Latest / Trillions / New ETFs to Watch: MANGOS, Tax Tricks and Boring Bitcoin

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New ETFs to Watch: MANGOS, Tax Tricks and Boring Bitcoin · Trillions

• 0:02
  Speaker 1: Bloomberg Audio Studios.
• 0:04
  Speaker 2: Podcasts.
• 0:05
  Speaker 3: Radio. News. It's tough.
• 0:09
  Speaker 1: You know, it's tough to be that small trying to
• 0:12
  Speaker 1: come in on something where you're like the sixth or
• 0:13
  Speaker 1: seventh photonics. But I do like the name Aura.
• 0:18
  Speaker 3: Why?
• 0:19
  Speaker 1: Well, because my 15-year-old loves using that word all the time.
• 0:22
  Speaker 1: I apparently have negative aura, but that's a whole other story.
• 0:29
  Speaker 3: Welcome to Trillions. I'm Joel Weber.
• 0:30
  Speaker 1: And I'm Eric Balchunas.
• 0:31
  Speaker 3: Eric, you know what the world does not have enough of?
• 0:34
  Speaker 1: Restaurants that have kiddie play centers.
• 0:37
  Speaker 3: Not expecting that.
• 0:38
  Speaker 1: Isn't it crazy there's not more of those?
• 0:39
  Speaker 3: They took them out.
• 0:41
  Speaker 1: Chick-fil-A has one. That's why it's so popular.
• 0:42
  Speaker 3: McDonald's used to have them. They don't have them anymore.
• 0:44
  Speaker 3: Burger King, all gone.
• 0:45
  Speaker 1: But yeah, need more of those.
• 0:47
  Speaker 3: I was going to say exchange-traded funds.
• 0:49
  Speaker 1: That too.
• 0:49
  Speaker 3: There's thousands of them. Thousands.
• 0:51
  Speaker 1: No, there's too many, honestly.
• 0:53
  Speaker 3: But in August, there's been 128 new launches last month.
• 0:59
  Speaker 3: We need more.
• 0:59
  Speaker 1: Yeah, there are six or seven launching a day this year.
• 1:03
  Speaker 1: That's the pace we're at. It's mind-numbing. And I can't
• 1:07
  Speaker 1: keep up with them. But yeah, it's pouring right now.
• 1:11
  Speaker 3: But we're back with new ones to watch because there's
• 1:14
  Speaker 3: always some gems out there. Yep. And joining us to
• 1:19
  Speaker 3: walk through our three new ETFs to watch, Isabel Lee,
• 1:23
  Speaker 3: cross-asset reporter at Bloomberg News. Welcome back, Isabel.
• 1:26
  Speaker 4: Thank you. Excited to be here, as always.
• 1:30
  Speaker 3: This time on Trillions, new ETFs to watch. Okay, Eric,
• 1:35
  Speaker 3: what's our big hit this episode?
• 1:39
  Speaker 1: So I just sort them by assets and I look, okay,
• 1:41
  Speaker 1: what was the one with the most assets so far
• 1:43
  Speaker 1: this month? And the answer is kind of a shocker,
• 1:45
  Speaker 1: the investment house ETF, TIH. Never heard of it. It
• 1:50
  Speaker 1: sounds like a one-off and I looked, it is under
• 1:52
  Speaker 1: the white label ETF architect. So then I'm like, it's
• 1:54
  Speaker 1: probably a 351 exchange.
• 1:56
  Speaker 3: And it is.
• 1:57
  Speaker 1: But it has, I believe, 600 million. That's a lot
• 2:00
  Speaker 1: for a movie.
• 2:00
  Speaker 3: Reminder for people who don't know what a 351 conversion is.
• 2:03
  Speaker 1: So if you have, let's say you have a stock
• 2:06
  Speaker 1: or two and they've had so much gains and you
• 2:10
  Speaker 1: just don't want to realize those gains now, there's a
• 2:12
  Speaker 1: way to work with an ETF issuer to diversify your
• 2:16
  Speaker 1: portfolio and move those stocks into a diversified ETF and
• 2:21
  Speaker 1: defer your tax on that. And that way you can have...
• 2:25
  Speaker 1: It's sort of like saying, hey, I have Navidi in
• 2:27
  Speaker 1: this other stock and they're like really, really have a
• 2:30
  Speaker 1: lot of gains and I don't want to realize them.
• 2:32
  Speaker 1: So let me move them. I wish I had just
• 2:34
  Speaker 1: like a Vanguard fund instead, but I don't want to
• 2:36
  Speaker 1: sell those and buy Vanguard because it's a huge tax hit.
• 2:38
  Speaker 1: So you can kind of merge those into a Vanguardian
• 2:41
  Speaker 1: ETF and have a diversification and then defer your gains.
• 2:45
  Speaker 1: You don't lose the basis that you bought it at.
• 2:47
  Speaker 1: So you do pay, but you can defer. And there's
• 2:49
  Speaker 1: been a couple of Bloomberg News articles on it. And
• 2:52
  Speaker 1: there's a spectrum.
• 2:52
  Speaker 3: Much more popular.
• 2:53
  Speaker 1: Yeah. Yeah. There's a spirit of the law and they're
• 2:56
  Speaker 1: pushing it a little. But this one looks pretty straightforward
• 2:59
  Speaker 1: under ETF architect. And this is a growing business. I
• 3:02
  Speaker 1: believe $ 17 billion worth of these.
• 3:04
  Speaker 5: We have written a lot about these stories and actually
• 3:07
  Speaker 5: getting to the bottom of who is actually doing this,
• 3:09
  Speaker 5: the families. It's becoming harder and harder, although some are
• 3:12
  Speaker 5: out there. Like in our story, we wrote Melvin Capital.
• 3:15
  Speaker 5: That's like, you know, the famous Gabe Plotkin, who we
• 3:19
  Speaker 5: all knew him from the GameStop era and a.
• 3:21
  Speaker 4: Lot of other rich families.
• 3:22
  Speaker 5: It's not illegal, but it's just to Eric's point, I
• 3:25
  Speaker 5: think you just don't want to get any attention when
• 3:29
  Speaker 5: it comes to lots of money and lots of taxes.
• 3:32
  Speaker 5: And I looked into this ETF and they hold all
• 3:34
  Speaker 5: the big tech companies that you can imagine. I mean,
• 3:37
  Speaker 5: all of these tech bros out there, I think they're
• 3:39
  Speaker 5: just so unimaginably rich. I'm sure you've seen this meme
• 3:43
  Speaker 5: on Twitter or X now, Eric, like the SK Hynix
• 3:46
  Speaker 5: or Samsung bros. They're just so darn rich now.
• 3:50
  Speaker 1: Yeah, I think it's probably more of the older generation,
• 3:53
  Speaker 1: I think, generally, because they have been in this market
• 3:56
  Speaker 1: now for 20, 30 years. And they have a lot
• 3:58
  Speaker 1: of gains and they hate taxes. And honestly, this move
• 4:01
  Speaker 1: has been going on for a long time in the
• 4:03
  Speaker 1: institutional world. Like if you're in the really, really rich bracket,
• 4:07
  Speaker 1: you could just call up your banker, basically, and do a...
• 4:10
  Speaker 1: You can convert your stock into what's called an exchange fund.
• 4:14
  Speaker 3: Yeah.
• 4:14
  Speaker 1: So this is just democratizing that move. Now, what's interesting
• 4:18
  Speaker 1: is they actually open these up. So in a Schwab account,
• 4:20
  Speaker 1: you can get in on these. So not all of
• 4:22
  Speaker 1: them are done like bespoke. There's actually opening up to
• 4:24
  Speaker 1: just regular people.
• 4:25
  Speaker 4: Mm-hmm.
• 4:26
  Speaker 1: Long story short, huge trend, kind of complex, but generally
• 4:29
  Speaker 1: a tax story. So when you look at the holdings
• 4:31
  Speaker 1: of this, it just looks like the S & P.
• 4:33
  Speaker 1: It's nothing special. Nobody's bought it since this.
• 4:35
  Speaker 3: I was going to ask. No. So the flows are
• 4:38
  Speaker 3: like a one-time event effectively? Yeah.
• 4:40
  Speaker 1: They're not launching this thinking, let's get all this money.
• 4:42
  Speaker 1: So I was hesitant to pick it, but I thought
• 4:45
  Speaker 1: it was a good time to talk about this because
• 4:46
  Speaker 1: there's been a ton of news articles on it. And
• 4:47
  Speaker 1: I was just at the ETF Architect had their annual event,
• 4:50
  Speaker 1: which I speak at every other year. And it was
• 4:53
  Speaker 1: a really good event. But I'd say a third of
• 4:56
  Speaker 1: the sessions were on tax strategies. And the guy, Brett Sullivan,
• 5:00
  Speaker 1: who's really known for this, he's a specialist, he was
• 5:04
  Speaker 1: there talking about it. I mean, and his general message was, look,
• 5:07
  Speaker 1: you have to be smart about this. And you have
• 5:11
  Speaker 1: to adhere to some basic rules and principles. You can't
• 5:14
  Speaker 1: go too hog wild. And I agree with that. I
• 5:16
  Speaker 1: think ETF businesses, though, they like to push the envelope.
• 5:20
  Speaker 1: So I think what now the Treasury may look at
• 5:22
  Speaker 1: this And there may be a line drawn somewhere. I
• 5:25
  Speaker 1: won't get into details, but it has to do with
• 5:26
  Speaker 1: how many stocks you can come in with and how
• 5:29
  Speaker 1: to diversify. There's like percentages.
• 5:31
  Speaker 3: Because I'm the house now, says Scott Besson.
• 5:34
  Speaker 4: You are the house now.
• 5:35
  Speaker 1: I know.
• 5:35
  Speaker 3: I'm the house now. You don't want to cross the house, man.
• 5:38
  Speaker 1: I am the law.
• 5:39
  Speaker 3: Yeah.
• 5:39
  Speaker 1: That's what that reminds me of.
• 5:40
  Speaker 3: I'm the captain now. Yeah.
• 5:41
  Speaker 1: I'm the captain.
• 5:42
  Speaker 3: Yeah.
• 5:42
  Speaker 1: Okay.
• 5:42
  Speaker 2: So if I have the money and I want to
• 5:46
  Speaker 2: do one of these 351 conversions and someone creates this
• 5:49
  Speaker 2: ETF for me, what are– How much are they charging
• 5:52
  Speaker 2: in the basis points in this ETF?
• 5:54
  Speaker 3: Like, is there a silver lining in this ETF, which
• 5:57
  Speaker 3: is that maybe it's cheap?
• 6:00
  Speaker 5: It's 100 basis points, Joel. So I'm not sure if
• 6:03
  Speaker 5: you'd want to do that. It's kind of pricey for...
• 6:06
  Speaker 5: Is it.
• 6:07
  Speaker 3: Pricey, Eric?
• 6:08
  Speaker 1: I don't totally understand the high fee, to be honest
• 6:10
  Speaker 1: with you. So that... And if you look at the.
• 6:12
  Speaker 3: Maybe it's the moat.
• 6:14
  Speaker 1: If you look at the stocks, I mean, you can
• 6:15
  Speaker 1: get that for three bips now, too.
• 6:17
  Speaker 3: So I.
• 6:18
  Speaker 1: This is not about a product that they're trying to
• 6:21
  Speaker 1: get investors into, I don't think. However, I've seen bespoke
• 6:24
  Speaker 1: products come in. There's one that was recently put out
• 6:27
  Speaker 1: that CalPERS seeded with State Street. And a lot of
• 6:30
  Speaker 1: times those are pretty low cost because I think State
• 6:32
  Speaker 1: Street's like, look, we have this anchor tenant. Let's make
• 6:34
  Speaker 1: it lower fee and competitive just in case other people
• 6:36
  Speaker 1: want to come in. This one just doesn't seem like
• 6:38
  Speaker 1: it cares, which is fine. There's a group of people
• 6:44
  Speaker 1: who convert separate accounts. ETFs are just so damn benefit
• 6:48
  Speaker 1: rich that people convert a lot of things into them.
• 6:51
  Speaker 1: And not everybody cares about getting new investors. Most of
• 6:54
  Speaker 1: them do. This is just an example of one that doesn't.
• 6:56
  Speaker 1: But yeah, that It's a new world. You know, normally
• 7:00
  Speaker 1: I would go to the top of the list and
• 7:01
  Speaker 1: see like a BlackRock or Vanguard ETF. And now you
• 7:03
  Speaker 1: never know what you're going to see up there.
• 7:04
  Speaker 5: I'm glad you picked this because, again, it shows that
• 7:06
  Speaker 5: asset managers are increasingly using tax efficient packages and ETF
• 7:09
  Speaker 5: is one of them. And you got into a healthy
• 7:11
  Speaker 5: debate on X about this. And I saw it, that
• 7:14
  Speaker 5: it's tax deferral. It's not really like you're never going
• 7:17
  Speaker 5: to pay taxes anymore. And I think that's the important
• 7:19
  Speaker 5: thing that people just need to remember.
• 7:20
  Speaker 3: Yeah.
• 7:21
  Speaker 1: I mean, the headline will say DODGE. you know, from Bloomberg.
• 7:25
  Speaker 1: And I understand you could do mental gymnastics and say
• 7:28
  Speaker 1: it is a dodge and it, well, you'll get more clicks,
• 7:32
  Speaker 1: which I can understand. I try to get clicks too.
• 7:34
  Speaker 3: Don't worry.
• 7:34
  Speaker 1: But I think defer, you know, you put deferment in
• 7:38
  Speaker 1: a defer deferment in a headline.
• 7:40
  Speaker 3: I'm sorry.
• 7:40
  Speaker 1: It's just like investor repellent. It's like, that's so boring
• 7:43
  Speaker 1: of a word anyway. Believe me, I know. Cause I
• 7:45
  Speaker 1: put institutional in the name of a book and like,
• 7:48
  Speaker 1: it was like spring reader repellent on the title. And
• 7:51
  Speaker 1: so deferment is sort of like that, but dodge is
• 7:53
  Speaker 1: like a little more like, ooh, what's going on here?
• 7:55
  Speaker 1: So I get it. But in the story, they say
• 7:57
  Speaker 1: it's deferment. And that's what the industry would push back on. However,
• 8:00
  Speaker 1: you could say, well, the government really should have that
• 8:03
  Speaker 1: money now. Then they can do other things with it.
• 8:06
  Speaker 1: Whereas you defer, you're starving the government of money and
• 8:10
  Speaker 1: you can actually invest it and make more money. So therefore,
• 8:13
  Speaker 1: I looked at the word dodge and it means to
• 8:15
  Speaker 1: avoid completely. So I just think definitionally defer is more accurate.
• 8:20
  Speaker 4: Thank you for that GRE lesson, Eric.
• 8:22
  Speaker 3: Okay, I'm curious how you're going to follow that since
• 8:25
  Speaker 3: that was a little bit of a wild card. What's
• 8:26
  Speaker 3: our actual wild card ETF for this episode? All right,
• 8:30
  Speaker 3: you ready for this one? Yeah.
• 8:31
  Speaker 1: I'm going to drop a new Wall Street acronym on you.
• 8:34
  Speaker 1: You know the MAG7?
• 8:35
  Speaker 3: Yes.
• 8:35
  Speaker 1: Get ready for mangoes, okay? The Yorkville America Mangoes Plus
• 8:40
  Speaker 1: Index ETF, ticker FRUT, F-R-U-T.
• 8:43
  Speaker 5: The ticker is the winner for me, although we've seen
• 8:45
  Speaker 5: a lot of filings about mangoes.
• 8:47
  Speaker 1: Yeah, yeah.
• 8:48
  Speaker 4: I don't think they invented Mango.
• 8:49
  Speaker 3: What does Mango mean again?
• 8:50
  Speaker 5: Mango stands for Meta, Anthropic, NVIDIA, Google slash Alphabet, OpenAI,
• 8:55
  Speaker 5: and SpaceX. And I think the noteworthy thing there is
• 8:58
  Speaker 5: that there are two companies there that are private.
• 9:00
  Speaker 4: So again, this is a story of.
• 9:01
  Speaker 3: But going public, we think.
• 9:03
  Speaker 4: Yes, we think. Our reporting says soon. But again, if
• 9:07
  Speaker 4: this just.
• 9:08
  Speaker 5: talks to us about putting private assets in an ETF,
• 9:11
  Speaker 5: how that will work. Is it going to be in
• 9:13
  Speaker 5: an SPV or do they have a cap table exposure
• 9:16
  Speaker 5: and all that? But yes, mangoes is a new thing.
• 9:20
  Speaker 5: I was trying to make an index of it to
• 9:21
  Speaker 5: compare it with MAG7. And I was like, oh my gosh,
• 9:23
  Speaker 5: you're so silly. Again, two companies are so private.
• 9:26
  Speaker 1: Yeah, and it does hold, there was a leveraged mangoes
• 9:28
  Speaker 1: that came out, but it doesn't hold those two privates.
• 9:31
  Speaker 1: And so they actually lower cased.
• 9:34
  Speaker 4: No, stop.
• 9:35
  Speaker 1: Really?
• 9:36
  Speaker 3: Yeah.
• 9:36
  Speaker 4: This is too much.
• 9:37
  Speaker 1: Yeah, this is too much. Anyway, this one is legit, though,
• 9:40
  Speaker 1: because now it does hold the OpenAI and Anthropic through
• 9:42
  Speaker 1: special purpose vehicles. But it's pretty much all you can
• 9:45
  Speaker 1: do unless you have a connection. And this one actually,
• 9:48
  Speaker 1: the plus.
• 9:49
  Speaker 3: But those must be placeholders, too. Like, wait until they
• 9:51
  Speaker 3: go public and then.
• 9:52
  Speaker 1: It'll be replaced.
• 9:52
  Speaker 3: Absolutely.
• 9:53
  Speaker 5: And then when they go public, those two companies, then
• 9:55
  Speaker 5: what makes this special? It's just going to be like
• 9:58
  Speaker 5: any other.
• 9:58
  Speaker 1: Well, AI is not going away.
• 10:00
  Speaker 4: I guess so.
• 10:01
  Speaker 3: Yeah.
• 10:01
  Speaker 1: But anthropic, I mean, some of the debates around anthropic
• 10:04
  Speaker 1: and like how these AI is going to like destroy
• 10:07
  Speaker 1: the human race. This is heavy duty stuff. So I
• 10:10
  Speaker 1: think for an investor, like I know when I travel
• 10:11
  Speaker 1: around and talk to like regular investors, they really want
• 10:14
  Speaker 1: to get into AI. They think it's going to be big.
• 10:16
  Speaker 1: So even if it holds it after it goes public,
• 10:18
  Speaker 1: Maybe there's a downturn because there's like SpaceX, you know,
• 10:21
  Speaker 1: it goes public and then people sell it. Over time,
• 10:23
  Speaker 1: I just think like, is open AI and anthropic really
• 10:26
  Speaker 1: going to go away? I mean, this is a big trend.
• 10:29
  Speaker 1: They also have a plus on there and they own
• 10:31
  Speaker 1: what's called the Parabolic 7. What is that? This reminds
• 10:35
  Speaker 1: me of the Western movies of like the 50s, like
• 10:37
  Speaker 1: the Magnificent 7 and like the Hardcore 8, whatever.
• 10:40
  Speaker 3: Okay, anyway.
• 10:40
  Speaker 4: No one remembers.
• 10:41
  Speaker 1: The Parabolic 7. SanDisk, Marvel, Micron, Intel, Dell, AMD, and Broadcom.
• 10:45
  Speaker 3: Oh, so it's like the support network.
• 10:47
  Speaker 5: Yeah.
• 10:47
  Speaker 3: Yeah.
• 10:48
  Speaker 1: So, I mean, these are some hot, highfalutin stocks here, Joel. So, look,
• 10:52
  Speaker 1: I could see this maybe gaining attraction. Like, this is
• 10:55
  Speaker 1: the kind of ETF that could go on a run. Now,
• 10:58
  Speaker 1: whether it, like, takes over from the Mag7 and Mangos becomes, like,
• 11:01
  Speaker 1: a household word, I don't know. I have not heard
• 11:03
  Speaker 1: it outside of these ETF filings. Like, no one's running
• 11:05
  Speaker 1: around saying, like, Mangos this, Mango that. Whereas Mag 7
• 11:08
  Speaker 1: is definitely in like the vernacular.
• 11:10
  Speaker 3: It's still early.
• 11:11
  Speaker 1: It's still early.
• 11:11
  Speaker 5: Yeah.
• 11:12
  Speaker 1: But anyway.
• 11:12
  Speaker 3: People are talking about mangoes though. Yeah. A thing I
• 11:16
  Speaker 3: did not know. There are hundreds of species of mangoes.
• 11:18
  Speaker 3: Did you know that?
• 11:18
  Speaker 4: Of course. And the Philippines has the best mangoes.
• 11:21
  Speaker 1: So it makes sense. The metaphor.
• 11:23
  Speaker 3: I think India is going to dispute that.
• 11:25
  Speaker 5: My husband actually who is Indian. This is the biggest
• 11:28
  Speaker 5: debate in our home.
• 11:29
  Speaker 3: He says his are better. Of course. No, no.
• 11:31
  Speaker 1: How about the other debate? We have the cleaning people
• 11:33
  Speaker 1: come sometimes. And then because we always talk about. My
• 11:37
  Speaker 1: wife is insane the day before they come. She like
• 11:41
  Speaker 1: cleans the whole house. And if I have anything lying around,
• 11:44
  Speaker 1: she's like, clean it up. And I'm like, well, what's
• 11:47
  Speaker 1: the point of having the people come then?
• 11:48
  Speaker 3: This is called the pre-clean. Yeah.
• 11:50
  Speaker 1: Of course.
• 11:50
  Speaker 5: You always have to clean before the kind cleaning lady comes.
• 11:53
  Speaker 4: So the kind cleaning lady doesn't think you're messy.
• 11:56
  Speaker 1: That's the thing. It's about the image that she's portraying.
• 11:59
  Speaker 1: And I'm like, oh my God. The day before the
• 12:02
  Speaker 1: cleaners come is always like.
• 12:03
  Speaker 3: It's not the day. It's the five minutes.
• 12:05
  Speaker 4: Wait, do you do that?
• 12:07
  Speaker 1: My wife's way prior planning.
• 12:08
  Speaker 3: I shove everything in a closet or the laundry hamper
• 12:11
  Speaker 3: and I'm like, take it as it is. But it's
• 12:14
  Speaker 3: a thing.
• 12:14
  Speaker 4: No, we clean because we don't want to.
• 12:16
  Speaker 1: We don't clean.
• 12:16
  Speaker 3: We just like sort.
• 12:18
  Speaker 5: We don't want the cleaners to think that this client
• 12:20
  Speaker 5: is the messiest.
• 12:21
  Speaker 4: We want to be the best.
• 12:23
  Speaker 1: I know. It's a very.
• 12:24
  Speaker 4: I'm with your wife on this one, Eric.
• 12:26
  Speaker 1: Yeah.
• 12:26
  Speaker 3: So how many Mango ETFs are we going to see?
• 12:28
  Speaker 1: So I think we have a couple on the market.
• 12:30
  Speaker 1: I think we're going to see probably like six or seven.
• 12:32
  Speaker 1: And then we'll see if they take off. If they do,
• 12:34
  Speaker 1: we'll see way more. But I know Corgi.
• 12:38
  Speaker 3: Of course, they have one.
• 12:39
  Speaker 1: They have everything. Corgi has one.
• 12:41
  Speaker 3: Only one?
• 12:42
  Speaker 1: Yeah.
• 12:42
  Speaker 3: We'll see.
• 12:43
  Speaker 1: There might be two. They probably have a leverage too.
• 12:45
  Speaker 1: I can't remember, but I know they have one at
• 12:46
  Speaker 1: least straight up one. But the Yorkville one I'm tracking
• 12:50
  Speaker 1: because it does have the privates in there.
• 12:52
  Speaker 3: And what was the ticker? Fruit. F-R-U-T.
• 12:55
  Speaker 1: Good ticker.
• 12:56
  Speaker 4: It starts with 50 basis points, right?
• 12:58
  Speaker 1: 50 bips. Not bad. I mean, it's reasonable for a
• 13:00
  Speaker 1: hot saucy type product.
• 13:02
  Speaker 3: All right. Final category. Love this one in general. Good
• 13:06
  Speaker 3: luck with that. Who's our winner? All right.
• 13:09
  Speaker 1: Good luck with that this week. Before I get to
• 13:11
  Speaker 1: my real pick, there's one that just caught my attention.
• 13:14
  Speaker 1: I just got to go over it. The Aura AI
• 13:16
  Speaker 1: Photonics ETF, P-H-O-X. It's tough. It's tough to be that
• 13:20
  Speaker 1: small trying to come in on something where you're like
• 13:22
  Speaker 1: the sixth or seventh photonics. But I do like the
• 13:26
  Speaker 1: name Aura.
• 13:26
  Speaker 3: Why?
• 13:27
  Speaker 1: Well, because my 15-year-old Loves using that word all the time.
• 13:32
  Speaker 1: I apparently have negative aura, but that's a whole nother story.
• 13:35
  Speaker 4: Your wife will also say that the day the cleaner comes.
• 13:38
  Speaker 1: He went to camp two years ago and him and
• 13:39
  Speaker 1: his friend were like, this one counselor has like aura
• 13:42
  Speaker 1: to give. He was like, so cool. This guy was
• 13:44
  Speaker 1: so cool. He's like, he has aura to give. Anyway,
• 13:46
  Speaker 1: aura is like the new word. Do you have permanently negative.
• 13:47
  Speaker 4: Aura or day to day you have different auras?
• 13:50
  Speaker 3: No. To his kid, it's permanent.
• 13:52
  Speaker 1: Yeah. For my kid, it's negative permanent aura. Anyway, I
• 13:56
  Speaker 1: like the name. It's kind of like speaks to Gen Z. Yeah.
• 13:59
  Speaker 1: But it's really tough. And the ticker is P-H-O-X. That
• 14:04
  Speaker 1: wasn't even my real pick, Joel. The real pick, yeah.
• 14:06
  Speaker 1: I just wanted to talk Aura for a minute. I'm
• 14:10
  Speaker 1: obsessed with these words that my kid uses. Aura is
• 14:13
  Speaker 1: probably a top fiver.
• 14:15
  Speaker 3: But OK, what was the real one?
• 14:16
  Speaker 1: Yeah. The real one is the Hedgeye Hedged Bitcoin ETF HBIT.
• 14:20
  Speaker 1: The reason I picked this one is because it's, again,
• 14:24
  Speaker 1: very late in the Bitcoin launching, number one. Number two, hedged. Bitcoin,
• 14:29
  Speaker 1: I think, is a hot sauce. And I think that
• 14:32
  Speaker 1: when you have a portfolio, most people who use ETFs
• 14:35
  Speaker 1: are going to have just a little Bitcoin. They don't
• 14:37
  Speaker 1: want to hedge. They don't want any part of that.
• 14:40
  Speaker 1: They want to experience the pure melt-up. Bitcoin went up
• 14:43
  Speaker 1: like 25% or something in like a couple weeks. When
• 14:47
  Speaker 1: it moves, it moves quick. And so a lot of
• 14:50
  Speaker 1: the buffers and the hedging ones just don't take off anyway.
• 14:52
  Speaker 1: And if you're late, it's definitely not It's going to
• 14:55
  Speaker 1: be tough.
• 14:56
  Speaker 3: There was a moment, though, where hedge currency ETFs were
• 15:00
  Speaker 3: a thing. Is there something to read into this because
• 15:03
  Speaker 3: of that?
• 15:03
  Speaker 1: No, I don't think so. Because when Bitcoin went down
• 15:07
  Speaker 1: after that run up, it went down like 1.3% since
• 15:10
  Speaker 1: this launched. And this one, I think it saved you
• 15:12
  Speaker 1: 30 bps. It just wasn't a lot of buffer. And
• 15:15
  Speaker 1: so I think the idea here is instead of being
• 15:17
  Speaker 1: like a permanent buffer where we're always hedged, we're going
• 15:20
  Speaker 1: to actually have dynamic hedge. So we can actually look
• 15:23
  Speaker 1: at market signals. HedgeEyes, you know, definitely looks at signals
• 15:27
  Speaker 1: and they have a couple of the products I think
• 15:28
  Speaker 1: are more appropriate for signals. I just think when it
• 15:31
  Speaker 1: comes to Bitcoin, people don't- You want it all. You
• 15:34
  Speaker 1: want it pure.
• 15:34
  Speaker 3: Yeah.
• 15:35
  Speaker 1: And I think it's, and again, it's a little late
• 15:39
  Speaker 1: and Bitcoin's already really got its face ripped off. Like
• 15:42
  Speaker 1: maybe if this was launched before the face ripper, but
• 15:45
  Speaker 1: now I think people are like, if they're going to
• 15:46
  Speaker 1: buy it, they're like, they want the upswing now. They
• 15:49
  Speaker 1: don't want to hedge.
• 15:49
  Speaker 3: So Maybe. We'll see.
• 15:51
  Speaker 1: I'll eat my words if this thing gets asset. But
• 15:53
  Speaker 1: if I had to bet, this thing won't be around.
• 15:55
  Speaker 3: In two years.
• 15:56
  Speaker 5: Why do you think they are holding Bitcoin ETPs, ETFs,
• 16:00
  Speaker 5: rather than just Bitcoin directly? That's like Joel said, meta, earlier.
• 16:05
  Speaker 3: Yeah.
• 16:05
  Speaker 1: Well, for a lot of hedge fund type places, and
• 16:10
  Speaker 1: if you're not really wanting to take on a lot
• 16:14
  Speaker 1: of exposure, the ETF is just easier. I mean, I bet,
• 16:17
  Speaker 1: to be honest with you, even a professional investor who
• 16:20
  Speaker 1: goes to like a Bitcoin exchange, you'd get a better
• 16:23
  Speaker 1: price just trading iBit at a one or two basis
• 16:26
  Speaker 1: point spread. You do have to pay the management fee
• 16:29
  Speaker 1: per year, but that's only like 20 something basis points.
• 16:32
  Speaker 1: It's honestly a better deal than going direct.
• 16:34
  Speaker 5: This ETF, I think the expense ratio is 70 BIPs.
• 16:37
  Speaker 5: I just don't know. I feel like people who invest
• 16:39
  Speaker 5: in Bitcoin want it for the volatility and now you
• 16:41
  Speaker 5: want more in Bitcoin.
• 16:42
  Speaker 1: Yeah, I think it's the bigger. I don't think people
• 16:44
  Speaker 1: would judge this one for owning iBit. I think Because
• 16:48
  Speaker 1: they're not reselling iBit. They're not saying, yeah, that would
• 16:50
  Speaker 1: be weird. But they're just like, look, we're going to
• 16:52
  Speaker 1: use iBit. And they probably use iBit options to hedge
• 16:55
  Speaker 1: when they want to. And those are very liquid and
• 16:58
  Speaker 1: cheap markets. I think that's a smart move, honestly, versus
• 17:01
  Speaker 1: using Bitcoin directly. I just think this is one of
• 17:06
  Speaker 1: those categories that I just don't ever see any of
• 17:09
  Speaker 1: these hedging products really doing much. The only one I
• 17:14
  Speaker 1: could see maybe taking off is the JEPI one, like
• 17:19
  Speaker 1: where you take Bitcoin and you go way out of
• 17:22
  Speaker 1: the money. So you do get like, I would say 80%
• 17:25
  Speaker 1: of Bitcoin's upside. You give a little bit and you
• 17:28
  Speaker 1: sell that to get some income. So that company Goldman
• 17:31
  Speaker 1: bought Neos, they have a Bitcoin premium income ETF. And
• 17:34
  Speaker 1: so if you're looking for income and you're like a boomer,
• 17:36
  Speaker 1: you can use Bitcoin's volatility to get more income. That's
• 17:39
  Speaker 1: a different situation. I think those can be mildly successful.
• 17:43
  Speaker 1: And I've seen these hedge ETFs that are dynamic. It
• 17:45
  Speaker 1: is so hard to time the market over and over.
• 17:48
  Speaker 1: You might get it once, but they're very difficult. So
• 17:50
  Speaker 1: equity hedge ETFs haven't sold really that well either.
• 17:53
  Speaker 4: So good luck with that.
• 17:55
  Speaker 3: Yeah. Isabel, thanks for joining us on Trillions.
• 17:57
  Speaker 4: Always a pleasure.
• 18:04
  Speaker 3: Thanks for listening to Trillions. Until next time, you can
• 18:07
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• 18:12
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• 18:14
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• 18:16
  Speaker 3: produced by Magnus Sindriksen and Keshav Pandya. Amy Keene is
• 18:21
  Speaker 3: our executive producer. Cheryl Brumley is the head of Bloomberg Podcast. Bye.