Exponential Etfs Exceptional Podcast

Ben Johnson, Director of Global Research at Morningstar joins Phil for a deep conversation about career and ETFs. They discuss: After a false start in architecture, Ben discovered finance Investing lessons from collecting baseball cards as kids Morningstar’s ETF rating approach, including classifications Persistence of top rated funds and predictive value of the ratings How to rate portfolios of ETFs, and Morningstar’s new portfolio rating service Ben defends market cap weighting, Phil makes the case that investors can do better Morningstar’s conference and why the ETF and mutual fund conferences were merged The outlook for non-transparent ETFs The obstacle Ben had to overcome to move his career forward

Phil heads to the Arizona forest to talk to “Random Roger” Nusbaum about ETFs, blogging and being a fire chief. The discussion includes: Discovering ETFs early on The sweet spot for thematic ETF investing Correlations in up/down markets Active versus passive “does not matter” How active and passive can coexist in portfolios Buying closed end funds Incorporating bitcoin into broad portfolios The ETF Maven blog Roger’s health tips

Catherine Wood and Tom Staudt from Ark Invest join Phil to talk about the early days of Ark Invest and how they built their business. Cathie tells the story of her eureka moment when she had the idea for disrupting the asset management industry and how she battle-tested the idea. Tom tells us how he met Cathie and ultimately got an offer letter filled with exclamation points! Cathie and Tom talk about the early lean years, how the firm pivoted, and how her conviction and confidence in the firm and in her bold calls has never wavered. Cathie reveals how she manages criticism from twitter trolls and what it’s like to become a meme, and being memed. The conversation then moves to copycat funds and Tom explains how imitation from big firms is a form of validation.

Craig Lazzara from S&P joins Phil to talk about the growth in factor investing. Craig shares highlights from the latest factor research from S&P which leads to a discussion about chasing factors, the crowding effect, and whether choosing factors is different than actively choosing stocks. Craig then explains why S&P constituents are chosen by committee. The conversation continues to SPIVA and performance of active managers during down markets. Craig talks about the lottery effect and then Phil talks about the Winner’s Curse. Finally, Craig explains why the bow tie became his signature look and what job he would love to have if he could not work in finance.

Drew Voros joins Phil to reflect on over 25 years in journalism and the state of the news industry. Phil draws parallels to the financial services industry in recent years. Drew emphasizes the importance of building credibility and how that remains the key focus at etf.com. Drew explains how financial journalism is distinguished from the broader field. They discuss twitter and how the digital age both helps and hurts journalism. Phil tells a story about how a dinner with Ben Hunt showed him that online communications can be deeper than in-person. Drew then talks about incorporating multi-media such as video and podcasts onto the site and concludes with what content works best on etf.com.

Phil is joined by his old boss and mentor, Laura Morrison. Laura talks about her career at NYSE and how she left NYSE to build an ETF listing venue at CBOE. She discusses the challenges in building a business line from the ground up, and how the exchange has led the ETF industry on countless market structure initiatives. Laura then breaks the news of CBOE’s new market maker incentive program, which can be the catalyst for significant market quality improvements in ETF trading. They discuss the exchange’s value proposition and why competition among listing exchanges is so fierce. Phil notes that Laura’s teams are defined by their scrappiness, and then Laura explains her leadership style and how trusting and empowering employees can be the best way to motivate them. The conversation closes out with Laura’s love of classic cars and which classic car is her all time favorite.

Phil is joined by Sam Huszczo, founder of SGH Wealth Management. Sam talks about how he modernized SGH Wealth Management, and how using single factor ETFs were instrumental in that transition. They talk about Sam’s time as head of the CFA Society of Detroit, and what a local chapter head does. The two debate whether the factor framework is replacing classic securities valuation models, and why multi-factor ETFs can water down the point of using smart beta funds. The two talk about ETF sales models and what adds value to Sam and his practice, and round out the conversation with a look at regulation in the industry and some buzz about what is happening in Detroit.

Ed Lopez, Head of ETF Product at Van Eck joins Phil. The two reminisce on their days working together at Rydex Investments and then talk about how marketing and product management are intertwined. They talk about alternative investments, including gold, bitcoin and inflation hedges, and about which products they love. Finally, they round out the conversation with career advice and observations from their years working in the ETF industry.

Linda introduces the new initiative from Women in ETFs: the Speaker’s Bureau program which connects conference organizers and media bookers with female leaders in the industry. Linda then shares her journey which began in China and continued in Canada and the US and ultimately had personal experiences that led her to focus on environmental issues and founding Purview. Linda makes the case that ESG as an investment factor can lead to portfolio outperformance and discusses Purview’s framework for evaluating investments. Phil and Linda then discuss Chinese Hot Pot and where to find authentic Chinese food, and then discuss a number of macro issues facing China, including the trade war and sovereign debt. Linda then shares some context about how and why she helped to start Women in ETFs and the organization’s mission. To learn more about the Women in ETFs Speaker Bureau program please email Elizabeth Kashner atekashner@factset.com or Linda at linda.zhang@purvewinvestments.com.

Phil and Charles enjoy a Manhattan to reflect on three years of Exponential ETFs.

Phil and Jason Raznick sit down in the middle of the Benzinga offices, in the middle of downtown Detroit as Jason welcomes Exponential ETFs to the neighborhood, having just moved offices from Ann Arbor to Detroit. Jason talks about how Benzinga got started and makes the pitch for businesses to come to Detroit. The two talk about old media versus new media, trading versus investing, and whether trading signals still work. Jason shares his management style and his thoughts on how a company can come together and how people can make a big impact by showing some extra hustle.

Phil and Christian talk about ETF issuers supporting each other, and then attack the misconception that assets under management are a fair measure of ETF liquidity. They take turns drafting specific ETF misconceptions and explain why those misconceptions are wrong. The two end with an explosive rant about anti competitive issues in the ETF industry and how those issues can harm ETF investors down the road.

Phil and Josh are joined by Benjamin Lavine, CIO of 3D Asset Management, a TAMP platform and model portfolio provider. Ben shares his macro outlook in light of the recent yield curve inversion and global events and shows where how the global markets are showing mixed signals. After walking through the macro environment, Ben shares some recent research about the leveraged loan market which leads to a discussion on how to evaluate corporate credit and the efficacy of the rating agencies. The three debate using quantitative factors for evaluating credit risk, as opposed to relying on the rating agencies. Finally, the discussion goes back to the ETF industry and how smart beta funds are a way to use those quantitative factors in place of traditional active management.

Phil talks with Teddy Fusaro, COO of Bitwise Asset Management about Teddy’s transition from the ETF industry to being a CryptoCurrency innovator. Phil hits Teddy with some tough questions about the viability of crypto currency, and the two discuss innovation, the future of payments, and the Wisdom of Bitwise board member Naval Ravikant. The conversation circles back to ETFs and why the ETF market is tougher now than ever before, and how Phil and Exponential plan to navigate the storm in the asset management industry.

Phil and Josh get quanty with Patrick Gelshenen, Execusitve Directive of TOBAM. They discuss quantitative portfolio factors, and whether market cap weighting is itself a factor. The three discuss when market cap weighting tends to perform well, and when it doesn’t. Patrick emphasizes his firm’s approach to diversification while Phil and Josh wonder if the market environment has contributed to the idea that market cap weighting is sufficient as an investment thesis.

Phil sits down for a one on one talk with Deborah Fuhr, Managing Partner, ETFGI & Co-Founder Women in ETFs, to learn how she became the leader in ETF research. Debbie goes on to discuss the origins of Women in ETFs and why women are under-represented in the financial services industry. They talk about Women in ETFs’ mission and how it is having an impact. Finally, they discuss the global reach of ETFs and how the popularity of ETFs is extending well beyond the United States.

Phil is joined by Tyrone Ross of NobleBridge Wealth and Michael Venuto of Toroso Investments. The crew starts off by discussing how to mix venture capital with traditional asset allocation models (1:16), and Mike tells us about the new Millennial Permanent Portfolio (5:20). Phil brings up Fintech and wonders why ETFs are not considered part of the Fintech genre (5:58). The Fintech discussion leads into Crypto (10:15) and Mike and Tyrone make the bullish case to Phil, who is the crypto skeptic. Finally, Tyrone shares his back-story and why he makes sure to express gratitude on a regular basis (26:10).

Exponential ETFs’ CEO Phil Bak is joined in studio by Reggie Browne - Senior Managing Director of the ETFs Group at Cantor Fitzgerald and Joanne Hill - Head of Research and Strategy at CBOE Vest. Tune in to hear these industry titans discuss what makes ETFs attractive to institutional clients, the ways that institutional investors utilize ETFs and how that adoption curve has differed from the retail market. The guests discussed Jack Bogle’s legacy and then explored how the market’s trading architecture need to be adjusted in order to keep up with the speed and ease which technology has brought to trading? What levers can be pulled to adapt a market originally built for stocks, to accommodate ETFs and other investment innovations that make up an increasing portion of total trading volume? Find out what is truly important when judging ETF liquidity, how options are the newest frontier in ETF portfolio construction. 

It’s the Best of the ETF Experience Podcast! We go back and listen to conversations from: Aye Soe, S&P DJ Indexes Erica Balchunas, Bloomberg Michael Batnick & Nick Maggiulli, Ritholtz Wealth Management Chris Hempstead, Deutsche Bank Todd Rosenbluth, CFRA Research Joe Smith, CLS Investments Michael Venuto & David Dziekanski, Toroso Asset Management David Nadig, ETF.com Steven Schoenfeld, BlueStart Indexes Claes Fornell, ACSI Tom Lydon, ETF Trends Christian Magoon, Amplify ETFs And finally, Phil and Kevin’s great pizza debate.

Exponential ETFs Chief Strategist Kevin Quigg and Director of Capital Markets Josh Blechman take inventory of Exponential ETFs’ 2018 research, articles and blog posts to grade ourselves on what we themes we hit and which we missed during this up and down market year. We examine the role played by the “Size” factor, looked back at FAANG throughout the year including what drove the uncoupling of the trade. We analyze the changing definition of “Cheap” as It pertains to value stocks and discuss efficient means of accessing those factors in the market. Additionally, listen to learn about the core value proposition behind Amazon’s Empire, if the ETF market place has a hidden Achilles heel and in what industries do we see opportunity moving forward.