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The 60/40 Portfolio Is Dying — BlackRock Just Revealed What's Next · Earn Your Leisure

• 0:00
  Speaker 1: All right, let's bring our guests up, shall we. Hey,
• 0:05
  Speaker 1: how's it going?
• 0:06
  Speaker 2: Hi, good afternoon.
• 0:07
  Speaker 3: How are you feeling, man?
• 0:09
  Speaker 2: I'm great. How are you guys?
• 0:11
  Speaker 3: Very good? Glad to have you here.
• 0:12
  Speaker 2: It's good to be back. I was on the show
• 0:14
  Speaker 2: last year and lucky enough to be invited back again.
• 0:18
  Speaker 3: Yeah, we appreciate you being here again.
• 0:19
  Speaker 1: Appreciate you having Jay Jacobs, us head of Equity ETFs
• 0:24
  Speaker 1: at black Rock. Yes, pleasure to have you back. How
• 0:28
  Speaker 1: are you doing?
• 0:29
  Speaker 2: I'm doing well. Markets are good, weather is good.
• 0:32
  Speaker 1: Tough to complain for sure, So let's get into it.
• 0:36
  Speaker 1: You're the head of equity ETFs at black Rock. It's
• 0:40
  Speaker 1: been it's been a great ride over the last year,
• 0:43
  Speaker 1: two years really since COVID. Actually it's kind of just
• 0:48
  Speaker 1: been up Friday was it was a was a short
• 0:51
  Speaker 1: a short reset. Everybody's talking about a bubble. Everybody's talking
• 0:55
  Speaker 1: about a bubble, panic fear, saying that it is too
• 1:00
  Speaker 1: good to be true. AI Evaluations, How are you looking
• 1:04
  Speaker 1: at this space right now for your ETF portfolio that
• 1:07
  Speaker 1: you guys have in black Rock, in just the market overall?
• 1:11
  Speaker 2: Sure? Well, first off, if you go back ten years,
• 1:14
  Speaker 2: the average return than investor got buying the S and
• 1:17
  Speaker 2: P five hundred was over fifteen percent. That's not normal,
• 1:20
  Speaker 2: that's like double what's normal. So it's been a tremendous
• 1:23
  Speaker 2: ride for investors, frankly just doing kind of the most
• 1:26
  Speaker 2: basic form of investing, which is just getting exposure to
• 1:29
  Speaker 2: a broad asset class like US US stocks. But a
• 1:33
  Speaker 2: lot has changed over the last ten years. In fact,
• 1:37
  Speaker 2: one of the things I think has changed the most
• 1:39
  Speaker 2: is how we think about resilience in the markets. So historically,
• 1:43
  Speaker 2: if you wanted to build a diversified portfolio, you'd buy
• 1:47
  Speaker 2: some stocks and you'd buy some bonds, and usually those
• 1:49
  Speaker 2: two things kind of move in opposite directions, which gives
• 1:51
  Speaker 2: you good diversification. But we've seen over the last couple
• 1:55
  Speaker 2: of years of stocks and bonds are moving together. So
• 1:57
  Speaker 2: it's really hard to get a more diversified portfolio to
• 2:00
  Speaker 2: weather the storm of the selloffs that we've seen here
• 2:03
  Speaker 2: and there over the last couple of years. On top
• 2:06
  Speaker 2: of that, we've seen bouts of volatility, whether it's because
• 2:11
  Speaker 2: of you know, trade relationships, whether it's because of AI,
• 2:14
  Speaker 2: whether it's because of economic doubts. So people have been
• 2:17
  Speaker 2: trying to navigate that and then you know, third, I
• 2:22
  Speaker 2: think a lot of people are just trying to understand
• 2:23
  Speaker 2: kind of where the world is headed. There's so much
• 2:25
  Speaker 2: new technology, there's so much change. People are trying to
• 2:28
  Speaker 2: make more resilient portfolio as they can kind of stay
• 2:30
  Speaker 2: out ahead of all that change. So over the last
• 2:34
  Speaker 2: ten years, again, like a really simple portfolio just did
• 2:37
  Speaker 2: great just on stocks, have stocks, bonds, Like it was
• 2:39
  Speaker 2: really simple. I think things have gotten a little bit
• 2:41
  Speaker 2: more complicated for investors, but that doesn't mean there isn't
• 2:44
  Speaker 2: more opportunity. People just have to think about the world
• 2:46
  Speaker 2: a little bit more granularly than they did in the past.
• 2:51
  Speaker 1: So, but so are you are you? Are you nervous,
• 2:54
  Speaker 1: so concerned that we can have a major cliff moment
• 3:00
  Speaker 1: with stock market goes down forty percent in one year.
• 3:04
  Speaker 2: I mean, flatility has never had of the question. I
• 3:06
  Speaker 2: think overall, we see that the market is resilient. We've
• 3:10
  Speaker 2: seen a tremendous earnings environment over the last quarter or so.
• 3:13
  Speaker 2: Companies are delivering earnings much faster than people expected. You know,
• 3:17
  Speaker 2: you were asking about a bubble. Usually that's tied to
• 3:20
  Speaker 2: artificial intelligence. We actually don't see there's a bubble AI
• 3:23
  Speaker 2: companies grew their earnings faster than their stock prices went
• 3:26
  Speaker 2: up last year. That means valuations actually came down because
• 3:30
  Speaker 2: their earnings are going up faster than their stock price.
• 3:32
  Speaker 2: So like a stock for earning ratio is cheaper. And
• 3:36
  Speaker 2: a lot of this is justified. These AI companies are
• 3:39
  Speaker 2: delivering just tremendous amounts of growth. We looked at one
• 3:42
  Speaker 2: AI company. You know, the unit of sales for an
• 3:46
  Speaker 2: AI company is tokens, right, it's kind of a unit
• 3:48
  Speaker 2: of intelligence. They grew their token sales last year seventeen x.
• 3:56
  Speaker 2: Like a high graft company usually grows seventeen percent, this
• 3:58
  Speaker 2: was seventeen x. Yeah, in AI tokens. And you know, yes,
• 4:06
  Speaker 2: AI companies are growing really quickly. Yes, you know, we've
• 4:13
  Speaker 2: really never seen this kind of rapid escalation and the
• 4:17
  Speaker 2: theme like this, But so far it looks fairly justified
• 4:20
  Speaker 2: given the rapid adoption of artificial intelligence and the total
• 4:23
  Speaker 2: market opportunity.
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  Speaker 4: It feels like AI is, in all rights a defying
• 4:29
  Speaker 4: investment theme of our lifetime. Right, every time you listen
• 4:34
  Speaker 4: to professionals and you kind of just alluded to it.
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  Speaker 4: We've never seen anything like this before, Like this is
• 4:38
  Speaker 4: such a new thing. The way that these companies are growing,
• 4:41
  Speaker 4: Like you said, the revenue is incredible.
• 4:44
  Speaker 3: That the multiples are incredible.
• 4:46
  Speaker 4: What also is happening is the creation of ETFs.
• 4:51
  Speaker 3: I mean it's at a record number.
• 4:53
  Speaker 4: I wonder how you're looking at it from your standpoint, right,
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  Speaker 4: are people going into individual equities or more people looking
• 4:59
  Speaker 4: at ETFs At this point.
• 5:04
  Speaker 2: ETFs have been growing tremendously cliquid quickly, and I think
• 5:06
  Speaker 2: a lot of it is people moving from buying stocks
• 5:08
  Speaker 2: to buying ETFs, going from kind of picking an individual
• 5:12
  Speaker 2: company to buying a basket of companies, And a lot
• 5:15
  Speaker 2: of the reason that's for diversification and simplicity. You know,
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  Speaker 2: a lot of people might buy a semiconductor company because
• 5:20
  Speaker 2: they like AI and they say, you know, I'll buy
• 5:23
  Speaker 2: a big semiconductor company. But instead of doing that and
• 5:27
  Speaker 2: having the risk of one company, you can buy an
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  Speaker 2: ETF that invests in fifty different AI companies. You're going
• 5:33
  Speaker 2: to be diversified across sectors, across geographies, looking across the
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  Speaker 2: AI value chain. So not just a semiconductor company, but
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  Speaker 2: a large language model company, a data company, a company
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  Speaker 2: using artificial intelligence and its products and services digital infrastructure,
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  Speaker 2: names involved in power or real estate. You can access
• 5:51
  Speaker 2: all of that in one trade with an ETF one
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  Speaker 2: called r Earty and it's it's it's just simple for
• 5:58
  Speaker 2: investors to be able to access that entire theme with
• 6:02
  Speaker 2: one click. You could even take it further than just
• 6:04
  Speaker 2: one theme though, So there's ETFs out there that actually
• 6:07
  Speaker 2: are an entire portfolio in one click. So think about
• 6:13
  Speaker 2: you know, usually when people have a four to oh
• 6:14
  Speaker 2: one K in their companies, they have the option to
• 6:18
  Speaker 2: buy its target date sorry it target date fund. You know,
• 6:21
  Speaker 2: I'm going to hire in twenty sixty five, so I'm
• 6:22
  Speaker 2: going to allocate one hundred percent of my four to
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  Speaker 2: one K savings to that target date twenty sixty five fund.
• 6:29
  Speaker 2: Inside that fund their stocks. The responds probably thousands of
• 6:32
  Speaker 2: positions overall. But now you can do that in the
• 6:35
  Speaker 2: ETF as well. It's not just limited to your four
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  Speaker 2: to one K. You can buy an ETF with one
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  Speaker 2: click that gives you a diverse, fied portfolio with thousands
• 6:42
  Speaker 2: of positions.
• 6:44
  Speaker 4: So because I'll just ask to follow Jacob really quickly,
• 6:47
  Speaker 4: because as I'm looking, they're growing so fast, I wonder
• 6:50
  Speaker 4: how you as a company look at a subsector like
• 6:54
  Speaker 4: memory and say hey, there's companies that are moving and
• 6:57
  Speaker 4: this this subsect that is moving at a spinential rate.
• 7:00
  Speaker 3: Right, do we now have to create something.
• 7:04
  Speaker 4: To say we can we need take advantage off, we
• 7:06
  Speaker 4: need to put our community inside of this this subsector.
• 7:09
  Speaker 2: If there's a durable investment case that's doable in an ETF,
• 7:14
  Speaker 2: it's something that will absolutely consider. Some of these themes
• 7:17
  Speaker 2: are a little too narrow that it's really just kind
• 7:19
  Speaker 2: of looking at a couple of companies, not really a
• 7:21
  Speaker 2: picket of companies. And if it's really just about a
• 7:23
  Speaker 2: couple of companies, we don't think it makes sense in
• 7:26
  Speaker 2: an ETF. Today, ETFs are really at their best and
• 7:29
  Speaker 2: they're investing in you know, call it twenty five to
• 7:32
  Speaker 2: a few thousand companies where you're really getting that benefit
• 7:35
  Speaker 2: of diversification. But when it's AI, when it's infrastructure, we
• 7:39
  Speaker 2: see a ton of people looking for ways to play
• 7:41
  Speaker 2: power infrastructures. AI is going to use more electricity demand.
• 7:45
  Speaker 2: If you're looking at defence companies, when you're looking at
• 7:50
  Speaker 2: you know, autonomous vehicles, all of these are very doable
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  Speaker 2: baskets in an ETF. And we and we've built products
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  Speaker 2: for all of those.
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  Speaker 5: As a follow up to the bond market topic that
• 8:00
  Speaker 5: you brought up, it's been six years since the thirty
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  Speaker 5: ten year two year have been down on the long
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  Speaker 5: term trend. Do you think the sixty forty portfolio this
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  Speaker 5: did and if not, what do you think is going
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  Speaker 5: to take for the bond market to stabilize and get
• 8:14
  Speaker 5: back to being a balanced diversification kind of investment For
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  Speaker 5: the sixty forty portfolio.
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  Speaker 2: I mean, the correlations between stocks and bonds have been
• 8:24
  Speaker 2: more resilient than I think people expected. Originally, the narrative was,
• 8:28
  Speaker 2: you know, as rates were going up really quickly, this
• 8:30
  Speaker 2: is why you know, bonds were selling off, and it
• 8:32
  Speaker 2: was also not great for the stock market. A lot
• 8:34
  Speaker 2: of the stock market as tech stocks, they tend to
• 8:36
  Speaker 2: be more sensitive to rate. So rates went up and
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  Speaker 2: everything's sold off together. Everyone kind of thought once rates
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  Speaker 2: peaked and maybe started to come down, you would see
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  Speaker 2: that correlation break, and frankly, it just hasn't broken yet.
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  Speaker 2: So the implication for portfolios is sixty forty used to
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  Speaker 2: be kind of the base case for most people's portfolios.
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  Speaker 2: We think we're probably moving to a fifty to thirty twenty.
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  Speaker 2: That twenty percent of things that are not a stock
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  Speaker 2: or a bond. Think about gold, bitcoin, liquid alternative strategies,
• 9:06
  Speaker 2: think about like hedge, bonds, long short strategies, some private exposures.
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  Speaker 2: Basically just looking for stuff that lives outside of stocks
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  Speaker 2: and bonds, because you're not getting a really diverse, fied
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  Speaker 2: portfolio any anymore just looking at those two assets.
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  Speaker 5: So it to be fifty percent stock, thirty percent bond,
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  Speaker 5: twenty percent alternative. Okay, and is that split fifty percent
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  Speaker 5: bond study, fifty percent stocks, thirty percent bond, twenty percent alternative.
• 9:35
  Speaker 2: That's right, okyeah, Yeah, that's kind of the base case
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  Speaker 2: portfolio for your you know, most most average investor, people
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  Speaker 2: who are younger are going to want more stocks. People
• 9:43
  Speaker 2: in retirement might want more fixed income, but that fifty
• 9:45
  Speaker 2: thirty twenty probably solves most people's allocations.
• 9:48
  Speaker 1: Okay, let's talk about bitcoin ibit, and you know, black
• 9:54
  Speaker 1: Rock obviously one of the largest holders of bitcoin ibit
• 9:59
  Speaker 1: has suffered this year, just like bitcoin has suffered this year,
• 10:02
  Speaker 1: a lot of volatility and recently, you know, went down
• 10:04
  Speaker 1: a lot last week. So are you guys still bullish
• 10:07
  Speaker 1: on bitcoin? What is the outlook what is the plan.
• 10:11
  Speaker 1: I know it was a lot to talk about moving
• 10:13
  Speaker 1: it more into four one k's and having more adoption.
• 10:17
  Speaker 1: A lot of that conversation kind of has not been
• 10:19
  Speaker 1: had recently. It's not it's not in the news obviously
• 10:23
  Speaker 1: because bitcoin's prices down, so nobody's really talking about it
• 10:25
  Speaker 1: in that form of adoption it. So what's what's what's
• 10:29
  Speaker 1: the what's the message for ibit and bitcoin as a
• 10:32
  Speaker 1: whole in regards to black rocks thinking in regards to.
• 10:35
  Speaker 2: It, I mean, our long term case hasn't changed. Bitcoin
• 10:38
  Speaker 2: is a monetary alternative. So as people look for things
• 10:42
  Speaker 2: outside of the US dollar, outside of other FIAC currencies
• 10:45
  Speaker 2: issued by centralized governments that they want to have be decentralized,
• 10:51
  Speaker 2: non sovereign, global in nature, bitcoin will tend to benefit.
• 10:56
  Speaker 2: And you know, we've seen we've seen bitcoin do well
• 10:58
  Speaker 2: over the longer term. If you zoom out over three
• 11:00
  Speaker 2: or four years, the performance is still very strong. Similarly,
• 11:03
  Speaker 2: it's you know, it's spiritual cousins gold and that's done
• 11:06
  Speaker 2: quite well over the same period as well, because people
• 11:08
  Speaker 2: look at gold as a monetary alternative. As you see
• 11:11
  Speaker 2: rising dead of different governments around the world, you know,
• 11:14
  Speaker 2: distrust of governments and FIAC currencies, et cetera. So, you know,
• 11:18
  Speaker 2: the case for bitcoin is. The fundamental case for bitcoin,
• 11:20
  Speaker 2: I think, is still very strong. In the near term.
• 11:25
  Speaker 2: A lot of it is driven by supply and demand dynamics,
• 11:27
  Speaker 2: and we actually know what the supply of bitcoin is
• 11:29
  Speaker 2: at any given time, so largely it's driven by shifts
• 11:32
  Speaker 2: in demand and sentiment. But that tends to be a
• 11:34
  Speaker 2: much more shorter term phenomenon. Over the longer term, I
• 11:38
  Speaker 2: think it's really about education, more people understanding what bitcoin
• 11:42
  Speaker 2: can do in a portfolio. This is not just about
• 11:45
  Speaker 2: individual investors. This is about financial advisors across the United States.
• 11:49
  Speaker 2: This is about institutional investors like sovereign wealth funds and
• 11:53
  Speaker 2: endowments making more strategic allocations. A lot of that education
• 11:58
  Speaker 2: process is happening, but it takes time, and it happens
• 12:02
  Speaker 2: kind of quietly. You know, people don't just wake up
• 12:05
  Speaker 2: one day and buy bitcoin. It takes you know, for
• 12:07
  Speaker 2: professional investers, it can take many months or years to
• 12:09
  Speaker 2: get to that level of comfort. So all of that
• 12:12
  Speaker 2: is continuing to happen. But in the meantime, the price
• 12:16
  Speaker 2: of bitcoin, you know, as vulnerable as it has been
• 12:18
  Speaker 2: over its entire history.
• 12:21
  Speaker 3: Yeah, I wonder if the thesis is the same around ethereum.
• 12:25
  Speaker 4: Obviously blockchain, where we talk about platform and we talk
• 12:27
  Speaker 4: about digital assets. I mean, people have Bitcoin, but ethereum
• 12:32
  Speaker 4: it used to be in the conversation.
• 12:34
  Speaker 3: I feel like it's kind of been left out.
• 12:35
  Speaker 4: I wonder if the thesis is still the same when
• 12:38
  Speaker 4: you look at you know, the Etheroreum trust ETF that
• 12:41
  Speaker 4: you guys hold, is it a similar outlook for this
• 12:44
  Speaker 4: as well?
• 12:47
  Speaker 2: I think there's certainly some similarities, So I would say
• 12:49
  Speaker 2: the similarity is our education is definitely a key piece
• 12:52
  Speaker 2: of the puzzle, where more people understanding what ethereum is,
• 12:54
  Speaker 2: what blockchain technology is and how it can be used
• 12:58
  Speaker 2: is a really important part of the story. But Ethereum
• 13:02
  Speaker 2: we just look at very differently than bitcoin. You know,
• 13:04
  Speaker 2: if Bitcoin's spiritual cousin is gold, the theory of spiritual
• 13:07
  Speaker 2: cousin is really like the Apple app store, you know,
• 13:11
  Speaker 2: it's really it's a decentralized computer. It's a platform for
• 13:14
  Speaker 2: being able to use technology for decentralized software, things like
• 13:19
  Speaker 2: stable coins, tokenized real world assets. There's growing interest in
• 13:27
  Speaker 2: these use cases, but we're still early so I think
• 13:31
  Speaker 2: just the more we hear about tokenization, the more value
• 13:33
  Speaker 2: it can provide to defy and stable coins. I think
• 13:37
  Speaker 2: the more powerful that narrative is going to be over time.
• 13:42
  Speaker 5: For the investor who may be worried about the length
• 13:44
  Speaker 5: of how long the AI trade will last, how long
• 13:46
  Speaker 5: do you think we have for the AI investment and
• 13:49
  Speaker 5: what do you think are some second or third layer
• 13:52
  Speaker 5: opportunities are coming in the future for us to be
• 13:55
  Speaker 5: able to invest in.
• 13:56
  Speaker 2: It's a great question, and I would say there's a
• 13:59
  Speaker 2: there's a diference between the AI trade and the AI
• 14:02
  Speaker 2: investment because I think the AI trade applies a little
• 14:05
  Speaker 2: bit more of a shorter term outlook, and a lot
• 14:07
  Speaker 2: of that has been focused on semiconductor stocks and large
• 14:10
  Speaker 2: line model developers. The AI investment across the value chain
• 14:15
  Speaker 2: is going to be a decade. This is just where
• 14:18
  Speaker 2: you're seeing entire economies and business models shift to accommodate
• 14:23
  Speaker 2: artificial intelligence, much like we saw with the Internet thirty
• 14:26
  Speaker 2: forty years ago. What's kind of the next stage. We're
• 14:31
  Speaker 2: looking at it from a couple of different angles. I
• 14:33
  Speaker 2: would say right now, really the beneficiaries have been more
• 14:36
  Speaker 2: in the infrastructure layer, the data centers, the power infrastructure,
• 14:40
  Speaker 2: and the semiconductors are a lot of today's winners, and
• 14:43
  Speaker 2: it makes sense because that's where the revenue is going.
• 14:45
  Speaker 2: You have to build a data center, you have to
• 14:46
  Speaker 2: fill up with semi conductors, and you have to pay
• 14:47
  Speaker 2: the power utility or buy some power generators to be
• 14:51
  Speaker 2: able to turn on these AI machines. The next phase,
• 14:57
  Speaker 2: I think will be a little bit more about the
• 14:58
  Speaker 2: implementation of AI. You could look at this at some
• 15:02
  Speaker 2: of the companies that are adopting artificial intelligence. They're not
• 15:06
  Speaker 2: the builders of AI. They're just companies that are being
• 15:08
  Speaker 2: smart about using it and it can really benefit their business.
• 15:13
  Speaker 2: And another group that I think will be really interesting
• 15:17
  Speaker 2: is more about real world AI. I think about autonomous vehicles, robots,
• 15:22
  Speaker 2: et cetera. The ways that AI is being used, not
• 15:25
  Speaker 2: just sort of in a digital sense when you interact
• 15:28
  Speaker 2: with CHATGBT, but more in a physical world sense. That's
• 15:31
  Speaker 2: still in the really early stages because frankly, that's much
• 15:33
  Speaker 2: harder AI, it's more AI or is more compute intensive.
• 15:37
  Speaker 2: So that's where I think over the next several years
• 15:39
  Speaker 2: will start to see more growth as well.
• 15:43
  Speaker 1: Are you more bullish on the newer companies we just
• 15:47
  Speaker 1: talked about Marvel, we talked about obviously, Micron, a variety
• 15:50
  Speaker 1: of these companies, or the established companies like the Googles
• 15:55
  Speaker 1: of the world, where they have moved slower, but they're
• 16:00
  Speaker 1: probably in position to kind of still be the leaders
• 16:03
  Speaker 1: if they can maintain their dominance.
• 16:06
  Speaker 2: I mean, that's the big question, right maintaining the dominance.
• 16:09
  Speaker 2: I think there's huge advantages to the biggest companies in
• 16:13
  Speaker 2: the world. They have some of the most data proprietary data,
• 16:17
  Speaker 2: whether it's their social media that they operate, whether it's
• 16:21
  Speaker 2: the software that they operate, et cetera. These guys have data.
• 16:24
  Speaker 2: They have some of the most software engineers on the
• 16:26
  Speaker 2: planet because this is what they've been doing for decades.
• 16:29
  Speaker 2: And then they have the lowest cost of capital. These
• 16:31
  Speaker 2: are huge metacap companies that get to issue debt really
• 16:34
  Speaker 2: cheaply compared to small businesses. And a lot of this
• 16:38
  Speaker 2: artificial intelligence game is literally just the math of how
• 16:41
  Speaker 2: much data, how much engineering, and how much does it
• 16:43
  Speaker 2: cost to be able to fund all these capital expenditures.
• 16:46
  Speaker 2: I mean, these companies are going to spend close to
• 16:47
  Speaker 2: a trillion dollars this year on cappeck, so their cost
• 16:50
  Speaker 2: of financing is actually a really important part of this puzzle.
• 16:54
  Speaker 2: But with that being said, really small innovative companies can
• 16:57
  Speaker 2: move quickly and do things that others can't, so I
• 17:00
  Speaker 2: think there will be there will be a balance. I mean,
• 17:02
  Speaker 2: certainly we're seeing some new companies that could be ipoing
• 17:06
  Speaker 2: this year that are fast and nimble and newer, so
• 17:10
  Speaker 2: it will be a little bit of a blend. But
• 17:12
  Speaker 2: I think some of these big companies have really entrenched
• 17:14
  Speaker 2: modes that are going to be difficult to display.
• 17:17
  Speaker 4: I wonder, as you're watching it from you know, your perspective,
• 17:20
  Speaker 4: what are some of the themes that you're seeing the
• 17:23
  Speaker 4: younger investors move into ETFs are options straight, what are
• 17:28
  Speaker 4: some of the themes that you're seeing from your side?
• 17:30
  Speaker 2: I mean, definitely huge growth of individual investors participating in
• 17:34
  Speaker 2: the markets. This started with COVID. You saw about forty
• 17:37
  Speaker 2: million accounts in the United States open up during COVID
• 17:39
  Speaker 2: of individual investors starting to participate in the markets. A
• 17:42
  Speaker 2: lot of those new investors using ETFs. Is there d be
• 17:45
  Speaker 2: a gulf choice to express views. Some people just want
• 17:48
  Speaker 2: to buy the broad market and sit and sit there.
• 17:51
  Speaker 2: And hold hold their their funds for a long time.
• 17:53
  Speaker 2: Other people a little more tactical, a little more trading oriented,
• 17:58
  Speaker 2: but either way they're using ET to express those views.
• 18:02
  Speaker 2: A couple of trends. That one is a huge amount
• 18:05
  Speaker 2: of growth in thematic investing, and it just makes sense
• 18:08
  Speaker 2: this is what's driving the markets today. Markets are up
• 18:10
  Speaker 2: and down because of AI, because of geopolitics, because of
• 18:14
  Speaker 2: different infrastructure needs. Those are themes playing out in real time,
• 18:20
  Speaker 2: So it makes sense that people are increasingly thinking about
• 18:22
  Speaker 2: their portfolio, not through traditional classifications of US first international
• 18:27
  Speaker 2: or technology versus healthcare, but through themes like AI and geopolitics.
• 18:33
  Speaker 2: The second though, is definitely the growth of option investing.
• 18:38
  Speaker 2: A lot of this is really about investors trying to
• 18:40
  Speaker 2: get more control over their investments. You know, what are
• 18:43
  Speaker 2: you trying to get out of your investment? Are you
• 18:45
  Speaker 2: trying to get income which you can use options to
• 18:48
  Speaker 2: generate more income by selling covered calls? Are you trying
• 18:51
  Speaker 2: to protect against the downside? Another thing you can do
• 18:55
  Speaker 2: using options really kind of buy protection, buy insurance using products.
• 19:01
  Speaker 2: So option growth has has has been a huge piece
• 19:04
  Speaker 2: of the puzzle. And then we mentioned this before as well.
• 19:06
  Speaker 2: Digital assets just a huge amount of frankly, taking two
• 19:12
  Speaker 2: worlds that have been fairly distinct, the traditional finance world
• 19:16
  Speaker 2: and the decentralized finance world, and then being pulled closer together.
• 19:20
  Speaker 2: You know. I it's a great example of bitcoin and
• 19:23
  Speaker 2: decentralized finance asset being brought into the drad FI world
• 19:27
  Speaker 2: via an ETF, and we're increasingly seeing these two worlds
• 19:31
  Speaker 2: interact closer and closer.
• 19:34
  Speaker 5: In your opinion, what should people be looking at inside
• 19:37
  Speaker 5: of the ETF before they actually buy if they haven't
• 19:40
  Speaker 5: invested in one before.
• 19:42
  Speaker 2: I mean the number one things, look at the holdings,
• 19:44
  Speaker 2: what is it actually investing in? You know, might have
• 19:47
  Speaker 2: a name, the ETF will have a name, but what
• 19:50
  Speaker 2: is what's being reflected in that name? Is that really
• 19:52
  Speaker 2: what you see under the hood? And is that the
• 19:53
  Speaker 2: kind of exposure you want. There's a lot of different
• 19:56
  Speaker 2: ways to build an AI ETF. There's a lot of
• 19:58
  Speaker 2: ways to build a US large at BTF, and so
• 20:01
  Speaker 2: I think investors, well, they have more choice than ever
• 20:04
  Speaker 2: before because there's so many ETFs available to them. It
• 20:08
  Speaker 2: does make the homework a little bit harder trying to
• 20:10
  Speaker 2: understand what's really the best fit. So the holdings matter,
• 20:14
  Speaker 2: the fees matter, the liquidity matters. How easy is it
• 20:17
  Speaker 2: to trade that ETF? All of those things come into
• 20:20
  Speaker 2: play to make sure you're buying the right product for
• 20:21
  Speaker 2: your for your portfolio.
• 20:23
  Speaker 3: Can I follow up real quick? Yeah?
• 20:25
  Speaker 5: Is there a weighting in your opinion that is too dangerous?
• 20:30
  Speaker 5: So like if a ETF, let's say, is weighted towards
• 20:32
  Speaker 5: I don't know, thirty eight percent of forty percent, at
• 20:35
  Speaker 5: what point is it too dangerous to Maybe not that
• 20:38
  Speaker 5: you guys did a black rock, but if they're looking
• 20:39
  Speaker 5: at other ETFs, what weighting is too dangerous in your opinion?
• 20:46
  Speaker 2: It's a great question. I mean to everyone, it's going
• 20:48
  Speaker 2: to be different, right if your option was buying an
• 20:50
  Speaker 2: individual stock versus buying an ETF that even is very
• 20:53
  Speaker 2: heavily concentrated in one position, but still provides exposure to
• 20:56
  Speaker 2: other stocks as well, and on a relative basis, that
• 20:59
  Speaker 2: ETF will still be more diversified. What's happening in the
• 21:04
  Speaker 2: markets today broadly, though, is there's more and more concentration.
• 21:08
  Speaker 2: So the top ten names in the S and P
• 21:09
  Speaker 2: five hundred make up forty percent of the index. That's
• 21:13
  Speaker 2: historically high. So for any investor. I think concentration is
• 21:18
  Speaker 2: a big thing to focus on and for your long
• 21:21
  Speaker 2: term investors that want to manage their risk and make
• 21:24
  Speaker 2: sure they're diversified, I think they need to think about this,
• 21:28
  Speaker 2: and that means maybe you don't just buy a market
• 21:31
  Speaker 2: cap way to ETF. Maybe you buy an equal way
• 21:33
  Speaker 2: to ETF that's spreading its bats equally across five hundred
• 21:36
  Speaker 2: plus companies. Maybe you buy MidCap and small cap companies.
• 21:40
  Speaker 2: A lot of investors forgot about international investing over the
• 21:42
  Speaker 2: last ten years because International box didn't do so great,
• 21:44
  Speaker 2: but last year they did wonderfully. So just thinking about
• 21:48
  Speaker 2: kind of getting going beyond just those top names for
• 21:52
  Speaker 2: more diversification. Yes, I said, those top names might do
• 21:54
  Speaker 2: really well in the AI world, but it's still useful
• 21:56
  Speaker 2: to have diversification across broader markets.
• 22:01
  Speaker 1: Well, Jay, you want to thank you for coming on
• 22:03
  Speaker 1: before we leave, you talk about to investments. I know
• 22:05
  Speaker 1: you guys have come last year and you know we
• 22:08
  Speaker 1: always appreciate you guys coming. Do you have any plans
• 22:11
  Speaker 1: that you can talk about this year?
• 22:13
  Speaker 2: If we invest us, we're setting a few folks from
• 22:15
  Speaker 2: the team. They're excited to go down there. Back to Atlanta.
• 22:19
  Speaker 2: I think it's really just about hearing from from investors
• 22:22
  Speaker 2: what's on their minds, trying to help people with education
• 22:24
  Speaker 2: as they think about kind of what's how the investing
• 22:27
  Speaker 2: landscape has changed in the last year. I mean, I
• 22:28
  Speaker 2: think I'm sure we talked about AI last year, but
• 22:30
  Speaker 2: AI's evolved a lot in the last twelve months. I'm
• 22:33
  Speaker 2: sure we talked about retirement last year. Even the retirement
• 22:35
  Speaker 2: landscape has changed as we think about that shift from
• 22:38
  Speaker 2: the sixty forty portfolio to the fifty to thirty twenty.
• 22:41
  Speaker 2: So investing is always an interesting topic and we're excited
• 22:45
  Speaker 2: to hear from from investors.
• 22:48
  Speaker 1: Well, appreciate it, appreciate it. Thank you so much to
• 22:51
  Speaker 1: having you guys, and thank you for your time.
• 22:53
  Speaker 2: Thanks for having me.
• 22:55
  Speaker 3: Well, I appreciate you. Have a good one.
• 22:56
  Speaker 2: Take care.
• 23:00
  Speaker 3: All right, got to keep.
• 23:01
  Speaker 5: That long term view. Yeah, always break guests. Yeah, yeah,
• 23:05
  Speaker 5: we're only in what year three? Yeah, a lot more
• 23:08
  Speaker 5: time to go. You have a lot more time to go.
• 23:11
  Speaker 3: We do, we do.
• 23:12
  Speaker 4: And that interesting idea, like they're looking at it from
• 23:16
  Speaker 4: the institutional side, so like, yes, we can talk and
• 23:19
  Speaker 4: when you hear it coming from the institutional side of
• 23:21
  Speaker 4: how they're thinking about AI and how they're seeing We've
• 23:23
  Speaker 4: never seen this before. This may not be about it's
• 23:27
  Speaker 4: interesting to hear that that perspective, but I think there's
• 23:29
  Speaker 4: some similarities, like when we were talking about brokerages, when
• 23:32
  Speaker 4: we're talking about Robinhood and what's leading the charge, similar things. Right,
• 23:36
  Speaker 4: the ETF trading options has changed everything and bitcoin right
• 23:43
  Speaker 4: that that that idea of alternative assets to invest in
• 23:47
  Speaker 4: has really catapulted. We could have I mean, they had
• 23:50
  Speaker 4: probably market and predictive markets that have changed it as well,
• 23:54
  Speaker 4: but that core fundamental, those three have changed the way
• 23:57
  Speaker 4: trading has developed over the past three or four years
• 24:01
  Speaker 4: for sure.
• 24:01
  Speaker 1: So yeah, So once again shout out to black Rock.
• 24:04
  Speaker 1: They will participate. They will be participating in Investmentest Friday.
• 24:08
  Speaker 1: They have a workshop on Friday, just to kind of
• 24:11
  Speaker 1: give you guys a quick overview. If you've never been
• 24:14
  Speaker 1: Friday invest Fest starts Friday, so you probably should get
• 24:18
  Speaker 1: there Thursday to get your get your tickets, and get
• 24:20
  Speaker 1: your badges so you can have access all weekend. But
• 24:22
  Speaker 1: Friday is all education, workshops, presentations. This is stuff inside
• 24:28
  Speaker 1: the NDO marketplace. We have two other we have the
• 24:32
  Speaker 1: other stage and then we have the theater as well
• 24:36
  Speaker 1: right here. That's upstairs. Upstairs the first year that we've
• 24:38
  Speaker 1: done that, so logistically it's something new that we added
• 24:43
  Speaker 1: this year, but it's upstairs, so just be aware of that.
• 24:45
  Speaker 1: But this is all workshops. These are all workshops. You
• 24:48
  Speaker 1: can say like breakout sessions in a sense where it's
• 24:52
  Speaker 1: just all education. Uh, this is very much hands on education,
• 24:58
  Speaker 1: learning from companies like black Rock and highly skilled professionals.
• 25:02
  Speaker 1: Miss Business has a presentation that she's going to be
• 25:05
  Speaker 1: doing a variety of different things. Will be happening on Friday,
• 25:08
  Speaker 1: so that's important a lot of time people may not
• 25:10
  Speaker 1: be familiar with that. And Best Fast starts Friday, but
• 25:14
  Speaker 1: you should register on Thursday. Register on Thursday, come Friday.
• 25:18
  Speaker 1: I think it starts like nine o'clock in the morning
• 25:20
  Speaker 1: on Friday, Friday, all day Friday, then Friday night is
• 25:24
  Speaker 1: VIP black Tie affair at a different location. It's not
• 25:28
  Speaker 1: at GWCC, it's a different location for VIP holders. And
• 25:31
  Speaker 1: then Saturday and then Sunday, but it does not start Saturday.
• 25:37
  Speaker 1: Starts Friday, Friday and Friday is all day education workshops panels,
• 25:46
  Speaker 1: hands on learning from industry experts. That's, like, you know,
• 25:54
  Speaker 1: very important, and if we're gonna be very honest, it's
• 25:58
  Speaker 1: not easy to be able to talk to some about
• 26:00
  Speaker 1: the Black Rock about their thoughts on the market.
• 26:03
  Speaker 5: This is normally done on an institutional They don't come
• 26:06
  Speaker 5: and talk to retail. So I would argue you get
• 26:08
  Speaker 5: there Wednesday night so you can be rested for Thursday,
• 26:12
  Speaker 5: and then Friday you're ready to hit the ground running.
• 26:14
  Speaker 5: Because if they give you a roadmap for the next
• 26:16
  Speaker 5: six or seven years in their presentation, you won't even
• 26:20
  Speaker 5: have to guess what to invest in.
• 26:21
  Speaker 3: You just have to know the timeline.
• 26:23
  Speaker 5: So get to that session early, take notes, because that
• 26:26
  Speaker 5: information alone can change your life.
• 26:29
  Speaker 4: I think that's the part that gets overlooked is that,
• 26:33
  Speaker 4: I mean Blackrock, we're talking about the largest asset manager
• 26:36
  Speaker 4: in the world right talking to retail customers.
• 26:41
  Speaker 3: I mean, we've been in those offices. Not something that
• 26:44
  Speaker 3: happens too often.
• 26:45
  Speaker 4: The fact that this is the third year that they're
• 26:47
  Speaker 4: going to be done in the vest best and they're
• 26:49
  Speaker 4: going to be talking about what's actually happening in the market,
• 26:51
  Speaker 4: how you can benefit from it, how you can create income,
• 26:54
  Speaker 4: how you can create turn dividends, into income. All the
• 26:57
  Speaker 4: things eats, all the things talk directly to you. It's
• 27:01
  Speaker 4: a very very rare moment.
• 27:03
  Speaker 5: Have your questions ready, Like for me, I've asked a
• 27:06
  Speaker 5: sixty forty question to fifteen people. He was the first
• 27:10
  Speaker 5: one to say, is now is fifty thirty twenty? Like
• 27:13
  Speaker 5: just that little calibration. I've asked everyone under the sun.
• 27:17
  Speaker 5: He was the only one that kind of gave a formula,
• 27:19
  Speaker 5: because the institutions normally don't let those leak out until
• 27:22
  Speaker 5: ten and fifteen years later. Have two or three great
• 27:25
  Speaker 5: questions prepared for those sessions. They can change your life
• 27:28
  Speaker 5: for sure.