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Can Corgi Become the Walmart of ETFs? · Trillions

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  Speaker 1: Bloomberg Audio Studios, podcasts, radio, news.
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  Speaker 2: Any firm that has a legacy mutual fund business and
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  Speaker 2: an ETF business at the same time, there's fiefdoms, there's
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  Speaker 2: conflict sometimes. Just run it lean and mean, make an attempt,
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  Speaker 2: keyword attempt, to be the Walmart of the industry and
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  Speaker 2: see if it's a success. Not going to be easy,
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  Speaker 2: but we're going to give it a shot.
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  Speaker 3: Welcome to Trillions. I'm Joel Weber.
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  Speaker 1: And I'm Eric Balchunas.
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  Speaker 3: Eric, there's a company we've been talking about all year.
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  Speaker 3: It's a total anomaly, different strategy than we've ever seen
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  Speaker 3: in ETFs before. And it's got by far the most
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  Speaker 3: memorable mascot in investing.
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  Speaker 4: Yeah, they're a fascination, I think, to everybody. Because you
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  Speaker 4: have this ETF industry, and as you know, it's really hard.
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  Speaker 4: But if you try really hard and you hang in there,
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  Speaker 4: you can make it. But it's a difficult industry because
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  Speaker 4: you got to get assets the hard way. You got
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  Speaker 4: to sell your ETF. There's no distribution fees. So That's
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  Speaker 4: why I call it the Terradome and there's 300 issuers, yada, yada.
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  Speaker 4: But anyway, here comes an issuer, Indy, out of nowhere,
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  Speaker 4: they launch hundreds of ETFs right off the bat. And
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  Speaker 4: that issuer is Corgi, if you haven't guessed. And they've
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  Speaker 4: got this cute little mascot of a dog. They've got
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  Speaker 4: these cafes. They're from San Francisco. They're younger. And it's
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  Speaker 4: almost like a company that doesn't know what it doesn't
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  Speaker 4: know regarding how tough the industry is. And so several
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  Speaker 4: times they've come up because... we've seen like, oh my God,
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  Speaker 4: they broke the record for launches in a day. They
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  Speaker 4: broke the record for launches.
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  Speaker 2: In a month.
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  Speaker 1: How are they going to sell all these? What's going on?
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  Speaker 1: And so we've met a couple people from there. One
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  Speaker 1: of my friends, Ed Rommel works there and Nico was
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  Speaker 1: on ETF IQ. That's the CEO.
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  Speaker 4: I was actually out in San Francisco a couple of
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  Speaker 4: weeks ago and Erica Lee met me there. I went
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  Speaker 4: to the Corgi Cafe. They have like one of those
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  Speaker 4: machines where you can drop the thing to pick up
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  Speaker 4: the toy.
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  Speaker 3: The dropper thing that comes down.
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  Speaker 1: Yes, they have one of those.
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  Speaker 2: The claw.
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  Speaker 3: Yes.
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  Speaker 4: And she had the key because she was able to
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  Speaker 4: open it up because it got stuck on the side.
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  Speaker 1: But anyway, it was a fun time. We had a
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  Speaker 1: good time.
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  Speaker 3: We talked.
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  Speaker 1: There's a Corgi newspaper, which was interesting.
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  Speaker 4: So there's a very, very strong, interesting brand that is
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  Speaker 4: not your typical TradFi company. And that's, I think, why
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  Speaker 4: they're interesting, let alone the whole Launchathon.
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  Speaker 3: So our guest today, Jeff Winnegar, he's the chief investment
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  Speaker 3: officer at Corgi Invest. This time on Trillions, Corgi. Jeff,
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  Speaker 3: welcome to Trillions.
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  Speaker 2: My pleasure. I love the intro.
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  Speaker 3: OK, so I got to ask you, one of the
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  Speaker 3: things that has made Corgi very fascinating is that there's
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  Speaker 3: a lot of ETFs very quickly. Do you know how
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  Speaker 3: many ETFs Corgi actually has.
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  Speaker 2: In the marketplace? I'm going to say 207. Eric is
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  Speaker 2: sitting there looking at the phone. Is it 207?
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  Speaker 1: Yeah. It's a little over 200.
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  Speaker 2: But by the closing bell today, it might be 208, 209.
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  Speaker 1: But how many do you have filed? That could be
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  Speaker 1: around 350, 400. Yeah.
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  Speaker 2: And theoretically, before the year is over on many of those,
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  Speaker 2: and that becomes some of the products that could be
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  Speaker 2: More readily identifiable. I mean, a lot of the stuff
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  Speaker 2: so far has been the two Xs and the buffers.
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  Speaker 2: And this is the build out of the business by
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  Speaker 2: the end of the year.
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  Speaker 3: Do you guys have one of those like meters on
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  Speaker 3: the wall that like measures where you're at and where
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  Speaker 3: you're going?
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  Speaker 2: Oh, like a fundraiser?
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  Speaker 3: Yeah, exactly.
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  Speaker 2: No, we don't have anything like that. It's really funny
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  Speaker 2: because I found Corgi pretty much at random, guys. I mean,
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  Speaker 2: I said to myself in the middle of the summertime,
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  Speaker 2: you know, what's wrong with you, man? Are you out
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  Speaker 2: of touch with what's going on? got these people launching 100,
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  Speaker 2: 150 ETFs and you never heard of them. Shame on you.
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  Speaker 3: I'm guilty as well.
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  Speaker 2: This is what I say to myself. This is in
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  Speaker 2: like July. And so I started looking up these guys
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  Speaker 2: and I said, well, heck, they're in the loop. They're
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  Speaker 2: in Chicago. I'm in Chicago. So I had coffee with
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  Speaker 2: a guy named Tony Aukid who's over on the desk
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  Speaker 2: there and started seeing what's going on in the filings
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  Speaker 2: and seeing you guys on Twitter and what have you.
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  Speaker 2: And the first thing I saw was the country funds.
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  Speaker 2: that are not yet out, but there's going to be
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  Speaker 2: about three dozen of those. And I said, well, I
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  Speaker 2: have a pretty good history with country funds based on
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  Speaker 2: my prior work experience and like to go give it,
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  Speaker 2: give that a shot. Then I, you know, I sold
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  Speaker 2: the sector funds and started talking to the guys, started
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  Speaker 2: talking to Anthony over there and basically saying, Oh heck,
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  Speaker 2: we're going to come after all the line items. We're
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  Speaker 2: going to come after all the style boxes. Now guys,
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  Speaker 2: I mean, this is, if you think about what, what
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  Speaker 2: Eric was saying in the intro, terror dome, don't know
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  Speaker 2: what you don't know. There's a lot of that. I mean, there's,
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  Speaker 2: it's a big, big career risk to jump into this
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  Speaker 2: at 45 years old and take a shot with this stuff.
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  Speaker 2: And there is, there is a lot of those growing pains.
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  Speaker 2: The firm has been open for about a minute, right?
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  Speaker 2: I mean, so it's, it's exciting. It's kind of having
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  Speaker 2: the time of my life though. Okay.
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  Speaker 3: So I'm curious, how much champagne do you get if
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  Speaker 3: you guys hit the mark? Like, like what's the number
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  Speaker 3: that you're going for by the end of the year?
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  Speaker 2: In terms of AUM?
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  Speaker 3: AUM slash number of ETFs. Do you guys talk like
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  Speaker 3: this or is it just flood the zone as long
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  Speaker 3: as it takes?
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  Speaker 2: Well, there are numbers that are circulated around the office
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  Speaker 2: and circulated around San Francisco. Because remember, San Francisco is
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  Speaker 2: so much more the insurance business. And then we're over
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  Speaker 2: here a little bit on our island in Chicago, the
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  Speaker 2: ETF business.
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  Speaker 3: So, Corgi has an insurance business.
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  Speaker 2: Corgi is an insurance company.
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  Speaker 3: And then they were like, oh, let's do some ETFs.
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  Speaker 2: Yeah. It's a $ 5 billion unicorn. The ETF business is
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  Speaker 2: the side hustle, which is– think about that. Yeah. And so,
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  Speaker 2: here I come in.
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  Speaker 4: Yeah. Well, that's actually helpful too because you– the pressure
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  Speaker 4: isn't as dramatic because you have revenue coming in.
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  Speaker 2: Yes.
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  Speaker 4: This is when we used to write about the Wall
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  Speaker 4: Street banks coming in, like JP Morgan and Goldman.
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  Speaker 2: Mm-hmm.
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  Speaker 4: We used to be like, man, it's actually beneficial to
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  Speaker 4: have all these other business lines going on. Like JP Morgan,
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  Speaker 4: I think asset management might be like 14% of their
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  Speaker 4: total revenue. So the whole thing isn't relying on them
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  Speaker 4: selling this one ETF. They have time and they can
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  Speaker 4: even go a little cheaper. They can do some things.
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  Speaker 4: It seems like you have a little of that there.
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  Speaker 4: Plus you have injections of VC money also.
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  Speaker 2: Well, and then that's, I mean, the VC funding rounds
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  Speaker 2: seem to be coming every two or three weeks. And
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  Speaker 2: so there is that long runway. And then there's also that,
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  Speaker 2: I mean, at the risk, I'm going to say a
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  Speaker 2: name here and you can just shoot me in the face. Berkshire.
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  Speaker 3: Okay.
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  Speaker 2: I know it's kind of cheesy to do that. But
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  Speaker 2: there is this concept of Berkshire and Lowe's and some
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  Speaker 2: of these where you have the insurance company and then
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  Speaker 2: maybe you're using the float to invest. And so I
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  Speaker 2: think that that's one of the concepts. We're not out
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  Speaker 2: here saying we're Berkshire Hathaway. I mean, come on, that's ridiculous.
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  Speaker 2: But it makes sense.
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  Speaker 3: Why would an insurance company look at exchange-traded funds and
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  Speaker 3: be like, you know what, we should do? And then
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  Speaker 3: if you think about it with a certain other gaze
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  Speaker 3: also from the Midwest, maybe you could figure that out.
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  Speaker 4: Well, I mean, if you have people who want insurance–
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  Speaker 4: That's not the worst prospect to buy an ETF also.
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  Speaker 4: They're thinking about financial products. I mean, that makes sense
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  Speaker 4: to me.
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  Speaker 3: Okay, so we have to mention, you were at Wisdom
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  Speaker 3: Tree and you've been there for 10 years. You look over,
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  Speaker 3: the grass is slightly greener on this other side. You're
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  Speaker 3: super into it, but what's the magic switch in your
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  Speaker 3: mind that was like, this is the place I want
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  Speaker 3: to be?
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  Speaker 2: Well, I mean, if you look at where my mentality
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  Speaker 2: has been for some time with respect to, well, this
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  Speaker 2: is now ETF geekery on this one. That's a good
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  Speaker 2: thing with you two nerds.
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  Speaker 1: He's not fully there.
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  Speaker 2: There's at least 1.25 ETF.
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  Speaker 1: Let's go.
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  Speaker 3: Geek out.
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  Speaker 2: All right. Let's geek out. So think about earlier in
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  Speaker 2: our careers where you're launching an ETF and there's an
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  Speaker 2: expense ratio in your mind that you could pinpoint onto
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  Speaker 2: some mandate, U.S. equities, single factor- beta, something like that.
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  Speaker 2: And you can launch a product. And the year is
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  Speaker 2: 2000 or 2005 or 2010. And that product has an
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  Speaker 2: expense ratio. Now, typically, let's just say a 26-year-old product
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  Speaker 2: launched in the year 2000. Any product, I'm not thinking
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  Speaker 2: of anything in particular. That expense ratio might be what? 20, 25?
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  Speaker 2: I'm thinking out loud about some fund that exists that
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  Speaker 2: might have 5 or 10 billion in there. And then
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  Speaker 2: generally speaking, you have an index licensing agreement. And that's
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  Speaker 2: a negotiated situation. And then those are kind of the
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  Speaker 2: cash cow type ETF products that fund your business if
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  Speaker 2: you're a top five or top 10 issuer. Now, here
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  Speaker 2: comes Corgi and you're saying, okay, here, why don't you
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  Speaker 2: come by the office and meet the team? Well, the
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  Speaker 2: team can fit into one office. I mean, it's not
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  Speaker 2: like this, you've got a whole football field of people
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  Speaker 2: and you're reporting to this person who reports to that
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  Speaker 2: person who reports to that person. It's like, nope. My
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  Speaker 2: joke is, sitting at this table is 10% of the
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  Speaker 2: ETF business, right? It's like 10 of us, not many more.
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  Speaker 2: And then I'm saying, okay, well, if we launch all
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  Speaker 2: these funds, we can undercut on expense ratio. What percentage
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  Speaker 2: of the market can we obtain? This is the, I
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  Speaker 2: ask it as a question rather than a statement because
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  Speaker 2: I don't know the answer. But I think you get
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  Speaker 2: to a point in your career, 20 years in and
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  Speaker 2: you say, you know what? I'm going to take my shot.
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  Speaker 2: I got to take my shot. I think that there's
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  Speaker 2: just a lot of legacy assets. I've gone head to
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  Speaker 2: head with them at my prior firm. It's not easy.
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  Speaker 2: The major players, BlackRock, Vanguard, State Street, you could say
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  Speaker 2: Schwab and Fidelity too. I mean, these are forces to
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  Speaker 2: be reckoned with. And so that's one of the things
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  Speaker 2: where we're doing it with eyes wide open. Nobody's over
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  Speaker 2: here saying, oh yeah, Vanguard, that would be so easy.
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  Speaker 2: Let's just come after Vanguard. We're like, hey, let's challenge Vanguard.
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  Speaker 2: Let's see. Let's see if we can basically get people
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  Speaker 2: to recognize the Corgi brand, understand the way an ETF
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  Speaker 2: structure wraps around an index licensing agreement, and then go
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  Speaker 2: out into the marketplace. And I'll tell you what, here's
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  Speaker 2: the other thing. This is a question mark we think
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  Speaker 2: about day by day. Do you come after small RIAs?
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  Speaker 2: Large RIAs? No, no, no. Sovereign wealth funds? No, no, no. Retail?
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  Speaker 1: No, no, no.
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  Speaker 2: Small RIAs. And you go around the circle every week
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  Speaker 2: as a firm. You're questioning, where should we be going next? Oh,
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  Speaker 2: we had a win over here. I told you it
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  Speaker 2: was small RIAs.
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  Speaker 3: No, no, no.
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  Speaker 2: But look, we're live with this large RIA. Oh, but
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  Speaker 2: have you... What about Mercer? You know, all these various things.
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  Speaker 2: So it changes.
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  Speaker 3: So you're in full-on startup mode, it sounds like.
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  Speaker 2: Oh, it's startup. It's startup. I mean, there's not even
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  Speaker 2: a coffee machine in there, which is really weird because
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  Speaker 2: we have a corgi cafe. We don't have a coffee
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  Speaker 2: machine in Chicago. Unlike San Francisco.
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  Speaker 1: They probably want you to go to the cafe.
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  Speaker 2: Well, we're going to have one in Chicago.
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  Speaker 1: Yeah, there's one in New York.
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  Speaker 4: Scarlet Fu, who I co-host ETF IQ with, her eye
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  Speaker 4: doctor is next door to corgi in New York.
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  Speaker 2: Mm-hmm. On 27th. Yeah.
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  Speaker 4: And she sent me a picture and there were two
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  Speaker 4: dudes looking at a computer screen and it almost looked
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  Speaker 4: like an advertisement for like tech people working on stuff.
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  Speaker 1: So it was like in the wild though.
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  Speaker 4: It wasn't like they were, I was like, wow, it
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  Speaker 4: looks like they're posing for like, let's look like we're
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  Speaker 4: like working on a big problem here in the tech world.
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  Speaker 2: Well, there's this whole concept and look, I'm an ETF guy.
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  Speaker 2: I don't proclaim to know the Capital One Cafe business
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  Speaker 2: model and the Corgi Cafe, but Capital One has had
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  Speaker 2: those cafes for some time. And I think the mentality is,
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  Speaker 2: every time I walk down the street, there's a Capital
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  Speaker 2: One cafe. And I can go in there and do
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  Speaker 2: my banking. And boy, the coffee's really good. So maybe
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  Speaker 2: it increases the brand recognition. And with Corgi, you have
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  Speaker 2: brand recognition, right? It's iShares over here, Sector Spiders over there.
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  Speaker 2: And what Corgi? And Eric, you think about ETF people. Well,
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  Speaker 2: you know Corgi. And I know Corgi. And my old
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  Speaker 2: colleagues know Corgi, but of those 200,000 advisors, how many
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  Speaker 2: of them have heard of us? How many? And the
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  Speaker 2: answer is not as many as we sometimes suspect. So
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  Speaker 2: we have to build that.
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  Speaker 4: This is where you're going to have a challenge, which
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  Speaker 4: is that you have all these products, and some of
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  Speaker 4: them are cheaper. A lot of them are cheaper than
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  Speaker 4: the existing products, whether it's 2X or buffers or as
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  Speaker 4: your upcoming beta products.
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  Speaker 3: Mm-hmm.
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  Speaker 4: The issue is when you look at Schwab surveys of advisors,
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  Speaker 4: they tend to put fee and brand as their top
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  Speaker 4: two things when picking an ETF.
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  Speaker 1: Like what's the most important to you?
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  Speaker 4: Brand is where you'll have to really work hard.
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  Speaker 2: Yeah.
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  Speaker 4: That said, while you're working on that, you can have
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  Speaker 4: some hits with, I think, thematic ETFs. Like your biggest
• 12:26
  Speaker 4: one is a photonics ETF. Right. Because that can go
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  Speaker 4: direct to retail. So I think that's what will probably
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  Speaker 4: happen here. You'll probably need some theme hits to pay
• 12:34
  Speaker 4: the bills for a little bit or at least give
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  Speaker 4: you some energy. The other stuff will take a little longer.
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  Speaker 4: If you hang in there, though, you can do it.
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  Speaker 4: I just think it's 200 ETFs in a year. Let
• 12:43
  Speaker 4: me just go over that, how weird that is. So
• 12:44
  Speaker 4: WisdomTree is where you came from.
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  Speaker 3: And it's going to go up.
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  Speaker 2: Yeah.
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  Speaker 3: I mean, we've got time still.
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  Speaker 1: How old is WisdomTree? Like 15 years?
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  Speaker 3: 20?
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  Speaker 2: WisdomTree had their June 2006 launches. Just celebrated the 20th birthday.
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  Speaker 3: 20 years.
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  Speaker 1: They have 95 ETFs. So Corgi has 208 in like, what,
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  Speaker 1: eight months?
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  Speaker 2: Yes.
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  Speaker 4: And 400 registered. So let me just, they're now the
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  Speaker 4: sixth or seventh issue with the most products. If they
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  Speaker 4: were to put the 400 on the market, they would
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  Speaker 4: pass BlackRock.
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  Speaker 3: Which could happen this year even.
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  Speaker 1: Which could happen. And that is where it's so fascinating.
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  Speaker 4: And so my colleague, Athanasios Seraphagos, wrote a note about
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  Speaker 4: you guys and he said, look, I kind of get it.
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  Speaker 4: You need a flagship product. Most of these firms that
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  Speaker 4: have made it, they had a flagship and that flagship
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  Speaker 4: really carried them a long way. What you're doing is
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  Speaker 4: you're trying to decrease the amount of time it finds
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  Speaker 4: to find your flagship by just spraying the.
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  Speaker 1: Market with all these products.
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  Speaker 3: Spaghetti on the wall.
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  Speaker 4: So you're trying to almost like speed up getting that flagship.
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  Speaker 4: Most firms will launch four or five and hope one
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  Speaker 4: of those sticks. You launch 200, that's like having more
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  Speaker 4: lines in the water.
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  Speaker 1: You'll probably get a fish bite.
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  Speaker 4: So he understood it, but he did look at how
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  Speaker 4: obviously with 99% products unprofitable, it's going to be difficult
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  Speaker 4: to keep all those alive for the cost. So my guess,
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  Speaker 4: and I'll get your theory on this is, I think
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  Speaker 4: you'll have a couple hits, right? A couple of products
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  Speaker 4: that carry the day. And then you have to like,
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  Speaker 4: you have to kind of liquidate maybe like 30% of
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  Speaker 4: the product line that are just like dead weight, probably.
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  Speaker 1: That's my guess. That wouldn't be that.
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  Speaker 4: Different than the industry as a whole. Because a third
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  Speaker 4: of all ETFs go away anyway.
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  Speaker 2: Doesn't Jan Van Eck say they never close a product
• 14:20
  Speaker 2: over at Van Eck? Isn't that his phrase?
• 14:23
  Speaker 1: I don't think anybody has not closed a product, but he's.
• 14:25
  Speaker 2: But I think they're pretty good about not closing stuff
• 14:26
  Speaker 2: over there.
• 14:27
  Speaker 4: Definitely pretty good, yeah. There's a lot of people who
• 14:29
  Speaker 4: close products regularly. I mean, at this point, the average
• 14:32
  Speaker 4: age of a dead ETF is now two years old.
• 14:34
  Speaker 1: It used to be like four.
• 14:36
  Speaker 4: So a lot of the 2X stock people, if that
• 14:38
  Speaker 4: doesn't hit, they just close it. So it also depends
• 14:40
  Speaker 4: on where you're launching it. If it's more like Degen
• 14:43
  Speaker 4: hot sauce, they close quicker.
• 14:45
  Speaker 1: You know what I mean?
• 14:45
  Speaker 3: Yeah.
• 14:46
  Speaker 2: Well, I mean, if you think about most of those,
• 14:49
  Speaker 2: what did we say, 270 ETFs, most of them are
• 14:51
  Speaker 2: single stock 2Xs and industry 2Xs and that type of thing.
• 14:55
  Speaker 2: And those do tend to skew much more towards retail.
• 15:00
  Speaker 2: But right now, we don't have any plan to close
• 15:02
  Speaker 2: any of them.
• 15:03
  Speaker 1: Yeah, not yet. I know. But it's not like– it's just–
• 15:06
  Speaker 1: it's interesting.
• 15:07
  Speaker 3: That's all.
• 15:07
  Speaker 4: I think you're– well, let me ask you this, though.
• 15:09
  Speaker 4: When you're getting your sales force together and you're talking
• 15:12
  Speaker 4: about what to sell, you have 200 choices of what
• 15:16
  Speaker 4: to market that day. So do you go with the
• 15:18
  Speaker 4: one that's performing the best, the one that already took
• 15:20
  Speaker 4: in money? And you're like, hey, if people like this,
• 15:22
  Speaker 4: we should all rally around the one that's good. Or
• 15:24
  Speaker 4: do you go to like the ones that have no love?
• 15:26
  Speaker 4: And you're like, let's try to get these up. Like,
• 15:27
  Speaker 4: how do you pick?
• 15:28
  Speaker 1: Because you only have like nine hours in a day. Right.
• 15:30
  Speaker 2: Well, generally speaking, if you're thinking about a classic ETF
• 15:33
  Speaker 2: wholesaling model, the two X on the single stock names
• 15:36
  Speaker 2: are not something you march into an LPL advisor and say,
• 15:39
  Speaker 2: let me tell you about those. That's a lower success
• 15:42
  Speaker 2: rate than some of the others. I mean, Most of
• 15:44
  Speaker 2: what our new wholesalers, remember the wholesalers have not been
• 15:47
  Speaker 2: there very long. It's a young business. They're talking about
• 15:51
  Speaker 2: the buffers because the buffers are at 30 and we
• 15:53
  Speaker 2: think we can win on expense ratio there. But that's
• 15:56
  Speaker 2: a whole educational process because sometimes the advisor says, well,
• 15:59
  Speaker 2: what's a buffer? They're unfamiliar. You have first trust dominating
• 16:02
  Speaker 2: there with an innovator. Those two combined probably have 90
• 16:06
  Speaker 2: or 95% of the market. What I've been saying, because
• 16:10
  Speaker 2: if you're thinking about live product is right now, there's
• 16:12
  Speaker 2: the five fixed income mandates at five bips. Go with those. Now,
• 16:16
  Speaker 2: that's because with my prior history, we spent many years
• 16:20
  Speaker 2: battling one to three month bills. And so I have
• 16:23
  Speaker 2: a little bit of knowledge about that area of the world,
• 16:26
  Speaker 2: the very short term nature of things and where the
• 16:29
  Speaker 2: bond market is right now. I think you can get
• 16:31
  Speaker 2: wins there on the fixed income side. Now, most of
• 16:34
  Speaker 2: the beta and quasi-beta hasn't been launched, so obviously the
• 16:37
  Speaker 2: wholesalers aren't out there talking about that. Now, with the thematics,
• 16:40
  Speaker 2: that's always a little bit peculiar because it's one of
• 16:44
  Speaker 2: these concepts I'll frequently say, which is I can't make
• 16:46
  Speaker 2: you love me. You've taken a fund that's going up,
• 16:51
  Speaker 2: it's doing great, you want to try to get a win,
• 16:53
  Speaker 2: but you can't just go into an advisor's office and
• 16:56
  Speaker 2: suspect that that's the theme that they want. Usually I've
• 16:59
  Speaker 2: found that with themes, the advisor comes, you have the relationship,
• 17:02
  Speaker 2: you're a wholesaler, you have a relationship with the advisor.
• 17:06
  Speaker 2: They're aware that you have three dozen themes. Which of
• 17:09
  Speaker 2: these themes interests you? And let's see if we can
• 17:12
  Speaker 2: win that business. And in terms of surprise money, which
• 17:16
  Speaker 2: is always the interesting things, the stuff you can't really
• 17:19
  Speaker 2: figure out from 13 apps or from relationships, which is
• 17:22
  Speaker 2: you wake up and there's been several creations on something
• 17:24
  Speaker 2: and surprise, nobody has the foggiest idea where that money
• 17:28
  Speaker 2: came from And what you oftentimes say is, look, a
• 17:31
  Speaker 2: good little rule of thumb as to, let's say, in
• 17:35
  Speaker 2: our case, three dozen thematics. The good rule of thumb
• 17:38
  Speaker 2: is your best guess for whichever one's going to get
• 17:40
  Speaker 2: hot is do a data sort on trailing 90-day return.
• 17:45
  Speaker 2: And that's as simple as that. You just rank them
• 17:47
  Speaker 2: that way. And you never know when you're going to
• 17:49
  Speaker 2: get the next DRAM. But you can't build a business
• 17:52
  Speaker 2: on Crossing your fingers and hoping and praying that you
• 17:55
  Speaker 2: get the next DRAM. It'd be great if we did.
• 17:57
  Speaker 2: We would love that. But I can't make you love me, right?
• 18:00
  Speaker 2: I can't make you fall in love with my up
• 18:03
  Speaker 2: and to the right ETF. Really, all I can make
• 18:06
  Speaker 2: you do is understand that the brand exists in a
• 18:09
  Speaker 2: world of, what is it, 300 issuers?
• 18:11
  Speaker 3: About 300.
• 18:11
  Speaker 1: Yeah.
• 18:14
  Speaker 2: Issuers. You have to have a lot of humility. And
• 18:16
  Speaker 2: two of them.
• 18:17
  Speaker 1: Take in over half the money.
• 18:18
  Speaker 2: Yes.
• 18:19
  Speaker 4: So the rest, 298, something like that, are fighting over 45%
• 18:23
  Speaker 4: of the flows, 40.
• 18:25
  Speaker 1: That's not bad. It used to be higher. But that's
• 18:28
  Speaker 1: still a lot of money, though. They take in $ 1. 52
• 18:30
  Speaker 1: trillion a year.
• 18:51
  Speaker 3: But the bet is that a cute dog face can
• 18:54
  Speaker 3: actually get in there and make you take notice.
• 18:58
  Speaker 4: I will say, the brand is really cool. It's almost
• 19:01
  Speaker 4: like you're trying to launch all these products.
• 19:03
  Speaker 3: Bring a brand.
• 19:04
  Speaker 4: Yeah, it's for Gen Z kind of brand. And the dog,
• 19:09
  Speaker 4: like me and Todd Sohn, a fellow ETF analyst, we've
• 19:11
  Speaker 4: had a lot of fun with the brand. We've put
• 19:12
  Speaker 4: the dog on the cover of Nirvana's Nevermind. We've put
• 19:15
  Speaker 4: the dog in different historical scenarios. There's just something about
• 19:19
  Speaker 4: a Corgi that is so fun and appealing. Like it's
• 19:24
  Speaker 4: a really great mascot. And I think you have a
• 19:26
  Speaker 4: lot of energy there that is real. I think the
• 19:29
  Speaker 4: question is how do you translate into like advisors like
• 19:32
  Speaker 4: signing checks and giving you money? Yeah.
• 19:34
  Speaker 2: And this is, I mean, if you think about, it
• 19:37
  Speaker 2: truly is remarkable because you're building a business by doing, right?
• 19:43
  Speaker 2: You're launching products. You're seeing what might stick. You're getting
• 19:46
  Speaker 2: feedback in real time. So we just launched the mangoes one,
• 19:50
  Speaker 2: and then, right? Will it be a success? Will it
• 19:52
  Speaker 2: not be? Your guess is as good as mine. Now
• 19:55
  Speaker 2: that is thematic, it's niche, it's concentrated. That would take
• 20:00
  Speaker 2: several years to get that on a Merrill platform, something
• 20:03
  Speaker 2: like that. It will take off or it won't take off.
• 20:06
  Speaker 2: And then at the same time, next conversation, I'm talking
• 20:10
  Speaker 2: to Anthony saying, how do we get the beta into
• 20:12
  Speaker 2: the Trump accounts? Like literally thematics that might be hot
• 20:18
  Speaker 2: or cold. And in a different conversation, who do we
• 20:20
  Speaker 2: call in DC to run right next to VOL with
• 20:23
  Speaker 2: a beta product? I mean, and the answer is, I
• 20:27
  Speaker 2: don't know.
• 20:27
  Speaker 3: I don't know.
• 20:28
  Speaker 2: The way I understood it is I needed to figure
• 20:30
  Speaker 2: out who's reporting to Scott Besant and then get in
• 20:33
  Speaker 2: front of them because we're going to try to come
• 20:35
  Speaker 2: in here at these wafer thin total market exposures. And
• 20:39
  Speaker 2: then will they answer the phone at Treasury and talk
• 20:42
  Speaker 2: to somebody not named Vanguard?
• 20:44
  Speaker 3: And would you lead with, like, can we bring Corgis
• 20:47
  Speaker 3: to that meeting?
• 20:50
  Speaker 1: That's your calling card right now. I'm going to bring
• 20:52
  Speaker 1: a Corgi with me.
• 20:52
  Speaker 2: I'm going to bring a Corgi. Yeah. Well, I mean,
• 20:54
  Speaker 2: the whole thing with those Trump accounts is that the
• 20:57
  Speaker 2: theory goes that you're just putting a bunch of stuff
• 20:59
  Speaker 2: in there that's at two and three basis points. So
• 21:02
  Speaker 2: if somebody were to come in south of that with
• 21:04
  Speaker 2: an ETF, then theoretically they should take that phone call.
• 21:08
  Speaker 2: But again, I mean, I don't even know if that
• 21:09
  Speaker 2: was shopped because Fidelity is not in those Trump accounts.
• 21:15
  Speaker 2: Was Fidelity allowed to bid on that? We have no idea.
• 21:18
  Speaker 1: Yeah, that's interesting.
• 21:20
  Speaker 2: Please don't come for the Trump accounts because we are.
• 21:22
  Speaker 3: There we go.
• 21:25
  Speaker 4: My thesis is they probably wanted an ETF, which Fidelity
• 21:30
  Speaker 4: has cheap index mutual funds, but not ETFs.
• 21:32
  Speaker 2: Yes.
• 21:32
  Speaker 4: Then when they looked at the S & P 500 one,
• 21:34
  Speaker 4: SPYM happened to be the cheapest and they picked that.
• 21:38
  Speaker 4: But honestly, they could have done worse to be fair.
• 21:41
  Speaker 4: They're pretty good funds. They're just all very like– what's
• 21:45
  Speaker 4: the word?
• 21:45
  Speaker 1: Generic.
• 21:46
  Speaker 2: Look, if your kid from age birth to– what is it?
• 21:50
  Speaker 2: 18 years old or 21 years old?
• 21:52
  Speaker 3: 18.
• 21:52
  Speaker 2: Is locked in on State Street at two basis points.
• 21:57
  Speaker 2: That's not a problem.
• 21:58
  Speaker 1: Yeah.
• 21:59
  Speaker 2: That's just fine.
• 22:00
  Speaker 1: You're just saying you might launch one at one and
• 22:02
  Speaker 1: like how do we get in there? Yeah.
• 22:03
  Speaker 3: Well, how do we get in there? What's the strategy
• 22:04
  Speaker 3: to get in? Do you think it's just.
• 22:06
  Speaker 2: Launch with one? We're trying to figure it out because
• 22:07
  Speaker 2: we don't know who to call. Because it's either the
• 22:11
  Speaker 2: SEC or the undersecretary of the treasury because they just
• 22:14
  Speaker 2: kind of rolled it all out. And then it's also–
• 22:17
  Speaker 2: the platforms are Robinhood and is it BNY if I'm
• 22:21
  Speaker 2: not mistaken for the– I've got four Trump accounts over there.
• 22:24
  Speaker 2: It's just like– It's actually a very, very well-designed app.
• 22:28
  Speaker 2: And then you do the dropdown and it changes from
• 22:30
  Speaker 2: one kid to the next and you can see your
• 22:33
  Speaker 2: money growing. It's very well-designed, but I mean, it's just like,
• 22:36
  Speaker 2: it's a big fog of mystery.
• 22:38
  Speaker 3: Yeah. All right. Well, when you crack it, let us know.
• 22:41
  Speaker 3: We'll talk again about this. But I'm curious, just the
• 22:47
  Speaker 3: spaghetti on the wall thing. The strategy seems to be,
• 22:50
  Speaker 3: let's throw it all out there. If I was being
• 22:52
  Speaker 3: a little skeptical of it, it sounds like this is
• 22:55
  Speaker 3: an AI business. We're going to challenge assumptions, throw a
• 22:59
  Speaker 3: bunch of spaghetti at the wall, use AI to do that,
• 23:02
  Speaker 3: and then course correct as we need to. So how
• 23:05
  Speaker 3: are you guys using AI on a daily slash bigger basis?
• 23:10
  Speaker 2: Well, for one, you can file prospectus that way. I'll
• 23:14
  Speaker 2: give you another example. Just launch the product. We need
• 23:18
  Speaker 2: a fact sheet. Now think about the process by which
• 23:22
  Speaker 2: you create a fact sheet. Now we have this new
• 23:24
  Speaker 2: employee named Claude. Have you met him? Claude will put
• 23:27
  Speaker 2: together the fact sheet really quickly. You do seven or
• 23:29
  Speaker 2: eight iterations. The fact sheet's done in like 25 minutes.
• 23:32
  Speaker 2: I mean, it doesn't take much. And so if you're
• 23:34
  Speaker 2: thinking about launching ETFs, an insurance company that started in 2004,
• 23:39
  Speaker 2: Very first ETF launch is something like the last week
• 23:41
  Speaker 2: of December of 2025. So we've been around less than
• 23:43
  Speaker 2: a year. You don't have these entire teams that were
• 23:47
  Speaker 2: employed by you, like the fact sheet maintenance team and
• 23:53
  Speaker 2: people who write a ton of white papers and that
• 23:54
  Speaker 2: type of thing. And so you can run your business
• 23:58
  Speaker 2: and operate that way. I mean, now then you have
• 24:00
  Speaker 2: the countervailing forces, brand new business. Oh crap. We don't
• 24:04
  Speaker 2: have a database of customers, right? But CRM, We could
• 24:10
  Speaker 2: just build that ourselves. And so that's what we did.
• 24:13
  Speaker 2: And who did that? Well, the engineer did that. How
• 24:16
  Speaker 2: old is the engineer? 20. And the engineer built the CRM.
• 24:21
  Speaker 2: And that's just the way it worked. And so I
• 24:23
  Speaker 2: think there's one of these things we have this advantage
• 24:26
  Speaker 2: of the business is so youthful. And Eric, I think
• 24:29
  Speaker 2: maybe you're right. We don't know what we don't know.
• 24:31
  Speaker 2: But there is this mentality. I mean, we've seen this.
• 24:34
  Speaker 2: It's such a Northern California, San Francisco concept of, oh, Well,
• 24:40
  Speaker 2: this is the way it's done? No, no, no. We
• 24:42
  Speaker 2: could just build that ourselves. Why would we not just
• 24:44
  Speaker 2: build that ourselves with these new tools at our disposal?
• 24:46
  Speaker 2: And I think it has to do with AI natives
• 24:50
  Speaker 2: and these various concepts. I mean, I was growing up
• 24:53
  Speaker 2: watching MTV, right? I'm at the end of Gen X
• 24:55
  Speaker 2: into millennial, right? So I watched the internet unfold. I
• 25:00
  Speaker 2: watched being a sentient being pretty much near adulthood before
• 25:05
  Speaker 2: I got an email address in the 1990s. And watching
• 25:09
  Speaker 2: all this unfold, I think that there's like, wait, what
• 25:10
  Speaker 2: do you mean he didn't have an email address? What
• 25:12
  Speaker 2: do you mean? What the hell is MTV? So, I mean,
• 25:15
  Speaker 2: this is a concept.
• 25:18
  Speaker 1: No, they haven't seen The Godfather. This is the world in.
• 25:21
  Speaker 3: Which we live in now. But what you're describing is
• 25:23
  Speaker 3: a company that can like do everything from scratch at velocity. Yes.
• 25:29
  Speaker 3: And I'm curious, what's going to be the thing when
• 25:31
  Speaker 3: you look back and you're like, oh, we did it?
• 25:34
  Speaker 3: Is it going to be 500 ETFs or is it
• 25:37
  Speaker 3: going to be like three hit products? What does success
• 25:41
  Speaker 3: really look like?
• 25:42
  Speaker 2: Well, your guess is as good as mine, firstly, Joel.
• 25:47
  Speaker 2: But my supposition would be that once you build out
• 25:50
  Speaker 2: these families, that you would have some level of consistency
• 25:53
  Speaker 2: in each family where there's a flagship. So in U.S. equities,
• 25:56
  Speaker 2: there would be some flagship, probably your large cap core fund.
• 26:00
  Speaker 2: In fixed income, it's whichever one has the word aggregate
• 26:03
  Speaker 2: in its name. So it'd be your aggregate bond fund.
• 26:06
  Speaker 2: But then also just thinking about the consistency from product
• 26:10
  Speaker 2: to product. So if you are, let's say you're a
• 26:14
  Speaker 2: boutique ETF issuer, you've been around 10, 15, 20, 25 years.
• 26:19
  Speaker 2: So you're an established one, but you tend to end
• 26:22
  Speaker 2: up with a situation where you're launching funds and there's
• 26:24
  Speaker 2: not really a relationship from fund to fund. Whereas here,
• 26:28
  Speaker 2: just using example of the country funds, which was the
• 26:30
  Speaker 2: original concept that caught my eye, it will never be
• 26:32
  Speaker 2: the biggest business line at Corgi, but it could be
• 26:34
  Speaker 2: a sizable business line. Boom, Corgi Canada. Boom, Corgi Germany. Boom,
• 26:40
  Speaker 2: Corgi United Kingdom. Down the list. So then that opens
• 26:43
  Speaker 2: up a lot of playbooks for you. You can do
• 26:45
  Speaker 2: a country rotation model. You can theoretically, if you can
• 26:48
  Speaker 2: build the brand, say, oh, I like countries. Well, Maybe
• 26:52
  Speaker 2: I just won't necessarily instinctually go to iShares and Franklin
• 26:56
  Speaker 2: on those, which is what people do. There is this
• 26:59
  Speaker 2: third player. And hopefully at some point in time, that
• 27:02
  Speaker 2: third player becomes the second or first player in country
• 27:05
  Speaker 2: funds just to pick that specific area. So rather than say, oh,
• 27:09
  Speaker 2: I have a great idea for a– we're just going
• 27:12
  Speaker 2: to launch a France one, see how that sticks. We'll
• 27:14
  Speaker 2: launch a Spain one, see how that's– let's just launch
• 27:16
  Speaker 2: 40 of them. And then challenge people who are buying
• 27:20
  Speaker 2: individual country funds to put yours against theirs. And I
• 27:25
  Speaker 2: think that that might be a lean and mean consistency
• 27:27
  Speaker 2: angle at it. And one of the things that I
• 27:29
  Speaker 2: oftentimes tell the firm, I mean, like with Eric, with
• 27:32
  Speaker 2: the one that was just launched, it's our only equal
• 27:34
  Speaker 2: weighted one. The mangoes, it's only equal weighted just because
• 27:37
  Speaker 2: it happens to be six names. Everything else is cap weighted.
• 27:41
  Speaker 2: Everything's consistent. So think about 28, 29, 30 rolls around.
• 27:45
  Speaker 2: You have a small army of wholesalers. The story is
• 27:49
  Speaker 2: consistent from product to product. Oh, meeting at 10 a.m.
• 27:52
  Speaker 2: at Starbucks with this advisor. They want to do, I
• 27:56
  Speaker 2: don't know, they have an interest in some sector fund. Cool.
• 27:58
  Speaker 2: Let me tell you how it's done. It's cap weighted.
• 28:01
  Speaker 2: And it's low expense ratio. And here it is. Here's
• 28:04
  Speaker 2: our list against State Street. And then, oh, okay, this
• 28:07
  Speaker 2: different advisor at noon at their office, they want large value.
• 28:13
  Speaker 2: I can't tell them what they want. They want large
• 28:15
  Speaker 2: value because the person after that wants large growth. Here's
• 28:18
  Speaker 2: our large value. I see that you already own the
• 28:20
  Speaker 2: XYZ fund. It's cap weighted. It's tracking the such and
• 28:24
  Speaker 2: such index. Same conversation again and again and again. Is
• 28:28
  Speaker 2: it almost like a Walmart business model? We don't proclaim
• 28:33
  Speaker 2: to be something that we're not. There isn't all these managers.
• 28:36
  Speaker 3: I was thinking of Walmart because basically it's like your
• 28:38
  Speaker 3: audience is RAs. It's like, we're going to be there.
• 28:40
  Speaker 3: We're going to have a product. It's going to be
• 28:43
  Speaker 3: competitively priced, if not cheaper. Like, why would you not.
• 28:47
  Speaker 2: Look at it, right? That's my theory. That's the career
• 28:52
  Speaker 2: jump that I made. I mean, what ends up happening is,
• 28:55
  Speaker 2: and I've said to the gang, you know, the time
• 28:58
  Speaker 2: will come in 27 or 28 where some new person
• 29:02
  Speaker 2: joins Corgi. We don't know who that person would be.
• 29:05
  Speaker 2: And they want to come in and make a splash,
• 29:07
  Speaker 2: show that they're really smart. And in so doing, they say,
• 29:11
  Speaker 2: I want to bring in this manager. I want to
• 29:12
  Speaker 2: bring in that manager and do all that stuff. It's like, well, actually, guys,
• 29:16
  Speaker 2: let's just battle on expense ratio. And to the extent
• 29:19
  Speaker 2: that we want to get the high profit margin mandates,
• 29:22
  Speaker 2: 35 bps or something like that, if thematics, which is
• 29:26
  Speaker 2: a much more profitable than the beta business, let's just
• 29:30
  Speaker 2: come up with the theme. It's nominally active in that
• 29:34
  Speaker 2: we have to select which ones are fitting into that industry.
• 29:37
  Speaker 2: But let's not have anybody in the firm saying, oh,
• 29:40
  Speaker 2: I really like CrowdStrike. Or no, no, no, I don't
• 29:43
  Speaker 2: like CrowdStrike. Yep, no, I do like CrowdStrike. It's just,
• 29:46
  Speaker 2: is CrowdStrike in the theme or not? Cap weight it?
• 29:49
  Speaker 2: Because you can't run Walmart with a lot of overhead.
• 29:54
  Speaker 2: You can't start hiring all these people and having more
• 29:57
  Speaker 2: office space, more people on payroll. fiefdoms. If you guys
• 30:01
  Speaker 2: have ever heard, the two of you certainly have, any
• 30:05
  Speaker 2: firm that has a legacy mutual fund business and an
• 30:07
  Speaker 2: ETF business at the same time, there's fiefdoms, there's conflict sometimes.
• 30:13
  Speaker 2: Just run it lean and mean, make an attempt, keyword attempt,
• 30:17
  Speaker 2: to be the Walmart of the industry and see if
• 30:19
  Speaker 2: it's a success. Not going to be easy, but we're
• 30:22
  Speaker 2: going to give it a shot.
• 30:43
  Speaker 3: Okay. Speaking of not being easy, there's been online chatter
• 30:46
  Speaker 3: about the company's culture. Yes. And if you're running it
• 30:51
  Speaker 3: lean and mean and fast and loose, like that's sort
• 30:53
  Speaker 3: of what it's reflected so far. And I'm curious, like,
• 30:56
  Speaker 3: how are you, how is the company talking about its cultural,
• 30:59
  Speaker 3: cultural challenges internally? And what have you learned about some
• 31:03
  Speaker 3: of the stuff that's happened so far?
• 31:05
  Speaker 2: Yeah. Well, it is a young company with a lot
• 31:08
  Speaker 2: of young people. And young people do treat social media
• 31:11
  Speaker 2: a lot different from everyone else. And there is also
• 31:15
  Speaker 2: that free speech concept in Silicon Valley, too, that libertarian concept. Additionally,
• 31:25
  Speaker 2: one of the things that we oftentimes hear with Corgi
• 31:27
  Speaker 2: is the seven-day work week. You guys probably come across this, too.
• 31:30
  Speaker 2: And it's like, you know what? You're damned if you
• 31:32
  Speaker 2: do and damned if you don't. Everybody sits around and
• 31:35
  Speaker 2: says these young people are lazy in this generation. And
• 31:37
  Speaker 2: my generation worked so much harder than these young people.
• 31:39
  Speaker 2: They won't get off the couch. It's like, okay, here's
• 31:42
  Speaker 2: a bunch of young people that will get off the couch.
• 31:44
  Speaker 2: In fact, they're never even on the couch. It's like,
• 31:47
  Speaker 2: let's kick them too. Let's kick them in the face too.
• 31:50
  Speaker 2: You can't get it right. So it is wild how
• 31:56
  Speaker 2: eccentric and hardworking the Corgi people are. But it's like, yeah,
• 32:00
  Speaker 2: that's right. Because they went to Stanford and they're 22
• 32:03
  Speaker 2: years old or 24 years old or 26 years old.
• 32:06
  Speaker 2: And they're trying to make a fortune. And people are
• 32:09
  Speaker 2: trying to make a fortune work very hard. So, I'm
• 32:13
  Speaker 2: working very hard as well. I don't know that I
• 32:16
  Speaker 2: have the same stamina as the 25-year-olds. But let's just
• 32:20
  Speaker 2: say I'm on call on Saturdays and Sundays. The phone
• 32:25
  Speaker 2: is ringing. We're talking stuff. But it's kind of fun
• 32:28
  Speaker 2: because it really is first inning stuff.
• 32:32
  Speaker 3: So I got to ask, since we've talked this long,
• 32:34
  Speaker 3: how well do you know Corgis?
• 32:36
  Speaker 2: The dogs themselves?
• 32:37
  Speaker 3: Yeah.
• 32:38
  Speaker 2: Like our Corgis or Corgis in general? Both.
• 32:42
  Speaker 3: I would hope that you know yours well.
• 32:44
  Speaker 1: Are there like house dogs? Like are there certain Corgis
• 32:47
  Speaker 1: that belong to Corgi, the brand?
• 32:49
  Speaker 2: Yeah, they're Corgis.
• 32:50
  Speaker 1: Like the mascot, like Bevo, the Longhorn for the.
• 32:52
  Speaker 2: Like the Texas Longhorns. Yeah, it's like Ugga, like Ugga, Georgia,
• 32:56
  Speaker 2: that type of thing. Yeah.
• 32:57
  Speaker 3: Can you name them all?
• 32:58
  Speaker 2: Well, there's Hamilton and there's Napoleon. And I had last week,
• 33:02
  Speaker 2: one of them was, we tried to do a promotional
• 33:04
  Speaker 2: video on the mangoes. And I'm like, well, give me,
• 33:07
  Speaker 2: let me hold the dog. We'll do it. It'd be
• 33:09
  Speaker 2: really cute. Cause we've had, we've done it in the
• 33:11
  Speaker 2: past where the dog is sitting still and it's really
• 33:14
  Speaker 2: cute promotional videos. But the dog was gnawing on my
• 33:18
  Speaker 2: hand and it was hurting.
• 33:20
  Speaker 3: Not cooperative.
• 33:21
  Speaker 2: We had to do it from the studio. But they're adorable.
• 33:24
  Speaker 2: They are. When I have one of my kids.
• 33:26
  Speaker 3: Corgi puppy is like hard to beat. That's like adorable
• 33:29
  Speaker 3: in a nutshell.
• 33:30
  Speaker 2: Yeah.
• 33:31
  Speaker 3: Literally.
• 33:31
  Speaker 2: My daughter's 15. And when I was starting to talk
• 33:35
  Speaker 2: to Corgi a few months ago about coming over, she's like, oh,
• 33:38
  Speaker 2: Corgi's great. If you have a dog lover. Yeah. I mean,
• 33:42
  Speaker 2: second to like a yellow lab dog. There's not really
• 33:46
  Speaker 2: much better.
• 33:47
  Speaker 3: Might even trump the yellow lab.
• 33:49
  Speaker 2: Yeah, it's maybe above the yellow lab.
• 33:51
  Speaker 3: So wait, how many Corgis does Corgi have? And do
• 33:54
  Speaker 3: they have pet insurance?
• 33:55
  Speaker 2: Like each one of them?
• 33:56
  Speaker 3: I would hope so since it's an insurance business.
• 33:58
  Speaker 2: We will probably end up getting into pet insurance too. Well,
• 34:02
  Speaker 2: I suppose that each of the offices have. I haven't
• 34:04
  Speaker 2: been to the Dallas office. I haven't been to the-
• 34:06
  Speaker 2: So there's like a.
• 34:07
  Speaker 3: Each office has a Corgi?
• 34:09
  Speaker 2: Yes.
• 34:10
  Speaker 1: Okay.
• 34:10
  Speaker 3: Yes. Okay.
• 34:11
  Speaker 1: Does Hamilton have like his own office?
• 34:14
  Speaker 3: And like- And who takes them home? Is it like
• 34:16
  Speaker 3: kindergarten where you take the rabbit home?
• 34:18
  Speaker 2: The dogs are, I mean, they're- They're really well cared
• 34:22
  Speaker 2: for because they're really cute and there's always someone around.
• 34:25
  Speaker 1: They fly private, Joel.
• 34:27
  Speaker 3: Sure. Under 20 pounds, they can fit in first class
• 34:32
  Speaker 3: under the seat.
• 34:34
  Speaker 2: Take that concept of the dog in the workplace. When
• 34:40
  Speaker 2: I started- My career years ago, that was a little
• 34:43
  Speaker 2: bit of a no-no. It was a lot of bit
• 34:45
  Speaker 2: of a no-no.
• 34:46
  Speaker 3: I'm going to say I'm still on that side of it.
• 34:48
  Speaker 3: No dogs in the workplace? It's just so many things
• 34:52
  Speaker 3: can go wrong.
• 34:54
  Speaker 2: Well, it's also like if you're doing meetings in like Boulder–
• 35:00
  Speaker 2: Every other RIA in a place like Boulder has DOT
• 35:04
  Speaker 2: because it's very freewheeling conceptually.
• 35:07
  Speaker 1: If you have 10 people, I don't think it's a
• 35:08
  Speaker 1: big deal.
• 35:09
  Speaker 3: So what's your preferred type of corgi? Is it the
• 35:12
  Speaker 3: long-haired one or the short-haired one?
• 35:15
  Speaker 2: I don't know. I don't know the cutest ones, the
• 35:18
  Speaker 2: puppiest ones.
• 35:19
  Speaker 3: Okay.
• 35:20
  Speaker 2: All right.
• 35:20
  Speaker 3: Little tiny corgi.
• 35:22
  Speaker 1: He's just getting– he's learning the ropes, Joe. I mean
• 35:25
  Speaker 1: at least he knows the.
• 35:26
  Speaker 3: There's got to be somebody at Corgi who is like
• 35:28
  Speaker 3: the Corgi whisperer, Corgi geek. Like who is that person?
• 35:32
  Speaker 2: We're over here just trying to take down State Street.
• 35:36
  Speaker 2: We're not trying to take you down State Street. We
• 35:38
  Speaker 2: love you, State Street.
• 35:39
  Speaker 3: The way to do it is with.
• 35:43
  Speaker 2: I'll tell you that the brand recognition for the coffee
• 35:48
  Speaker 2: shops and then also the regional brand recognition, like in
• 35:51
  Speaker 2: Northern California, people know Corgi. And there is a difference
• 35:56
  Speaker 2: between somebody's awareness of the brand in like, let's say
• 36:00
  Speaker 2: Miami compared to the West Coast. It's just, I think
• 36:03
  Speaker 2: it's very regional, right? There's a coffee shop, you're commuting
• 36:06
  Speaker 2: into your San Francisco office. Maybe you get a cup
• 36:08
  Speaker 2: of coffee there. There's also the Corgi bus. I don't
• 36:11
  Speaker 2: know if you guys know about this. The Corgi bus
• 36:13
  Speaker 2: where you can ride around San Francisco. And then the
• 36:16
  Speaker 2: ETF operation. We're in Chicago. So you're what? You're Madison
• 36:21
  Speaker 2: and Wells. You're right there. You're doing ETFs. You're not
• 36:24
  Speaker 2: from one of these five asset managers. No, actually, we're
• 36:27
  Speaker 2: the new ones doing it. Going to put Madison and
• 36:30
  Speaker 2: Wells on the map.
• 36:31
  Speaker 4: Do any of the young people working there ask you like, Hey,
• 36:35
  Speaker 4: you know, do they go to you with like help
• 36:38
  Speaker 4: with selling or ETF mechanics?
• 36:42
  Speaker 1: Like, are you like the guru? Because you're, I mean,
• 36:45
  Speaker 1: to me, you're like my age. I don't think we're
• 36:47
  Speaker 1: that old, but maybe we are.
• 36:48
  Speaker 2: I don't think we are either. I don't think of
• 36:50
  Speaker 2: myself as an old person. It's funny.
• 36:53
  Speaker 4: But again, to a 25-year-old, do they come, or are
• 36:56
  Speaker 4: they just like, is there anything you have to explain? Like, hey, look,
• 37:01
  Speaker 4: you can't just do this, you know, like.
• 37:04
  Speaker 1: Are you able to teach them anything?
• 37:07
  Speaker 2: Well, the thing about coming over to Corgi was the
• 37:10
  Speaker 2: ETF team is filled with a bunch of very brilliant
• 37:13
  Speaker 2: people because you're doing that with a very tiny crew. Like,
• 37:16
  Speaker 2: for example, Anthony Cuneri and Miles Braden. How old are
• 37:20
  Speaker 2: these guys? I mean, they're short of 30 years old. Wow,
• 37:23
  Speaker 2: I don't think I was there. I don't think I
• 37:25
  Speaker 2: was anywhere near there when I was 30. They're kicking butt. Wow,
• 37:30
  Speaker 2: these guys are indispensable, right? So then But then if
• 37:33
  Speaker 2: you think about go-to-market success for your startup ETF firm, like, okay,
• 37:42
  Speaker 2: take like a plain conversation, Eric, that you and I
• 37:46
  Speaker 2: would have, like getting a fund onto a Merrill platform, right?
• 37:49
  Speaker 2: This would be the concept, right? Can you get the
• 37:52
  Speaker 2: thing onto Merrill? It's like, well, we can't just– Get
• 37:57
  Speaker 2: a meeting with Merrill tomorrow and get a fund onto
• 38:00
  Speaker 2: a platform. It's a multi-year process. And so I think
• 38:02
  Speaker 2: there's ETF industry dynamics, asset manager dynamics.
• 38:06
  Speaker 1: Like it's not like, oh, we made the product. You
• 38:08
  Speaker 1: should just buy it.
• 38:09
  Speaker 2: Right.
• 38:10
  Speaker 1: It's like this whole long form. It's a long game. Oh, yeah.
• 38:14
  Speaker 1: We're talking wire houses.
• 38:16
  Speaker 4: Direct retail, if the product is like really cool or
• 38:19
  Speaker 4: performs well, they will bite. But to get the bigger
• 38:22
  Speaker 4: fish to bite, you've really got to work that for
• 38:24
  Speaker 4: a long time and they've got to be comfortable with you.
• 38:27
  Speaker 3: Oh, yeah.
• 38:27
  Speaker 2: I mean, one of the things, I mean, when I
• 38:29
  Speaker 2: was at BMO, I was in the private bank. It's
• 38:32
  Speaker 2: almost like a refreshing thing for the bank coverage guy was, oh,
• 38:36
  Speaker 2: Jeff is here. And Jeff was here when I met
• 38:38
  Speaker 2: him six months ago. Jeff was here six months before that.
• 38:41
  Speaker 2: So sometimes you'll form a relationship. Top of the house,
• 38:44
  Speaker 2: the gatekeeper at a big private bank. You form that relationship.
• 38:48
  Speaker 2: You're so close on the XYZ fund. Then wait, what?
• 38:52
  Speaker 2: They left the firm? Where'd they go? they went to
• 38:55
  Speaker 2: another firm or they went off on their own. And
• 38:58
  Speaker 2: so you were in the eighth or ninth inning. And
• 39:01
  Speaker 2: so now you're back to square one. And so you
• 39:02
  Speaker 2: do see people spinning their wheels, certainly in the banks,
• 39:06
  Speaker 2: for example, for years on end to try to get, first,
• 39:09
  Speaker 2: you have to get access to the platform. And then
• 39:11
  Speaker 2: you have to convince the financial advisors that work at
• 39:15
  Speaker 2: that bank. This is a two-step process. And then you
• 39:17
  Speaker 2: could argue there's a third step, which is that advisor
• 39:20
  Speaker 2: now also needs to convince the end clients that this
• 39:22
  Speaker 2: is viable for them. So It is one of those
• 39:26
  Speaker 2: multi-year things. I oftentimes wonder, and I I don't know
• 39:30
  Speaker 2: the answer to this because I haven't been working at
• 39:33
  Speaker 2: a low-cost provider in the past, like the true terror
• 39:37
  Speaker 2: dome fee war type concepts, although BMO was doing that
• 39:40
  Speaker 2: in Canada. BMO is number two market share in the
• 39:42
  Speaker 2: Canadian market, is how much of the business is that
• 39:48
  Speaker 2: going out with the advisor, getting to know them, the
• 39:51
  Speaker 2: name of their spouse and kids, that type of thing,
• 39:53
  Speaker 2: compared to just, hey, let's go through the 13 Fs.
• 39:57
  Speaker 4: In my opinion, there's three Cs. We call it the
• 39:59
  Speaker 4: three Cs for ETF success.
• 40:02
  Speaker 1: Cheap, creative, or Cabernet.
• 40:06
  Speaker 4: So what we're talking about is the Cabernet lane, which
• 40:09
  Speaker 4: is like, there's some firms that are really good at it.
• 40:12
  Speaker 4: I won't name names, but you look at the fund,
• 40:14
  Speaker 4: you're like, wow, It's a 60 basis point dividend fund.
• 40:16
  Speaker 1: It's not exactly outperforming everything. And it's got $ 4 billion.
• 40:20
  Speaker 1: Somebody's working that system there. And I don't blame them.
• 40:23
  Speaker 1: Like these relationships.
• 40:24
  Speaker 4: So that's why dirt cheap can sell coming out with
• 40:28
  Speaker 4: the first thing of whatever it is.
• 40:29
  Speaker 3: Yeah.
• 40:30
  Speaker 1: Inventing.
• 40:31
  Speaker 2: Yeah.
• 40:31
  Speaker 3: First mover.
• 40:32
  Speaker 1: That's creative. Or like maybe a combination of things.
• 40:37
  Speaker 3: DRAM was that, right? DRAM.
• 40:38
  Speaker 2: Yeah.
• 40:38
  Speaker 1: That's not the first theme ETF, but it certainly did something.
• 40:42
  Speaker 2: I don't know. How about, I don't know what the,
• 40:45
  Speaker 2: what the other C would be, but how about where
• 40:46
  Speaker 2: I was at wisdom tree, which, which is, which is no,
• 40:49
  Speaker 2: that's not a cabernet shop. That is, that is a
• 40:52
  Speaker 2: brilliance of the people working there.
• 40:54
  Speaker 1: Oh yeah.
• 40:55
  Speaker 2: The brilliance of Jeremy Schwartz and Sam Rines.
• 40:58
  Speaker 1: I hear you.
• 40:59
  Speaker 4: I would give wisdom tree is more on the creative side,
• 41:02
  Speaker 4: but they're, and they're also pretty low cost.
• 41:04
  Speaker 1: So it's a combination of those two.
• 41:05
  Speaker 3: Yeah.
• 41:06
  Speaker 4: I don't consider wisdom tree a cabernet firm.
• 41:08
  Speaker 2: No.
• 41:08
  Speaker 1: That said they do a lot of education.
• 41:10
  Speaker 3: Yeah.
• 41:11
  Speaker 4: And the other thing they did that you should learn from,
• 41:13
  Speaker 4: in my opinion, but you were there, is when DXJ
• 41:16
  Speaker 4: came out.
• 41:16
  Speaker 2: Yeah.
• 41:17
  Speaker 4: And that was probably like one of 30 ETFs you had.
• 41:19
  Speaker 4: You guys rallied around that. There was commercials everywhere. You
• 41:23
  Speaker 4: have this hit with the photonics ETF.
• 41:25
  Speaker 3: Right.
• 41:25
  Speaker 4: I would more rally around the ones that are getting
• 41:27
  Speaker 4: bites because you know you have something that if five
• 41:30
  Speaker 4: investors like it.
• 41:31
  Speaker 1: 500 probably will.
• 41:32
  Speaker 2: Exactly.
• 41:33
  Speaker 1: And then some of these ones that nobody cares about,
• 41:35
  Speaker 1: maybe just move on.
• 41:37
  Speaker 2: Well, you can maybe shelf them. There is a concept
• 41:40
  Speaker 2: whereby if you're not paying too much, you shelf it
• 41:42
  Speaker 2: and then see if it pulls a DX check.
• 41:45
  Speaker 3: So you've been in this business a while. A question
• 41:48
  Speaker 3: that we ask often at the end of the podcast is,
• 41:51
  Speaker 3: if there was an ETF other than your own, what
• 41:57
  Speaker 3: is your favorite ETF ticker other than your own?
• 42:01
  Speaker 2: Can we go with DXJ?
• 42:02
  Speaker 3: Okay.
• 42:02
  Speaker 2: All right.
• 42:03
  Speaker 1: That's fair.
• 42:04
  Speaker 2: I mean, I remain a Japan bull. I think that
• 42:08
  Speaker 2: that is a very creative product. I'll tell you what,
• 42:11
  Speaker 2: that one is also at a lower expense ratio than
• 42:13
  Speaker 2: the leading Japan fund. And it always surprised me as
• 42:18
  Speaker 2: to why that lead fund would gather assets.
• 42:23
  Speaker 3: All right. Jeff Winninger, we're going to leave it there.
• 42:24
  Speaker 2: Thanks, Joel.
• 42:25
  Speaker 3: Thanks for joining us on Trillions. Thanks for listening to Trillions.
• 42:34
  Speaker 3: Until next time, you can find us on the Bloomberg Terminal, Bloomberg.com,
• 42:37
  Speaker 3: Apple Podcasts, Spotify, or wherever else you'd like to listen.
• 42:41
  Speaker 3: We'd love to hear from you. Hit us up. Trillions
• 42:44
  Speaker 3: is produced by Magnus Hendriksen and Keshav Pandya. Amy Keene
• 42:49
  Speaker 3: is our executive producer. Cheryl Brumley is the head of
• 42:52
  Speaker 3: Bloomberg Podcasts. Bye.