like, uh, D L K and, 366 00:21:39,800 --> 00:21:44,360 and S A T O, which hold companies that support this whole ecosystem. 367 00:21:44,420 --> 00:21:47,840 And with that, you're getting some exposure to the Bitcoin prices, 368 00:21:47,840 --> 00:21:51,960 but it's similar to the concept of ED ETFs where you're actually trying to 369 00:21:51,960 --> 00:21:52,793 capture a shift. 370 00:21:52,860 --> 00:21:56,920 And with EVs it's that shift from the traditional automobile electric cars. 371 00:21:57,180 --> 00:21:58,680 But with watching ETFs, 372 00:21:58,680 --> 00:22:02,680 you're mostly investing in that shift in financial markets and maybe that shift 373 00:22:02,680 --> 00:22:06,840 from internet to web three. Um, so I think it's just important to remember, 374 00:22:06,840 --> 00:22:11,360 like some of these popular blockchain ETF can also get pretty broad and it's not 375 00:22:11,360 --> 00:22:14,840 necessarily a bad thing. I think it depends on what you're really looking for, 376 00:22:14,840 --> 00:22:17,040 what you're trying to invest in. As I was saying, 377 00:22:17,140 --> 00:22:22,040 you have some like LCN and BL KC and those sort of extent 378 00:22:22,040 --> 00:22:26,880 that that market to some of those blockchain adopters and enablers. 379 00:22:26,880 --> 00:22:31,440 And there you sort of get more of an exposure to those diversified tech 380 00:22:31,440 --> 00:22:34,280 companies. And like I said, not necessarily a bad thing, 381 00:22:34,280 --> 00:22:38,040 you just have to make sure that what you're investing in lines up with your 382 00:22:38,040 --> 00:22:38,873 expectations. 383 00:22:39,310 --> 00:22:43,920 Well, Roxanne, absolutely fantastic perspective this week. Certainly, uh, 384 00:22:43,920 --> 00:22:46,280 look forward to having you regularly contribute on this podcast. 385 00:22:46,680 --> 00:22:48,080 Thank you for joining me. 386 00:22:48,470 --> 00:22:50,360 Yeah, thank you so much. I had a great time. 387 00:22:50,550 --> 00:22:55,520 That was Roxanne Islam, Associate Director of research at Vet five. 388 00:22:56,330 --> 00:23:01,260 This week's episode is brought to you by Goldman Sachs Asset Management ETFs, 389 00:23:01,380 --> 00:23:05,500 Smart Investments Made Simple Learn more at GSA 390 00:23:05,580 --> 00:23:09,740 m.com/etfs. ALPS distributor Inc. 391 00:23:09,740 --> 00:23:12,620 Is the distributor of the Goldman Sachs ETF funds. 392 00:23:39,790 --> 00:23:42,060 My next guest is John Souther, 393 00:23:42,060 --> 00:23:45,400 co-founder and president of Innovator ETFs, 394 00:23:45,460 --> 00:23:50,280 who currently offers nearly 90 ETFs about 9 billion 395 00:23:50,810 --> 00:23:51,720 in assets. 396 00:23:52,150 --> 00:23:57,120 This for an issuer whose first product only launched in August of 2018. 397 00:23:57,430 --> 00:24:00,240 Pretty impressive. And you look this year, 398 00:24:00,720 --> 00:24:04,960 their lineup has taken in close to three and a half billion dollars in new 399 00:24:04,960 --> 00:24:06,520 money. Now, of course, 400 00:24:06,520 --> 00:24:11,160 innovator pioneer the defined outcome etf, uh, category, 401 00:24:11,660 --> 00:24:16,040 and they've continued to innovate here, uh, pun intended. So for example, 402 00:24:16,310 --> 00:24:20,560 they recently launched the Innovator Hedge Tesla Strategy 403 00:24:20,900 --> 00:24:24,400 etf, ticker tsl h This is a, uh, 404 00:24:24,400 --> 00:24:27,320 risk managed single stock etf. Uh, 405 00:24:27,320 --> 00:24:31,960 they offer a number of other risk managed products as well, including on the, 406 00:24:31,960 --> 00:24:36,920 uh, bond side. And I now have, uh, John on the line with me from Chicago. 407 00:24:37,350 --> 00:24:39,400 John, it's a pleasure. Welcome to the podcast. 408 00:24:40,640 --> 00:24:43,600 Nate. Thanks Nate. Uh, happy to be here today. Thank you. All. 409 00:24:43,600 --> 00:24:47,720 Right. So look, I know, uh, nobody likes to see the market go down, 410 00:24:47,720 --> 00:24:49,040 but if we're being honest, 411 00:24:49,040 --> 00:24:53,520 this has to be just the type of environment innovators been waiting for, 412 00:24:53,520 --> 00:24:58,200 where I I feel like your product lineup can really shine. And as I mentioned, 413 00:24:58,200 --> 00:25:02,440 I mean nearly three and a half billion dollars into the Innovator ETF lineup 414 00:25:02,440 --> 00:25:03,520 this year. I, 415 00:25:03,520 --> 00:25:07,560 I have to assume it's been at least a little bit easier to find an audience this 416 00:25:07,560 --> 00:25:10,520 year now that everything's not just, uh, going up in a straight line. 417 00:25:11,670 --> 00:25:16,320 Yeah, that's, yeah, that's exactly right, Nate. I, it's, um, I, you know, you, 418 00:25:16,320 --> 00:25:21,320 you hate to capitalize on, on, you know, scary times in the market. Um, 419 00:25:21,320 --> 00:25:24,080 but you gotta remember, you know, when we first launched these, as you said, 420 00:25:24,080 --> 00:25:28,880 it was in August of 2018, and that was at a very different time. You know, 421 00:25:28,880 --> 00:25:32,200 we were on a 10 year bull market and, you know, 422 00:25:32,200 --> 00:25:35,880 the thought of a a defensive type product was, you know, 423 00:25:35,880 --> 00:25:38,240 at that time fell a lot of deaf ears. And, uh, 424 00:25:38,240 --> 00:25:41,560 volatility was at an all time low. And, um, you know, 425 00:25:41,560 --> 00:25:46,520 so our caps were lower as a result, and, uh, rates were down low, so it, 426 00:25:46,610 --> 00:25:48,880 uh, caps were lower. And so, you know, we, 427 00:25:48,880 --> 00:25:52,360 we launched the products into a really tough environment for, 428 00:25:52,360 --> 00:25:56,520 for protection and, and, and downside buffers and, and that type of thing. 429 00:25:56,520 --> 00:26:01,200 And so, um, yeah, we had to lay the groundwork and it finally, um, you know, 430 00:26:01,200 --> 00:26:04,800 the the market cooperated, uh, if you will, uh, 431 00:26:04,800 --> 00:26:06,680 in the last last year for sure. 432 00:26:06,800 --> 00:26:09,480 Well, and just to give listeners a data point, I mean, I, 433 00:26:09,480 --> 00:26:13,320 I feel like innovator has been, you know, pretty successful from the get go, 434 00:26:13,320 --> 00:26:16,320 but that three and a half billion in inflows so far this year, 435 00:26:16,320 --> 00:26:19,240 that's more than doubled your previous best year. 436 00:26:19,240 --> 00:26:23,680 So I show in 2020 and 2021, both of those you took in around 1.4, 437 00:26:23,680 --> 00:26:28,160 1.5 billion. So I, I think it shows that acceleration there. Um, 438 00:26:28,270 --> 00:26:32,200 John, we're gonna get into some of your, uh, ETFs obviously in more detail, 439 00:26:32,200 --> 00:26:35,960 but I do want to take a quick step back here because I'm guessing some of our 440 00:26:35,960 --> 00:26:40,400 listeners might not be aware that you actually co-founded Power Shares, 441 00:26:40,680 --> 00:26:45,560 which of course is now under the Invesco brand fourth largest ETF issue. Again, 442 00:26:45,560 --> 00:26:48,840 I don't wanna get off track here, but I, I always love a little ETF history. 443 00:26:49,060 --> 00:26:51,640 Can you just tell us a a bit about that experience, 444 00:26:51,640 --> 00:26:55,400 maybe how you got involved with Power Shares and what that ride was like? 445 00:26:56,230 --> 00:27:01,040 Yeah, yeah, it was, um, it was a different world back then. Um, you know, 446 00:27:01,040 --> 00:27:05,280 I I would say, you know, the, the biggest difference is, 447 00:27:05,280 --> 00:27:08,480 is people didn't even really know what an ETF was. And those, that, 448 00:27:08,550 --> 00:27:12,480 that did understand 'em back in the early two thousands, they were, are, 449 00:27:12,480 --> 00:27:15,840 were aware of 'em. They didn't really understand how they worked. So, uh, 450 00:27:15,840 --> 00:27:17,720 so yeah, it was a really exciting time. I, 451 00:27:17,720 --> 00:27:21,920 I barely knew what an ETF was back then myself. But, um, 452 00:27:22,380 --> 00:27:25,720 you know, and what I think what we were trying to do when we, 453 00:27:25,720 --> 00:27:28,840 when we started Power Shares was I, I, you know, 454 00:27:28,840 --> 00:27:32,640 my background had been quantitative analysis and, uh, 455 00:27:32,640 --> 00:27:36,640 trying to pick stocks through, through, uh, you know, computer algorithms, 456 00:27:36,640 --> 00:27:40,240 that type of thing. And so we, we thought, you know, what, if, 457 00:27:40,240 --> 00:27:43,680 if we're gonna select stocks or try to outperform the market, why, 458 00:27:44,300 --> 00:27:47,040 why would you put that into a mutual fund rapper? 459 00:27:47,300 --> 00:27:51,800 Why not try to put that into an ETF wrapper? And, and like I said, back then, 460 00:27:51,800 --> 00:27:53,880 I didn't even really have a full appreciation of, 461 00:27:53,890 --> 00:27:58,600 of what the ETF wrapper did or provided. Um, and, 462 00:27:58,600 --> 00:28:01,160 and really the primary thing that, uh, 463 00:28:01,500 --> 00:28:05,960 the ETF wrapper provides is not only liquidity and that type of thing, 464 00:28:05,960 --> 00:28:10,680 but it also, uh, allows you to, to tax manage the funds, uh, 465 00:28:10,680 --> 00:28:15,560 very well. And so, you know, we, you know, PowerShares, we, 466 00:28:15,560 --> 00:28:20,480 we never paid to cap gain distribution for any of our products or any of our 467 00:28:20,670 --> 00:28:25,560 ETFs, uh, for, for decades and or a decade at least until I left. 468 00:28:25,560 --> 00:28:27,960 But, um, and that's, you know, 469 00:28:27,960 --> 00:28:32,520 nothing to do with our savvy tax management ability is just the, 470 00:28:32,700 --> 00:28:37,280 the in kind mechanism of an ETF allows you to, um, 471 00:28:37,620 --> 00:28:42,120 you know, tax manage in a very efficient way. So, so we were really, you know, 472 00:28:42,140 --> 00:28:45,800 the, the PowerShare story was like, Hey, this has been, 473 00:28:45,800 --> 00:28:47,440 people are doing this in a mutual fund. 474 00:28:47,440 --> 00:28:52,120 Why wouldn't you at least consider doing very similar things in, 475 00:28:52,120 --> 00:28:54,600 in an ETF rapper? And, you know, the, 476 00:28:54,600 --> 00:28:58,880 the SCC hadn't allowed actively managed ETFs at the time, 477 00:28:59,260 --> 00:29:03,120 and so we, we kind of got a little bit creative and, 478 00:29:03,120 --> 00:29:07,720 and basically made indexes more like active 479 00:29:07,720 --> 00:29:09,320 management. We just said, Well, if, 480 00:29:09,320 --> 00:29:12,600 if an ETF is only allowed to replicate an index, 481 00:29:12,600 --> 00:29:16,160 well then why wouldn't you just make the index, you know, have, 482 00:29:16,160 --> 00:29:18,080 have a little different goal for the index, 483 00:29:18,080 --> 00:29:22,160 and that's to try to outperform the market or to, to manage a risk or to, 484 00:29:22,770 --> 00:29:26,360 uh, you know, maybe, um, mitigate, you know, 485 00:29:26,360 --> 00:29:29,640 single stock exposure that are, that's found in some indices that, 486 00:29:29,640 --> 00:29:33,400 that type of thing. So, um, so we really sought to redefine what a, 487 00:29:33,630 --> 00:29:37,800 what an index was so that we could replicate, um, you know, 488 00:29:38,020 --> 00:29:42,800 not just pure beta indexes, but indexes that try to achieve something. 489 00:29:43,410 --> 00:29:46,560 Um, so yeah, it was a fun ride and, uh, it was, 490 00:29:46,560 --> 00:29:50,920 it was fun to educate people on what an ETF is, what it does. And, 491 00:29:51,650 --> 00:29:54,840 um, yeah, so it's, uh, it's a very different world today, 492 00:29:54,840 --> 00:29:57,520 much more crowded space, and, uh, as you know, 493 00:29:57,790 --> 00:30:02,360 everything under the sun seems like it's been done, but, um, you know, 494 00:30:02,720 --> 00:30:07,680 creative people think of more ideas all the time. So, um, so yeah, 495 00:30:07,680 --> 00:30:09,920 that's a little bit of the background of, of Power Shares. 496 00:30:10,060 --> 00:30:14,040 And then how was it that you came to co-found Innovator ETFs? 497 00:30:15,590 --> 00:30:19,560 Yeah, well, uh, you know, Bruce Bond and, and I had started Power Shares, like, 498 00:30:19,560 --> 00:30:22,760 you know, like you said, back in 2003. And, uh, you know, the, 499 00:30:22,760 --> 00:30:26,680 the running joke in the office is that after we sold Power Shares, uh, 500 00:30:26,810 --> 00:30:30,520 Bruce's wife wanted him out of the house. And so we added a, you know, 501 00:30:30,520 --> 00:30:34,880 had something for him to do. But, um, we, you know, the, the, 502 00:30:34,880 --> 00:30:38,880 the more serious answer is that, um, you know, I was, well, actually, 503 00:30:38,880 --> 00:30:43,680 I was pitched an insurance product that had like a structured note 504 00:30:44,760 --> 00:30:46,920 embedded in it. So in other words, if it, 505 00:30:46,920 --> 00:30:49,960 the insurance product allowed you as like a, 506 00:30:49,960 --> 00:30:54,760 basically a universal or a whole life policy that allowed you to invest the 507 00:30:54,760 --> 00:30:57,480 assets of the insurance policy in the market, 508 00:30:57,480 --> 00:31:02,120 but it also had downside protection as well. And so, 509 00:31:02,450 --> 00:31:06,440 um, it's basically like a crediting strategy in an et in a, I'm sorry, in a, 510 00:31:06,440 --> 00:31:10,400 in a life insurance rapper. And, and I, you know, at the time I didn't really, 511 00:31:10,630 --> 00:31:14,080 I've never looked at an annuity or, or structured note myself. 512 00:31:14,080 --> 00:31:16,000 And so I didn't have a, a ton of interest, 513 00:31:16,000 --> 00:31:19,280 but the insurance rapper got me somewhat interested. 514 00:31:19,280 --> 00:31:24,040 And so I'd say similar to Power Shares, you know, the, 515 00:31:24,040 --> 00:31:27,800 the question was like, Well, you know, maybe we shouldn't, 516 00:31:27,800 --> 00:31:29,920 maybe this shouldn't be done in a mutual fund wrapper. 517 00:31:29,920 --> 00:31:34,280 Maybe it should be done in an ETF wrapper. And so a lot of the, the, 518 00:31:34,280 --> 00:31:38,200 the products that the insurance and banks provide, you know, the, 519 00:31:38,200 --> 00:31:41,280 the question is, why hasn't that been done in an ETFs and, 520 00:31:41,280 --> 00:31:45,400 and could it be done in an etf? And so, um, so it was, 521 00:31:45,400 --> 00:31:48,200 it was a steep learning curve for me and for, for all of us, 522 00:31:48,200 --> 00:31:51,640 just cuz I didn't have a ton of derivatives experience and, 523 00:31:51,820 --> 00:31:56,160 and structured node and annuity experience. And, um, but, but that's what we, 524 00:31:56,160 --> 00:31:58,800 that's what we set out to do, is to, um, 525 00:31:59,130 --> 00:32:01,400 to bring a lot of the products that are, 526 00:32:01,400 --> 00:32:03,240 that are offered by insurance company and, 527 00:32:03,240 --> 00:32:08,160 and banks and put them in the ETF wrapper. Um, you know, my, 528 00:32:08,160 --> 00:32:11,080 uh, my youngest daughter, I have four daughters, 529 00:32:11,080 --> 00:32:16,040 and my youngest started working at Chick-fil-A when she was 14 years old. And, 530 00:32:16,040 --> 00:32:18,720 um, you know, I, I thought they had child, 531 00:32:18,720 --> 00:32:21,760 child labor laws to prevent that kind of thing, but I was proud of her, 532 00:32:21,760 --> 00:32:26,560 of course, and she worked there for, for many years. And, um, still to this day, 533 00:32:26,560 --> 00:32:30,720 her favorite restaurant is Chick-fil-A, which is, you know, , 534 00:32:30,720 --> 00:32:32,800 usually when you work at a fast food restaurant, 535 00:32:32,800 --> 00:32:36,520 you never want to eat there again, but sh she still loves it. So it's, 536 00:32:36,520 --> 00:32:40,600 it's the same thing, uh, it's the same idea concept or the, 537 00:32:40,600 --> 00:32:43,800 the more I've done ETFs and now I've done it for most of my career, 538 00:32:44,220 --> 00:32:48,120 the more I appreciate the, the, the chassis or the, 539 00:32:48,120 --> 00:32:52,160 the vehicle itself and, and what it provides. And so, you know, 540 00:32:52,160 --> 00:32:56,280 when compared to a, an insurance product or a structured node, um, you know, 541 00:32:56,280 --> 00:33:00,040 what, what we've done is we've, we've created liquidity, you know, 542 00:33:00,040 --> 00:33:04,720 in the product. Uh, many insurance products and, and bank issue products are, 543 00:33:04,720 --> 00:33:06,800 are highly illiquid. And, um, you know, 544 00:33:06,800 --> 00:33:09,720 so we've added the intra day liquidity of an etf. We've, 545 00:33:09,720 --> 00:33:14,480 we've added transparency. Um, and then the, and then the tax piece, 546 00:33:14,480 --> 00:33:18,040 which I touched on before, um, which I really can't state enough, is, 547 00:33:18,450 --> 00:33:21,480 is what we bring to bear. And, you know, and the other thing too is you, 548 00:33:21,480 --> 00:33:25,920 you remove the counterparty risk or the credit risk associated with the, 549 00:33:26,060 --> 00:33:28,680 the issuer of a, of a structured note. 550 00:33:28,680 --> 00:33:30,960 And so that's why we were pretty excited to, 551 00:33:31,330 --> 00:33:34,320 to figure out if it could be done in an etf. And, you know, 552 00:33:34,320 --> 00:33:38,120 the FCC was like scratching their head, like, What are you guys trying to do? 553 00:33:38,120 --> 00:33:41,680 And, uh, so it took a little while and, uh, but we were glad we, 554 00:33:41,770 --> 00:33:46,400 we took the effort and, and, and took the time to, to figure it out and get it, 555 00:33:46,400 --> 00:33:50,080 get it, uh, approved, uh, and, and out into the marketplace. 556 00:33:50,260 --> 00:33:50,800 All right. 557 00:33:50,800 --> 00:33:54,880 So the bread and butter of your ETF lineup is obviously the defined outcome 558 00:33:55,110 --> 00:33:57,640 ETFs. And I've covered these quite a bit on the podcast, 559 00:33:57,640 --> 00:34:00,640 but we do always have new listeners joining us. So I, 560 00:34:00,640 --> 00:34:04,480 I thought it'd be good to have you just explain how these work and any other 561 00:34:04,490 --> 00:34:08,000 nuances. And I'll, I'll give you a specific series as an example. 562 00:34:08,370 --> 00:34:11,680 So let's use the October series on the s and p 500, 563 00:34:11,680 --> 00:34:14,800 since these will be resetting soon. Mm-hmm. and I'll, 564 00:34:14,800 --> 00:34:19,640 I'll just know there's the US Equity Buffer etf, ticker B O C T, 565 00:34:19,770 --> 00:34:24,200 there's the US Equity Power Buffer etf, P O C T, 566 00:34:24,500 --> 00:34:29,440 and then the, uh, US Equity Ultra Buffer etf, ticker U O C T. 567 00:34:30,070 --> 00:34:32,560 Just walk us through the basic design of these and, and, 568 00:34:32,560 --> 00:34:35,160 and how these work for somebody who is unfamiliar with them. 569 00:34:35,710 --> 00:34:40,320 Yeah. At, you know, at, at the highest level you can take it, it's, 570 00:34:40,390 --> 00:34:43,560 it's really straightforward. It's, it's for the person that says, You know what? 571 00:34:43,560 --> 00:34:47,720 I, I do wanna stay invested in the market. I know that's the right thing to do. 572 00:34:47,720 --> 00:34:50,200 I should, I should own stocks. And, 573 00:34:50,300 --> 00:34:55,160 but I'd also like to maybe have some downside 574 00:34:55,670 --> 00:34:58,640 buffer or protection or, um, 575 00:34:58,710 --> 00:35:01,720 some type of risk management on the downside, 576 00:35:01,720 --> 00:35:04,200 if the market does go down and I'm, 577 00:35:04,200 --> 00:35:08,280 I'm willing to give up something for that, which is the upside, 578 00:35:08,280 --> 00:35:12,000 some of the upside. And so many of our products, or most of them, 579 00:35:12,000 --> 00:35:14,720 I would say the vast majority have have caps. 580 00:35:14,720 --> 00:35:17,000 And so it's for the person that says, You know, what, 581 00:35:17,000 --> 00:35:21,480 if I could stay invested in the s and p 500 etf, 582 00:35:22,060 --> 00:35:25,760 but have a 15% buffer, so if the market goes down, 583 00:35:26,770 --> 00:35:29,960 uh, 15% or less, the, 584 00:35:30,140 --> 00:35:34,480 the fund will not go down at all over a one year period. 585 00:35:34,480 --> 00:35:39,400 Most of our products are, they have these, uh, what we call annual resets where, 586 00:35:39,810 --> 00:35:44,200 uh, they, they don't expire, but they, they just reset every year. So if you're, 587 00:35:44,290 --> 00:35:49,080 if today, October, 2000 and, or almost October, 2022, 588 00:35:49,080 --> 00:35:53,480 if you're saying a year from now, I, I wanna stay invested in the s p 500, 589 00:35:53,620 --> 00:35:58,000 but I also, if I could buffer the first 15% of losses, 590 00:35:58,690 --> 00:36:03,280 um, I'd be willing to, to cap my upside, um, 591 00:36:03,810 --> 00:36:08,600 to, to obtain that. So like for instance, for the, for the, the, 592 00:36:08,600 --> 00:36:12,480 so we have different buffer levels as well. We have nine, 15, 30%. 593 00:36:12,480 --> 00:36:17,480 So for a 15% buffer, that means you're protected for the first 15%, 594 00:36:17,480 --> 00:36:20,080 and then you participate in losses. You, you're, 595 00:36:20,080 --> 00:36:24,800 you're willing to cap your exposure to the s and p 500 at 596 00:36:25,160 --> 00:36:30,080 18%, or, or are the estimated caps for, for, uh, October one. 597 00:36:30,570 --> 00:36:34,440 So, um, so if you're, if your mindset is like, Well, I'm happy with, 598 00:36:34,570 --> 00:36:39,320 if I could get 18% return on the market, that would be great. 599 00:36:39,780 --> 00:36:42,320 And, and I'm also willing to, uh, 600 00:36:42,580 --> 00:36:46,120 but for the benefit of being cap myself at 18%, 601 00:36:46,150 --> 00:36:49,880 I also get a 15% buffer. So, um, you know, 602 00:36:50,130 --> 00:36:54,080 on a 9% buffer, so you're only, you've protected for that first 9%, 603 00:36:54,080 --> 00:36:57,040 and then you have exposure to the market. There's currently, 604 00:36:57,040 --> 00:37:00,440 there'll be a 26% cap roughly, um, 605 00:37:00,740 --> 00:37:04,840 for the October reset here. So, um, so yeah, again, 606 00:37:04,840 --> 00:37:07,880 really high level it's, I, I, I wanna stay, invest in the market. 607 00:37:07,880 --> 00:37:11,640 I know it's the right thing to do, but, um, you know, I'm, 608 00:37:11,640 --> 00:37:15,560 I'm nervous and so I'd, I'd want some type of, um, 609 00:37:16,240 --> 00:37:17,720 downside buffer built in, 610 00:37:18,300 --> 00:37:22,720 and I'm willing to cap my upside over a one year period for that. And I think, 611 00:37:22,720 --> 00:37:26,560 you know, I think, I think investors like the clarity of it all, like, you know, 612 00:37:26,560 --> 00:37:31,480 like, oh, a year from now, like, you know, you're, you can kind of not, 613 00:37:31,480 --> 00:37:33,400 not make a bet, but make a, uh, 614 00:37:33,400 --> 00:37:37,880 express your opinion on what you think the market could do. You know, if you're, 615 00:37:38,000 --> 00:37:39,800 if you're saying, Well, yeah, I think, 616 00:37:39,800 --> 00:37:44,560 I think the market being down between zero and 15% is a, is a real possibility, 617 00:37:44,560 --> 00:37:47,560 then, then you can buy our power buffer product. 618 00:37:47,560 --> 00:37:51,560 Or if you think the market could be down 25% or 30%, 619 00:37:51,560 --> 00:37:56,200 then we have an ultra buffer that that protects for the first 30%. So, uh, 620 00:37:56,200 --> 00:38:01,080 so it's a way for you to, in effect, like tailor returns to what, 621 00:38:01,490 --> 00:38:05,880 uh, to meet your investment risk and your, your, you know, 622 00:38:05,880 --> 00:38:09,880 your profile of what you wanna achieve in your portfolio. So. 623 00:38:10,470 --> 00:38:12,680 Yeah, I thought that was a high level. Yeah, no, 624 00:38:12,680 --> 00:38:13,720 I thought that was a good description. 625 00:38:13,720 --> 00:38:16,200 If I could just sort of restate what you walked through. 626 00:38:16,450 --> 00:38:19,280 So investors can buy the upcoming, uh, 627 00:38:19,280 --> 00:38:23,880 October US Equity Power Buffer etf, and if they buy that on day one, 628 00:38:23,880 --> 00:38:25,480 and we can talk a little bit more about that, 629 00:38:25,490 --> 00:38:29,360 they're protected from the first 15% down move in the s and p 500. 630 00:38:29,610 --> 00:38:33,120 If the s and p 500 goes up, they're gonna capture that up to a cap, 631 00:38:33,120 --> 00:38:36,520 which I believe you said was a little over 15%. And I'll, 632 00:38:36,520 --> 00:38:38,040 I'll add that there are no dividends here. 633 00:38:38,040 --> 00:38:41,400 I think we should mention that the fees, as I look at your ETF line, 634 00:38:41,400 --> 00:38:44,800 many of these are around, excuse me, 79 basis points. 635 00:38:44,940 --> 00:38:49,920 And I'll also note that in terms of the exposure itself that's 636 00:38:49,920 --> 00:38:54,680 being gained through what are called flex options or flexible exchange 637 00:38:54,680 --> 00:38:57,880 options, um, is all that correct? Anything you would add to that? 638 00:38:58,510 --> 00:39:00,640 Yeah, I didn't, I, Yeah, thanks Nate. 639 00:39:00,640 --> 00:39:03,800 I didn't really get under the hood as much, but you're, you're exactly right. 640 00:39:03,800 --> 00:39:07,720 How do we do that? We, we, we buy, um, it's, 641 00:39:07,720 --> 00:39:12,040 it's through a portfolio of, of flex options, uh, that you mentioned. And so, 642 00:39:12,530 --> 00:39:17,120 um, and it's pretty straightforward. It's a static portfolio of options that, 643 00:39:17,570 --> 00:39:22,560 um, basically you, you buy a, a deep in the money call on on S P Y, 644 00:39:22,560 --> 00:39:26,120 which is the s and p 500 etf. Uh, 645 00:39:26,120 --> 00:39:28,920 so when you buy a deep in the money call on on S P Y, 646 00:39:29,230 --> 00:39:32,320 that gives you one to one, uh, 647 00:39:32,870 --> 00:39:36,440 tracking of the market. And so that's how we achieve that. 648 00:39:36,780 --> 00:39:40,760 And then we also, um, basically, um, 649 00:39:41,290 --> 00:39:44,520 we buy a put spread so that that enables, you know, 650 00:39:44,520 --> 00:39:47,840 for the 15% buffer that that limits, uh, 651 00:39:48,160 --> 00:39:50,960 downside for that first 15%. So we're, so we, 652 00:39:50,960 --> 00:39:54,520 we buy that call option that deepen the money, call on, on the spider, 653 00:39:54,600 --> 00:39:58,000 and then we, we, we buy these, the put option to, 654 00:39:58,130 --> 00:40:01,920 to provide that protection from zero to 15%. 655 00:40:02,470 --> 00:40:07,400 That option package costs more than money that we 656 00:40:07,400 --> 00:40:09,760 have. And so if it's, you know, if you have a hundred dollars to spend, 657 00:40:09,950 --> 00:40:12,920 that would cost you about $106. So, 658 00:40:13,050 --> 00:40:18,040 so we have to sell a call option, uh, to finance that, 659 00:40:18,040 --> 00:40:22,440 and that's what, that's what sets the cap. So I said on the 15% buffer, 660 00:40:22,440 --> 00:40:25,240 the the caps are looking like they'll be about 18%. 661 00:40:25,580 --> 00:40:29,640 And so that's what selling that call option is what capture performance. 662 00:40:29,640 --> 00:40:33,880 So you only participate up to that, up to that cap. And, and like, 663 00:40:33,880 --> 00:40:37,360 like you mentioned, it's, it's generally over a one year period. And then, 664 00:40:37,360 --> 00:40:41,880 you know, once you over the, after the, the options expire a year later, 665 00:40:41,930 --> 00:40:45,640 nothing happens as far as, you know, you don't have to sell the etf, 666 00:40:45,640 --> 00:40:49,800 you can just hold onto it. And then a new options package is put in place with, 667 00:40:49,800 --> 00:40:54,520 with new caps and, um, that type of thing. And all that happens in a, you know, 668 00:40:54,520 --> 00:40:56,360 tax efficient manner. Uh, 669 00:40:56,360 --> 00:40:59,800 you shouldn't expect any capital game distributions in the product. 670 00:41:00,270 --> 00:41:02,200 John, uh, just a few minutes left here. 671 00:41:02,200 --> 00:41:05,400 I keep mentioning the point to point aspect of these products. I, 672 00:41:05,400 --> 00:41:09,480 I always like to emphasize this, when, when covering to defined outcome ETFs. 673 00:41:09,890 --> 00:41:13,400 Uh, I, I just think it's important for investors to understand this, 674 00:41:13,400 --> 00:41:18,000 and I wanna reiterate that the initial upside cap and downside buffer, 675 00:41:18,240 --> 00:41:23,240 those only apply if an investor buys these products on day one. 676 00:41:23,320 --> 00:41:27,000 Otherwise, obviously with, uh, moves up and down in the markets, 677 00:41:27,270 --> 00:41:30,880 that upside cap and downside buffer will move as well. Um, 678 00:41:30,880 --> 00:41:32,480 is there anything that you would add to that? 679 00:41:32,480 --> 00:41:35,800 I know innovator has built some great tools on the website, 680 00:41:35,970 --> 00:41:39,960 so if somebody wants to go and look at a particular ETF and see the remaining 681 00:41:39,960 --> 00:41:42,880 cap or, or buffer that's all out there. Anything else you would add? 682 00:41:43,710 --> 00:41:45,240 Yeah, I, you know, the, the, 683 00:41:45,240 --> 00:41:48,800 I think the defined nature of these products is really what helps sell them. 684 00:41:48,800 --> 00:41:53,560 You know, candidly, I think people like to like, make that determination, Oh, 685 00:41:53,560 --> 00:41:58,000 a year from now I think, you know, x, y or Z is gonna happen. And so, 686 00:41:58,410 --> 00:42:02,720 um, so yeah, you're exactly right. It's, it's defined. And, um, you know, the, 687 00:42:02,720 --> 00:42:06,680 the way I always describe it is when you buy a bond, um, 688 00:42:06,680 --> 00:42:08,000 the coupon doesn't change, 689 00:42:08,020 --> 00:42:12,640 but what you pay for that coupon changes based on rates and, 690 00:42:12,700 --> 00:42:16,480 and, you know, other factors, it's the same thing here. You, you, 691 00:42:16,480 --> 00:42:19,880 you know what you're gonna get at the end of the outcome period, but, 692 00:42:19,940 --> 00:42:23,760 but what you pay for that changes. And so it's, it's, 693 00:42:23,760 --> 00:42:27,880 it's very much just as defined the first day of the outcome period as it is six 694 00:42:27,880 --> 00:42:31,080 months into the outcome period, you, it's, it's not, not really any different. 695 00:42:31,080 --> 00:42:35,240 You're, you're just kind of getting a, a, a stamp in time, but if, 696 00:42:35,240 --> 00:42:40,160 if you were to buy 1, 6, 3 months into the outcome period, it's the same thing. 697 00:42:40,160 --> 00:42:40,520 You know, 698 00:42:40,520 --> 00:42:44,640 it's just a different price and you know exactly where you're gonna end up. Uh, 699 00:42:44,640 --> 00:42:48,520 and so you're just paying something different for that amount. Um, so, 700 00:42:48,540 --> 00:42:50,440 and you know, we, to your point, we, 701 00:42:50,440 --> 00:42:54,720 we thought people would generally just buy them near or end at the end of the 702 00:42:54,720 --> 00:42:58,480 outcome periods, but, um, we've really found people doing, you know, 703 00:42:58,480 --> 00:43:03,400 a lot of different things, trading them in between. And, um, you know, so you, 704 00:43:03,400 --> 00:43:06,600 you, you have the flexibility. We've, we've kind of created a, 705 00:43:06,790 --> 00:43:11,600 a secondary market, if you will, for a, a structured note outcome, you. 706 00:43:11,600 --> 00:43:14,560 Know? Yeah. And I should note the defined outcome products you offer, 707 00:43:14,560 --> 00:43:18,920 they span not only the s and p 500, uh, but also small caps, 708 00:43:19,020 --> 00:43:21,720 the nasdaq, you have a developed, uh, 709 00:43:21,720 --> 00:43:24,560 international and emerging market equity products, and even a, 710 00:43:24,560 --> 00:43:28,080 a long term US treasury products. Uh, but before I let you go, 711 00:43:28,080 --> 00:43:29,920 I have to ask you about the most recent product, 712 00:43:29,920 --> 00:43:33,720 which is this new hedge Tesla strategy etf, 713 00:43:34,580 --> 00:43:37,600 tsl H uh, as I'm sure you're aware, the, uh, 714 00:43:37,600 --> 00:43:42,320 introduction of single stock ETFs is probably one of the biggest ETF stories of 715 00:43:42,320 --> 00:43:46,000 2022. I, I think it might end up at the top of the list in your etf. 716 00:43:46,000 --> 00:43:49,960 This offers exposure to the price of Tesla up to a cap, 717 00:43:50,140 --> 00:43:55,040 and then it actually has a max loss, so a floor of 10% each quarter, 718 00:43:55,380 --> 00:43:59,960 not including fees. Just briefly tell us about this one. Why Tesla and how, 719 00:43:59,960 --> 00:44:01,160 how are you getting this exposure? 720 00:44:02,430 --> 00:44:05,840 Yeah, yeah. So like, it's, it's again, pretty straightforward. 721 00:44:05,840 --> 00:44:08,080 This one's unique in that it's actually a floor product. 722 00:44:08,080 --> 00:44:10,360 So most of ours are buffer where you, you know, 723 00:44:10,360 --> 00:44:14,320 you're buffered for the first 15 or you know, 30%. This is actually, 724 00:44:14,320 --> 00:44:17,680 you cannot go down more than 10%, um, 725 00:44:17,930 --> 00:44:20,600 if you buy it at the beginning of the outcome period, and it's quarterly. So, 726 00:44:20,770 --> 00:44:23,760 so again, yeah, it's like, like many of our products, it's, 727 00:44:23,760 --> 00:44:28,120 it's for the person that says, You know what? I, I wanna own, or I, I want to, 728 00:44:28,120 --> 00:44:30,920 you know, maintain exposure to Tesla, but I don't think, 729 00:44:31,000 --> 00:44:33,240 think it's gonna have the, uh, you know, 730 00:44:33,240 --> 00:44:36,840 strato furic returns that it has in the past, but, uh, 731 00:44:36,840 --> 00:44:40,800 I want to maintain some exposure to it. And so, you know, 732 00:44:40,800 --> 00:44:43,640 you're basically putting guardrails on that product and, 733 00:44:43,640 --> 00:44:47,040 and basically it's very simple. It's how we do it, it's, it's, uh, 734 00:44:47,040 --> 00:44:51,720 it's treasuries, and then we buy, um, you know, a call option to, 735 00:44:51,720 --> 00:44:54,880 to gain you that exposure and then, uh, and sell the call option. 736 00:44:55,020 --> 00:44:59,800 And that's what sell, uh, sets that cap. So very straightforward, uh, 737 00:44:59,800 --> 00:45:04,560 resets every quarter. And you know, the, when we just launched it, you know, 738 00:45:04,560 --> 00:45:08,760 a couple, two and a half months ago, the, the Teslas up, 739 00:45:08,760 --> 00:45:13,760 I think about six or 7%. So it's underneath that cap. And so, um, 740 00:45:13,760 --> 00:45:17,160 for the person that bought it when we first launched it, you know, 741 00:45:17,160 --> 00:45:20,560 you've participated one to one with Tesla, and, 742 00:45:20,560 --> 00:45:23,800 but you've also had a 10% floor in place. So as, so, 743 00:45:23,800 --> 00:45:28,560 as long as Tesla doesn't go up more than about 10 or so 744 00:45:28,560 --> 00:45:31,680 percent each quarter, then, uh, you know, you've, 745 00:45:31,680 --> 00:45:35,440 you've kept pace with just owning Tesla on its own, but you've had a, 746 00:45:35,590 --> 00:45:40,240 a 10% floor in place. So, um, so yeah, our, you know, the other product, 747 00:45:40,240 --> 00:45:43,880 single stock products out there, I think are trying to gain you, you know, 748 00:45:43,880 --> 00:45:47,720 higher beta, more exposure, uh, similar to other products, we're, 749 00:45:47,720 --> 00:45:51,600 we're trying to reduce beta or reduce exposure. Um, but it's, 750 00:45:51,600 --> 00:45:53,480 but still allow you to, to stay invested. 751 00:45:53,830 --> 00:45:57,280 Well, John, we're gonna have to leave it there. Uh, great to finally connect. 752 00:45:57,420 --> 00:46:01,800 Congratulations to you and the entire innovator team on all of the success. 753 00:46:01,880 --> 00:46:03,200 Thank you for joining me. 754 00:46:03,630 --> 00:46:05,200 Thanks, mate, We appreciate it. 755 00:46:05,310 --> 00:46:06,680 That was John South, 756 00:46:06,680 --> 00:46:10,360 co-founder and president of Innovator ETFs. 757 00:46:12,170 --> 00:46:14,070 And now a word for iShares. 758 00:46:14,130 --> 00:46:17,670 The shift to a low carbon economy is changing the way people invest. 759 00:46:18,000 --> 00:46:22,150 iShares sustainable ETFs help you position your portfolio to manage 760 00:46:22,150 --> 00:46:25,790 sustainability related opportunities and risks such as climate change. 761 00:46:25,850 --> 00:46:29,790 Get your share of progress at ishares.com/sustainable. 762 00:46:29,790 --> 00:46:34,030 Visit ishares.com to view a prospectus, which includes investment objectives, 763 00:46:34,030 --> 00:46:35,310 risks, fees, expenses, 764 00:46:35,310 --> 00:46:37,950 and other information that you should read and consider carefully. 765 00:46:37,950 --> 00:46:40,150 Before investing risk includes principal loss. 766 00:46:40,150 --> 00:46:44,030 There is no guarantee any fund will exhibit positive or favorable sustainability 767 00:46:44,030 --> 00:46:47,110 characteristics prepared by BlackRock Investments llc. 768 00:46:52,040 --> 00:46:52,873 Stop. 769 00:47:18,310 --> 00:47:23,130 I'm now joined by Rich Kerner Senior ETF sales specialist at Touchstone 770 00:47:23,130 --> 00:47:27,050 Investments, who back in July, just a couple of months ago, 771 00:47:27,120 --> 00:47:31,720 they entered the ETF space with a launch of the Touchstone Strategic 772 00:47:31,740 --> 00:47:34,320 Opportunities etf, ticker sio. 773 00:47:34,710 --> 00:47:39,440 They quickly followed that up with a launch of three additional ETFs, 774 00:47:39,440 --> 00:47:40,273 which we'll get into. 775 00:47:40,570 --> 00:47:45,280 So four ETFs and all already nearly 200 million in assets, 776 00:47:45,280 --> 00:47:49,040 by the way. And, uh, Rich is now on the line with me. Rich, 777 00:47:49,090 --> 00:47:50,400 welcome to the podcast. 778 00:47:52,040 --> 00:47:54,200 Nate. Thanks for having me. Excited to be here. 779 00:47:54,260 --> 00:47:56,880 All right. So as I usually like to do, 780 00:47:56,880 --> 00:48:00,520 let's start with a little background because I'm guessing some of our listeners 781 00:48:00,520 --> 00:48:03,400 are, uh, unfamiliar with Touchstone Investments. 782 00:48:03,400 --> 00:48:07,640 Just give us a quick snapshot of who you are and why you decided to get involved 783 00:48:07,760 --> 00:48:08,550 with ETFs. 784 00:48:08,550 --> 00:48:12,760 Sure, no thanks. Uh, so Touchstone Investments has been around since 1994. 785 00:48:12,760 --> 00:48:17,720 We've got about 25 billion in assets under management with the addition, 786 00:48:17,720 --> 00:48:21,840 as you just mentioned, of our four ETFs. We now have 36, um, 787 00:48:21,840 --> 00:48:26,360 mutual funds and ETFs. Um, our model is, uh, 788 00:48:26,360 --> 00:48:31,320 we think unique. Uh, we work exclusively with institutional sub-advisors. Uh, 789 00:48:31,320 --> 00:48:35,960 we currently partner with 14 different sub-advisors to manage those 36 funds and 790 00:48:36,150 --> 00:48:38,160 ETFs, Uh, a little bit, uh, 791 00:48:38,160 --> 00:48:41,000 almost half of those that are eligible for a track record, 792 00:48:41,760 --> 00:48:45,680 13 of 'em are four and five star funds. Um, and so I, 793 00:48:45,830 --> 00:48:50,240 I think it's a great story that sometimes folks, you know, haven't heard. Uh, 794 00:48:50,240 --> 00:48:55,160 we are, uh, owned by Western and Southern, uh, which is a Fortune 400, uh, 795 00:48:55,160 --> 00:48:58,800 mutual life insurance company, um, headquartered in, in Cincinnati as well, 796 00:48:58,800 --> 00:49:03,480 that's been around since 1888. So, uh, we've got a very strong parent, um, 797 00:49:03,480 --> 00:49:08,480 that's really committed to the ETF business and being invested 798 00:49:08,480 --> 00:49:13,200 in the ETF business. And so the reason we got into ETFs is we've, 799 00:49:13,200 --> 00:49:16,400 you know, just like everyone else, we've seen this, you know, incredible flows, 800 00:49:16,610 --> 00:49:18,320 uh, into the ETFs. Uh, 801 00:49:18,320 --> 00:49:21,920 we know from an asset management distribution standpoint, 802 00:49:21,920 --> 00:49:25,920 we want to have not only mutual funds, but also ETFs for our clients, uh, 803 00:49:25,920 --> 00:49:26,740 to use. And, 804 00:49:26,740 --> 00:49:31,680 and certainly we're excited to bring our unique brand of active management 805 00:49:32,000 --> 00:49:34,640 distinctively active, uh, to the ETF wrapper. 806 00:49:34,830 --> 00:49:39,800 Your collaboration with subadvisors definitely jumped off the page at 807 00:49:39,800 --> 00:49:44,680 me as I was looking at, at Touchstone. Uh, why do you like that model? 808 00:49:44,680 --> 00:49:48,280 I know the goal here is to partner with best in class managers to sub advice 809 00:49:48,280 --> 00:49:50,320 funds. What do you see as the value of doing that? 810 00:49:50,710 --> 00:49:55,520 Well, it's, it's the way we've always done it. So when we started in 1994, um, 811 00:49:55,520 --> 00:49:58,240 one of our first partners was Westfield Capital Management, 812 00:49:58,240 --> 00:50:01,960 still one of our partners today. We just really believe that it's, 813 00:50:01,960 --> 00:50:06,720 it's hard for one asset manager to be the very best in 814 00:50:06,720 --> 00:50:07,800 all the categories. 815 00:50:07,800 --> 00:50:11,480 It's hard to be a great large cap value manager and also a great large cab 816 00:50:11,480 --> 00:50:13,240 growth manager. And then, by the way, 817 00:50:13,240 --> 00:50:17,160 what about small and mid-caps and then international and, you know, the, 818 00:50:17,160 --> 00:50:20,320 the list goes on and on. So when you're partnering with, um, you know, 819 00:50:20,320 --> 00:50:24,240 best in class institutional money managers who really have demonstrated long 820 00:50:24,240 --> 00:50:28,480 term success in implementing truly active strategies, um, 821 00:50:28,810 --> 00:50:30,560 we think it's a, it's a great model, 822 00:50:30,780 --> 00:50:35,560 and oftentimes advisors and investors aren't able to typically access, 823 00:50:35,730 --> 00:50:38,880 uh, a lot of these institutional money managers. So, again, 824 00:50:38,880 --> 00:50:42,440 hard to be great in every asset class. And, and we think this model, uh, really, 825 00:50:42,470 --> 00:50:46,960 really works well to, to give you a competitive lineup across all asset classes. 826 00:50:47,270 --> 00:50:51,920 Okay. So I noted at the top the Touchstone Strategic Opportunities etf, ticker, 827 00:50:52,160 --> 00:50:54,720 s I o. Let me tee up the other three products here. 828 00:50:54,720 --> 00:50:59,040 So there's the Touchstone Dividend, Select etf, ticker DV and D, 829 00:50:59,340 --> 00:51:04,320 the Touchstone US large Cap focused etf, ticker lcf, and then the, 830 00:51:04,320 --> 00:51:08,440 uh, Touchstone Ultra Short Income etf, ticker T si. 831 00:51:08,780 --> 00:51:12,120 And certainly feel free to delve into any of these in detail, 832 00:51:12,120 --> 00:51:16,120 but I'd love to hear more about why these particular strategies coming out of 833 00:51:16,120 --> 00:51:17,640 the gate, why these four ETFs? 834 00:51:17,710 --> 00:51:21,760 Sure. No, uh, great question. Um, all four of these products, uh, 835 00:51:21,760 --> 00:51:24,520 are managed by Fort Washington Investment Advisors, 836 00:51:24,520 --> 00:51:28,880 which is also a subsidiary of Western and Southern, Um, Fort Washington, uh, 837 00:51:28,880 --> 00:51:32,480 manages approximately 80 billion, has been around since 1990. 838 00:51:32,740 --> 00:51:35,040 And I think most important for us, um, 839 00:51:35,390 --> 00:51:37,760 I tell advisors and clients all the time, 840 00:51:37,760 --> 00:51:40,680 when you're in Cincinnati and you're on the Touchstone Investments, 841 00:51:40,680 --> 00:51:41,840 we're on the 11th floor, 842 00:51:42,070 --> 00:51:44,560 Fort Washington Investment Advisors is on the 12th floor. 843 00:51:44,570 --> 00:51:49,200 So not only do they have a great long term track record in each of these 844 00:51:49,200 --> 00:51:53,560 asset classes, but when you're launching your first ETFs, it's great to have, 845 00:51:53,810 --> 00:51:58,360 uh, you know, the connectivity with the folks, you know, right upstairs. 846 00:51:58,360 --> 00:52:02,000 So that's the reason we went with Fort Washington Investment Advisors to, uh, 847 00:52:02,000 --> 00:52:03,280 to launch our first products. 848 00:52:03,780 --> 00:52:07,720 And do you wanna pick an ETF or two to maybe delve into in a bit more detail 849 00:52:07,720 --> 00:52:11,120 just to give us there an idea in terms of how you're approaching a particular 850 00:52:11,120 --> 00:52:11,590 market? 851 00:52:11,590 --> 00:52:15,160 Yeah, sure. So again, all of our strategies are, um, 852 00:52:16,040 --> 00:52:18,600 distinctively active. And, and so I, I'd love to just spend a, you know, 853 00:52:18,600 --> 00:52:19,433 a minute on, 854 00:52:19,530 --> 00:52:23,520 on distinctively active and then just kind of talk about the equity and fixed 855 00:52:23,520 --> 00:52:26,520 income, uh, ETFs, uh, that, that we offer. 856 00:52:26,570 --> 00:52:31,520 So folks often ask me, you know, what is distinctively active? And, you know, 857 00:52:32,130 --> 00:52:33,200 in its simplest form, 858 00:52:33,200 --> 00:52:37,280 active means not passive or not cab weighted indexing. 859 00:52:37,280 --> 00:52:42,160 And our distinctively active strategies are those that we've found have a 860 00:52:42,160 --> 00:52:46,080 historical track record of generating alpha and a high active share. 861 00:52:46,420 --> 00:52:51,080 And when I think, you know, when I talk to advisors, uh, and their clients, 862 00:52:51,630 --> 00:52:53,800 I think there's a little bit more of a, 863 00:52:54,050 --> 00:52:59,000 of an acceptance for active fixed income as a, as an asset class, being able to, 864 00:52:59,000 --> 00:53:01,320 uh, deliver alpha. But, uh, 865 00:53:01,320 --> 00:53:05,360 we also think you can find really good active managers on, on the equity side, 866 00:53:05,810 --> 00:53:10,200 um, and a lot of equity strategies. I know, um, I think it was on last week's, 867 00:53:10,200 --> 00:53:13,480 uh, podcast, you were, you were talking about the spiva results. You know, 868 00:53:13,480 --> 00:53:17,840 a lot of times when you start eliminating closet indexers or you eliminate, 869 00:53:17,840 --> 00:53:21,680 you know, large, you know, bloating, what we call bloating, you know, high aum, 870 00:53:21,680 --> 00:53:26,680 that eliminates a portfolio manager's ability to invest in the entire universe 871 00:53:27,090 --> 00:53:30,320 or, you know, just dilution with a lot of, you know names. 872 00:53:30,470 --> 00:53:35,200 When you start eliminating some of those, uh, characteristics from the active, 873 00:53:35,370 --> 00:53:39,640 um, manager universe, especially on the equity side, you then start to see that, 874 00:53:39,640 --> 00:53:43,880 you know, there is a really good track record, uh, for active, uh, managers. 875 00:53:43,880 --> 00:53:47,440 And so on the equity side, we launched two ETFs, as you mentioned. 876 00:53:47,440 --> 00:53:51,160 One is large cap focus. Um, this is, uh, what I would, you know, 877 00:53:51,160 --> 00:53:54,240 simply say is a kind of a moat, uh, investment strategy. 878 00:53:54,600 --> 00:53:57,280 We're looking to build a portfolio, uh, 879 00:53:57,280 --> 00:54:02,240 that's made up of businesses that have high sustainable barriers to entry with 880 00:54:02,240 --> 00:54:04,000 also high returns on capital. 881 00:54:04,340 --> 00:54:09,040 And to buy these businesses at a discount to their intrinsic value, um, and, 882 00:54:09,040 --> 00:54:12,200 and kind of own those names for, for a long period of time. 883 00:54:12,200 --> 00:54:16,000 And we think that's a, a great way to diversify investors holdings, 884 00:54:16,000 --> 00:54:20,320 especially in that large cap space where so many folks tend to just, you know, 885 00:54:20,370 --> 00:54:25,120 go to, uh, go to an index on the, uh, dividend side. We're, uh, 886 00:54:25,120 --> 00:54:28,800 we're excited not only by the ticker DV n d, uh, which uh, 887 00:54:28,800 --> 00:54:32,240 we were excited to see was, was available and out there, but, and act, 888 00:54:32,240 --> 00:54:35,640 there's not many actively managed, uh, dividend strategies. 889 00:54:35,640 --> 00:54:37,680 And so what this strategy does, 890 00:54:37,680 --> 00:54:41,080 it's actually sector neutral to the s and p 500. 891 00:54:41,330 --> 00:54:46,120 So it doesn't take on some of the traditional dividend ETF biases that can 892 00:54:46,120 --> 00:54:46,880 be, you know, 893 00:54:46,880 --> 00:54:50,600 overweight to utilities and staples and healthcare and some of the other 894 00:54:50,600 --> 00:54:52,640 defensive names. And then, you know, 895 00:54:52,640 --> 00:54:55,280 as folks have probably seen this year when you're, again, 896 00:54:55,280 --> 00:54:59,720 when you're sector neutral, you're not subject to, you know, perhaps a day like, 897 00:54:59,720 --> 00:55:03,240 you know, last week in the market where certain sectors energy are, 898 00:55:03,240 --> 00:55:07,760 are really under, uh, under pressure because of the price of oil. So, you know, 899 00:55:08,010 --> 00:55:12,200 growing dividends, having, having a product where you can, you know, 900 00:55:12,200 --> 00:55:16,880 exceed the s and p 500, but not sacrificing, uh, you know, 901 00:55:16,880 --> 00:55:21,280 broad capital market exposure by diving into just, you know, 902 00:55:21,280 --> 00:55:24,680 one or two, you know, sectors. For big overweights, we think is a, 903 00:55:24,680 --> 00:55:28,880 is a great way to get, uh, dividend exposure, especially, uh, 904 00:55:28,880 --> 00:55:32,600 in this environment. So, uh, tho, tho that's the story on the, 905 00:55:32,810 --> 00:55:37,240 on the equity side. Over on the fixed income side, we've got two products. 906 00:55:37,240 --> 00:55:41,400 The ultra short income, probably where we're spending most of our conversations, 907 00:55:41,400 --> 00:55:44,800 because I think folks right now are looking for more income. 908 00:55:44,800 --> 00:55:48,440 They're looking to shorten up duration. Uh, we think this is a, 909 00:55:48,440 --> 00:55:51,680 this is a great strategy, uh, for folks to take a look at. 910 00:55:51,890 --> 00:55:55,640 It always has a duration of less than one year, currently, um, 911 00:55:55,640 --> 00:55:57,160 about 0.6 right now, 912 00:55:57,300 --> 00:56:02,200 and we think this fits really well for what we call inside out, uh, investing. 913 00:56:02,290 --> 00:56:03,400 Uh, so, you know, 914 00:56:04,120 --> 00:56:08,720 these are cash investors who might wanna hire yield than what they're currently 915 00:56:08,720 --> 00:56:10,680 getting inside their money market fund. 916 00:56:10,680 --> 00:56:13,160 So they're willing to take on a little bit more risk. 917 00:56:13,420 --> 00:56:18,080 And then the sort of the outside in is folks who are looking at their core bond 918 00:56:18,320 --> 00:56:20,440 exposure this year, looking at, uh, 919 00:56:20,440 --> 00:56:22,920 some negative returns in that area and thinking, Okay, 920 00:56:23,160 --> 00:56:25,960 I wanna shorten up duration, but I don't wanna give up income. 921 00:56:26,030 --> 00:56:30,720 I don't wanna give up, uh, my total return. This is a strategy that, uh, 922 00:56:30,750 --> 00:56:32,600 when you go back and look at it over time, 923 00:56:32,600 --> 00:56:37,440 has actually been able to deliver about 80% of the Barclays Ag with about 924 00:56:37,440 --> 00:56:42,000 20% of the risk. So really fits interestingly in this environment. 925 00:56:42,140 --> 00:56:45,080 And then finally, the first one we launched Strategic Income Opportunity. 926 00:56:45,320 --> 00:56:50,080 S i is really our best idea of fixed income portfolio from Fort Washington. 927 00:56:50,630 --> 00:56:54,320 I, I would put it in the multi-sector bond category, 928 00:56:54,370 --> 00:56:57,880 or the core plus plus category. So, um, you know, 929 00:56:57,880 --> 00:57:00,800 up to 50% can be in non-investment grade. 930 00:57:01,450 --> 00:57:05,720 It does have very specific guidelines on how much high yield or how much 931 00:57:05,960 --> 00:57:08,920 emerging market debt. Uh, it can, it can own, You know, 932 00:57:08,920 --> 00:57:13,000 Fort Washington manages a little bit over, uh, 50 billion in, in fixed income. 933 00:57:13,000 --> 00:57:16,640 So really a strength, uh, with Fort Washington investment advisors. 934 00:57:16,910 --> 00:57:18,640 Rich, just a couple of minutes left. 935 00:57:18,640 --> 00:57:22,040 You mentioned the speed of scorecard that I covered last week. You, 936 00:57:22,040 --> 00:57:23,280 you were trying to get ahead of me here. 937 00:57:23,280 --> 00:57:27,160 You probably knew I was gonna bring this topic up, but I, I do want to ask you, 938 00:57:27,160 --> 00:57:29,480 and I know this is a little bit of a, uh, 939 00:57:29,480 --> 00:57:32,960 cliche question around active management, but look, I, 940 00:57:32,960 --> 00:57:35,840 I know you're well aware of all the data that's out there showing how difficult 941 00:57:35,840 --> 00:57:39,880 it is for active managers to consistently generate outperformance. And, 942 00:57:39,880 --> 00:57:44,480 and you alluded to this earlier, I mean, I look at, uh, DV and D and lcf. 943 00:57:44,540 --> 00:57:49,120 One thing that is clear on both of those, these are much higher active share, 944 00:57:49,120 --> 00:57:51,520 higher convict, uh, conviction strategies, d, 945 00:57:51,610 --> 00:57:55,520 db and D that can hold between 40 and 55 companies, uh, 946 00:57:55,800 --> 00:57:57,520 lcf between 25 and 45. 947 00:57:57,520 --> 00:58:01,360 So I think that gives listeners a really good feel that these aren't closet 948 00:58:01,360 --> 00:58:05,520 index funds, but, but is that really where the difference comes in? 949 00:58:05,520 --> 00:58:08,360 So if you have, you know, first Washington as a subadvisor, 950 00:58:08,360 --> 00:58:10,120 these are higher conviction strategies. 951 00:58:10,290 --> 00:58:13,920 Is that what you think differentiates you from the market and gives you a shot 952 00:58:13,920 --> 00:58:16,840 at generating out performance longer term? Because again, the, 953 00:58:16,840 --> 00:58:19,360 the data we've all seen it, it is difficult to, to, 954 00:58:19,360 --> 00:58:22,720 to generate out performance consistently over long periods of time. 955 00:58:23,250 --> 00:58:27,120 No, no. I, I, I think this is, I think this is the environment where folks are, 956 00:58:27,250 --> 00:58:31,120 uh, you know, expanding their opportunity set or product set to look, you know, 957 00:58:31,120 --> 00:58:35,640 all across, um, and looking at, you know, more, you know, active, 958 00:58:35,850 --> 00:58:39,920 uh, ETFs. In fact, I mean, you look at the first half of this year, um, yes, 959 00:58:39,920 --> 00:58:43,520 still dominated, uh, on the equity side, still dominated by, you know, 960 00:58:43,520 --> 00:58:48,000 plain vanilla, uh, ETFs. But you're starting to see, you know, active, 961 00:58:48,250 --> 00:58:53,120 uh, ETFs gathering almost 15% of flows, uh, 962 00:58:53,120 --> 00:58:56,320 you know, through the first half of the year. So I think folks are looking for, 963 00:58:56,340 --> 00:59:00,000 you know, high active share, high conviction strategies, um, 964 00:59:00,000 --> 00:59:01,840 that they can use to, again, 965 00:59:01,840 --> 00:59:04,560 either compliment a little bit to what they're doing on the, you know, 966 00:59:04,720 --> 00:59:07,440 on the passive side, uh, but really, you know, 967 00:59:07,440 --> 00:59:11,840 look for that demonstrated ability to outperform or protect a little bit more on 968 00:59:11,840 --> 00:59:15,760 the downside, especially with the volatility, uh, that we've seen this year. 969 00:59:16,030 --> 00:59:20,360 Rich, before I let you go, uh, what's next for Touchstone etf? 970 00:59:20,360 --> 00:59:24,080 Should we expect more launches anytime soon? Obviously, you know, these four, 971 00:59:24,080 --> 00:59:26,880 you're off to a great start. Uh, just in terms of, you know, 972 00:59:26,880 --> 00:59:29,640 you look at the assets and these products, what, what should we, uh, 973 00:59:29,640 --> 00:59:30,473 expect moving forward? 974 00:59:30,750 --> 00:59:34,200 Well, listen, we're really excited to be, uh, in the ETF space. 975 00:59:34,200 --> 00:59:38,440 We're excited about these first four products. Uh, and we are talking to all of, 976 00:59:38,440 --> 00:59:42,240 uh, those subadvisors that I mentioned about our ETF initiative. 977 00:59:42,240 --> 00:59:45,080 There's a lot of excitement, uh, you know, from the subadvisors, 978 00:59:45,080 --> 00:59:49,720 but we're also looking at our entire product lineup and seeing where we do have 979 00:59:49,720 --> 00:59:54,240 gaps, um, and thinking about perhaps when we launch a new product, 980 00:59:54,450 --> 00:59:54,800 uh, 981 00:59:54,800 --> 00:59:57,920 whether it be in some of the categories that we've seen growth this year or over 982 00:59:57,920 --> 01:00:00,240 the past couple years, like thematic, uh, 983 01:00:00,480 --> 01:00:03,480 we're looking not only at the mutual fund wrapper, but also the, uh, 984 01:00:03,480 --> 01:00:06,840 the ETF wrapper. So, um, a lot of exciting things, uh, 985 01:00:06,840 --> 01:00:08,880 and I think you'll hear more from us, um, you know, 986 01:00:08,880 --> 01:00:10,680 later this year or into 2023. 987 01:00:10,710 --> 01:00:13,280 Well, Rich, greatly enjoy the conversation. 988 01:00:13,280 --> 01:00:15,680 Certainly wish you the best of luck with the ETF lineup. 989 01:00:15,760 --> 01:00:17,360 Thank you for joining me this week. 990 01:00:18,110 --> 01:00:20,160 Thanks Nate. Appreciate being on. 991 01:00:20,470 --> 01:00:25,440 That was Rich Kerner Senior ETF sales Specialists at Touchstone Investments. 992 01:00:26,260 --> 01:00:30,250 That'll do it for this week's ETF Prime. I wanna thank one of our sponsors, 993 01:00:30,250 --> 01:00:34,370 Capital Group. If you would like to learn more about Capital Groups ETFs, 994 01:00:34,370 --> 01:00:38,130 you can visit capital group.com/etfs. 995 01:00:38,640 --> 01:00:42,170 Next week. All be joined by Matt Piro, 996 01:00:42,230 --> 01:00:46,250 who is Vanguard's global head of ESG product. 997 01:00:46,530 --> 01:00:51,130 We're gonna look at their ESG ETF lineup and discuss the, uh, 998 01:00:51,380 --> 01:00:56,250 broader ESG landscape. I think everyone knows always one of my favorite topics, 999 01:00:56,250 --> 01:01:00,370 so certainly, uh, join me for that. Until then, have a great week.