Animal Spirits Podcast - Talk Your Book: Diversify Your Diversifiers

Episode Date: April 24, 2023

On today's show, we are joined by Paul Kim, CEO and Co-Founder of Simplify ETFs to discuss how rising yields affect alternative strategies, Simplify's interest rate hedge strategy, utilizing VIX strategies, and much more!   Find complete shownotes on our blogs... Ben Carlson’s A Wealth of Common Sense Michael Batnick’s The Irrelevant Investor Like us on Facebook And feel free to shoot us an email at [e-mail] with any feedback, questions, recommendations, or ideas for future topics of conversation. ​​ (Wealthcast Media, an affiliate of Ritholtz Wealth Management, received compensation from the sponsor of this advertisement. Inclusion of such advertisements does not constitute or imply endorsement, sponsorship or recommendation thereof, or any affiliation therewith, by the Content Creator or by Ritholtz Wealth Management or any of its employees. Investments in securities involve the risk of loss. Any mention of a particular security and related performance data is not a recommendation to buy or sell that security. The information provided on this website (including any information that may be accessed through this website) is not directed at any investor or category of investors and is provided solely as general information.) Learn more about your ad choices. Visit megaphone.fm/adchoices

Today's Animal Spirits Talker book is brought you by Simplify ETFs. Go to simplify.us to learn more about their various ETF strategies. Welcome to Animal Spirits, a show about markets, life, and investing. Join Michael Batnik and Ben Carlson as they talk about what they're reading, writing, and watching. Michael Battenick and Ben Carlson work for Ritt Holt's wealth management. All opinions expressed by Michael and Ben or any podcast guests are solely their own opinions and do not reflect the opinion of Ritt Holt's wealth management. This podcast is for informational purposes only and should not be relied upon for investment decisions. Clients of Rittholds wealth management may maintain positions in the securities discussed in this podcast. Welcome to Animal Spirits with Michael and Ben. We had Paul Kim from Simplify on to talk about alternative strategies. This was wide-ranging, broad scope of topics that we discussed. Basically, everything but the 60-40 portfolio. Simplify was a product of the pandemic. Paul Kim started this company. company, I think it was 2020, right in the teeth of the pandemic. And when we first talked to them, they only had a handful of strategies. And now they have a lot more strategies. And it's

interesting because now these strategies kind of cover high inflation, low inflation, rising rates, falling rates. It's all these different things. So one of the things we're talking to about was they had a strategy that just knocked it out of the park last year. It was up almost 100% because it hedged interest rate risk. And then my question to him was, well, what's the other side of this if you think rates aren't going to go up anymore? And he said, they had two strategies that can kind of take advantage of that, too. And I think that's interesting that these ETFs now, especially using some options and maybe some leverage, that if you have a view of the world, there's going to be a strategy to take advantage of that. Investors certainly didn't

have that in the past, where they could say, I want an ETF for a mutual fund that's going to allow me to take advantage of interest rates rising. You would have said, I don't know, just shorten your duration. There was no implicit strategy for that in the past. So a lot of their strategies, I think, we're limited to hedge funds back in the day. Yes. And now advisors have the ability to implement them alongside like their core type stuff. And Simplify does a great job making these strategies, which are fairly complex.

Certainly, forget about it for the average investor, even for the average advisor. This is not necessarily stuff that is in their wheelhouse. So they make it very approachable. They work with you on analytics. If you're not sure where this could fit alongside some of the more passive stuff, they make it accessible. So I think you're going to really enjoy this conversation with Paul Kim from Simplify. Welcome to Animal Spirits with Michael and Ben.

We're joined today by Paul Kim. Paul is a returning champion. He is the co-founder and CEO of Simplify Ascent Management. Paul, thank you for joining us again. Thanks for having me. It's a pleasure. I think this is number four now or something like that. We're excited to have you back.

First of all, I should start the show by saying congrats and all your success. I'm looking at the website. And as a 414, according to this thing that you've got up there, you're over $1.3 billion in assets, which is super impressive considering that you're, what, three years old? A little less than three, yeah, almost three years old. Amazing. Credit to you guys. So that's a good transition to where we're going. I saw a tweet threat from Eric Balchunis last week about the flows into Vanguard. It was basically saying that Vanguard was more or less the only buyer of U.S. equities. Eric's words, not mine. But you guys are refreshingly not Vanguard. So with that as a

backdrop. Who is simplified for people that might not have heard your story before? Hey, I'd love Vanguard's Flows. Who are we? We're basically a new-ish ETF shop, less than three years. Our niche is what we hope to be a very big category one day. We're really focused on the alternatives part of the market, particularly things like diversification, ETFs, or things like income. We think there's a big unmet demand for that. If you, You think about all of the sort of long-term strategies and hedge funds and other institutional strategies, I think that's the next frontier for ETFs, and we want to be the party that brings it to the ETF market.

You mentioned that a big part of what you do is focusing on income and alternatives. Has the thinking at all on income products change now that there actually is some income elsewhere in the treasury space? I just had lunch with someone, actually, and he said he works for a company that does high-yield strategies, and he said he couldn't believe he's at a conference where all anyone want to talk about with T-Bills. Does the change in yield change any the way that you look at this space, or do you look at that as well, it's some competition, but those aren't going to last forever? Well, probably last decade, we've had sort of the T-Bills. There's no alternatives to

equities. It made sense to maximize your equity allocation almost. Now, all of a sudden, treasuries and even things like T-bills are giving you a nice fat yield, that's a massive opportunity. why it takes people out of their sort of complacent equity mindset and now they're looking at other things and that money in motion, whether it's going into money market funds, T bills, credit, it just creates a lot of opportunity and sort of a mindset of looking outside of the equity market. So your biggest fund by assets is the interest rate hedge ETF. It's tickers PFX. By the way, we're going to get into this later. You've got some great tickers. CTA. I can't even believe that was available. I was just thinking about that, too. That one's pretty good for managed futures.

That's the managed futures one. You've got a Bitcoin one. The ticker is maxi, which is funny. We'll get to that later. But all right, the simplify interest rate hedge ETF. There's a quarter billion dollars here, which is quite a lot of money. Did you see what the performance was last year, Michael? Go ahead. It was up like 90 some percent, right, Paul? Yeah, it was a pretty big winner. And the basic idea is how do you hedge interest rate risk? And we launched at a time when rates were very low. May 21, credit to you guys. It was awesome. Great timing. And it's an example of what we try to do in the market, which is provide access to something. In this case, it's a very, very deep liquid part of the rates market, things like payer swapsions. And big institutions or treasury

departments of large corporations use these to hedge out their interest rates banks. And that market is essentially inaccessible unless you have ISDAs in place. These are big agreements with banks, very, very hard to get, almost impossible to get as an individual or an advisor. And so packaging some of these very cost-effective, very efficient interest rate derivatives into an ETF and bringing them to market and then helping people hedge out interest rate risk. I mean, that was the basic thesis behind the ETF, it worked really well. I wish it were even bigger. I think it could have helped a lot more portfolios, but again, it's an example of what we're trying to do. Is this almost like put options on interest rates or is the reason that it was up so much last year because

the rate move was so strong? Curious, how was this fund up so much? Are you trying to get the tails or was it just because rates moved so much last year? Yes to both. I think this is a very concentrated portfolio of options, officially options on squash. But think of it as like you have a bunch of put options on 30-year treasuries. It's similar to that type of exposure. And anytime you have options on something, I mean, what drives option prices? It's two things. It's really, well, there's multiple things. But the two dominant things are level. So what interest rates are dominating right now? Are they going up or down? And then vol. And if you think about the vol of rates, there's a great index, the move index, which one of my colleagues, Harley Bassman, created. And that

index has gone up a lot because all of a sudden rates are moving a lot. So the value of these options benefited both from the rising level of interest rates as well as rising ratefall. But then anytime you're buying an option, the timing of it and the carrying cost of options is such a massive factor. And so the genius behind this Harley Bassman found a part of the market where ratefall was relatively cheap. It was relatively neutral carrying. So you have a way to sort of buy these super long-dated options, carry them well, and they're positioned to do well when rates go up or when Val goes up. I'm not asking you for a specific recommendation, but let's say you nailed the rate timing and you hedged rates last year. And now you come into this year and you say,

well, I think we're going to recession and rates are going to fall now. What's the product and simplify that can take advantage of that? So we have two. One is TUA, TUA, like the quarterback. And that's basically 5x the two-year treasury future. So it's a very concentrated front of the curve position. My former employer, Pimco used to do similar trades in your dollar or treasuries. And it's basically the classic recession trade in fixed income where you buy a bunch of front maturity bonds. And when eventually the Fed starts to ease, rates drop. And that part of the curve is the biggest beneficiary. So that's one way to position performance. fullier for that. The other is TYA, which is, hey, I just want a lot of duration. That's about

3x the 10-year treasury future. Again, that's a massive amount of duration, but instead of getting it in like one part of the curve like TLT, you're getting it in the belly. The belly tends to react faster than sort of just the long end to a recession or to slow down. So either of those things work. It'd be almost the reverse of what P-fix is. So if you had inside information into the Fed, if you had a direct line to what your own pal was going to do, you'd want to get long either TWA or what was the other one? Or TIA. But TUA, the best time to put on this type of position is on or right after the last rate hike. So we're probably in the right zip code already. And it's seen a lot of good flows given that it's a brand new ETF.

Paul, you can't control fund flows. I'm sure you wish that a quarter billion dollars went into P-fix before it was up 90% and not after. So I guess with that said, who are your investors? I mean, are these advisor-led flows? Are these super-sophisticated DIYers? I mean, this is complex stuff. So I know you might not know exactly, but where do you think your flows are coming from? I think the dominant share of our flows are RAs, so advisors, independent advisors who have views on the market, who have an investment process. And not every investment advisor out there is going to have a view on a yield curve or a Fed policy. But there are plenty of people who do or who just want to diversify out of certain risks. If you're worried about

duration risk, you didn't want to have to completely revamp your portfolio. You add a five or 10 percent allocation to something like PFIX and you've had an awesome experience last year. I would say that, but then we're increasingly starting to see much larger asset managers who still want the sort of convenience of an ETF. And maybe they don't want to set up the ISDA. Maybe they don't want to set up collateral management to manage features, and they want to outsource that. And so we're starting to talk to a lot of those much larger prospects as well. Michael mentioned that you got the CTA ticker for managed futures, which was nicely done. That's a strategy that out of a lot of other strategies that struggled last year,

that strategy had a pretty good year, relatively speaking, and depending on how you manage it, that depends on how it did. But there's a lot of different ways to run that type of strategy. Some people run managed futures, and they use a million different things. is that every type of commodity you can think of, they use rates, they use fixed income, these equities, they use commodities. How do you go about doing it? Because, again, there's certain areas that you could pick to focus on or let go up and

I'm just curious how you do that. Well, I think first, before you even get to the specific manager, which we love the manager that we're partnering up with here, but I think the asset class or the strategy itself is one of the most effective ways to hedge 6040 portfolio and most implementations of managed futures at significant diversification benefits. Our version was designed specifically for that, and so it has a negative correlation to the 6040. Sort of a 10 or 20 percent allocation would meaningfully improve the risk adjuster returns.

It would have obviously helped and has helped portfolios in periods like last year. But when do managed futures do best? They do best in trending markets up or down. They do best in environments where inflation is going up. or where commodities benefit or where you have a market volatility. They're kind of a tail risk hedging in that they could go short exposures when most other funds and strategies are mostly long. It's a great first alternative to implement into a lot of portfolios, I think.

It's like a gateway alternative. Exactly. And it's a very easy one where, again, adding a modest allocation, meaningfully changes the portfolio risk. When we found somebody, or really it's Michael Green's friends, they were long-term CTA, they have their own private funds, and they were people from like the Goldman Metals Desk. So there's a lot of experience there, and it's all quantitative. And at minimum, they're going to track the broad CTA market.

But specifically, we took out things like equities and focused just on commodities and rates because we wanted to be a diversified to 6040. I don't have the numbers on this. I could be completely out of line here. I would guess that dollar weighted returns in managed futures have not been good because even though they might be a wonderful diversifier, I think investors have a tendency, certainly myself included, to have the inability to focus on the pie and really focus on the pieces. And when you've got a position, if you've got a strategy that can't survive a bull market and equities, man, that's

really, really, really difficult to stick with over the long term. Even if it can be a wonderful diversifier. So I think in this case, unlike tail risk strategies or things where your expected returns are negative here, I think the benchmark itself, the Sochgen CTA benchmark, for example, has had a positive return. And so you're getting diversification, i.e. a negative correlation to the 6040 for our strategy, flatish, probably for many others. But you're getting a positive expected return. So even if you just think of it as almost like a cash allocation that gets a little bit of extra carry long term, that's okay. It adds ballast, but it doesn't necessarily pull out a lot of drag. Is this an options-based strategy, too, like most of those stuff you do?

Nope. This one's a pure future strategy, and it invests across very liquid commodities and a couple of rates markets, and it's, again, been designed, ground up to be a diversifier. Okay, that sounds like a very naive question by me because it's not called a managed option strategy, is it? It's managed futures. Is it long short? It can go long and short. And I think that's, again, one of the features of a managed futures is that you can go short exposure. So when commodities sell off, managed futures will do better generally than a long-only commodity

basket. So I think where you see commodities and portfolios, it's been like GLD or like long gold, long oil and things like that or one of those long-only baskets. And that's been a very mixed bag. It's probably net zero, probably maybe even negative, but something like a managed future as an alternative to just being long-only commodities. We think it's a pretty good value proposition. I'm sure a lot of what you all do at Simplify is educating advisors and giving them the

education so that they can educate their investors. I would imagine that you work with a lot of model portfolio providers because what you do is so sophisticated that I'm sure that there are advisors that come to you and say, Paul, I love your products, but I don't necessarily know how to build a portfolio using them, mixing them with Vanguard or whatever. So if an advisor comes to you and says, help me with my model portfolio, what do you do with that person? Help them with their model portfolio.

So we have our own proprietary systems, multi-asset modeling software that can look across mutual funds, ETFs, or single stocks. And we could show and demonstrate allocations to alternatives, whether it's our own or someone else's and model things out, backtests things for them on request. I just basically provide a platform for them to evaluate portfolio level risk. I mean, I think we had to build that. One for ourselves, for our own product development,

which is where it started. But then secondly, that's been a massive and important thing to have, to have these sort of conversations because, yeah, the number one question on all is sizing. Even if I believe managed futures or some of our other ETFs who are interesting, how the heck do I use it? What's the appropriate size? And I think that back and forth and modeling of portfolios is one very important.

And then they need to be able to communicate that to their clients. And it really informs people what to expect. And delivering what people expect is, I think, the number one rule for any asset management firm. I'm just curious how you set expected return boundaries or expected risk boundaries. for these types of strategies, when obviously no one knows exactly what the returns are going to be in the financial markets, even if you're using stocks and bonds. But how do you help set expectations in terms of giving advisors a range of expected returns based on different scenarios?

It's rarely giving like forward expected returns. It's mostly back tests where they look at what would it have done in 2008? What would it have done in 2020? 2020 is like an awesome example for a lot of portfolios. What does it do? What would a portfolio? What would a portfolio? do when rates and equities are going in the wrong direction together. So it's more of that, I think. And then on the perspective side, it's more you can model out things like volatility, which tends to be fairly persistent over long periods. So it's not about forward-looking returns. It's really about forward-looking risks and correlations and eyeballing different parts of the market. And we all tend to sort of think that way. I think that's a classic. Anytime you see

historical returns, people zoom in on a couple of periods that they remember from their own investing. Paul, I love your take on this. You have a Taylorist strategy. The ticker is C-Y-A, which is pretty good. Great ticker. The great ticker. So there's a lot of debate amongst quant nerds, and I mean that not pejoratively at all, about this sort of strategy. Ben and I were just talking about the 3,600% return or whatever it was last week. That was in the news. Here's my uninformed take. I love the idea of a tail risk strategy. This idea that you can bleed, I'm making it up 3 to 5% a year, but you can get a 50% gain or whatever the number is when the VIX spikes, you sell, you rebalance, and kumbaya. However, I think that scenario that

just described as very attractive to everyone. Who wouldn't want that sort of protection? And so that leads to this weird dynamic where maybe the option strategy or the structure or whatever the heck is difficult to actually implement and really make money. Can you set the record straight or correct anything that I said that was not accurate? It's totally accurate. You're essentially trying to buy insurance and you're hoping that cost of insurance is lower than the realized gains down the road. You said it better. Yeah, historically it's worked out, but positioning matters a lot. And in a weird way, the option market has, even though it's much smaller than the broader equity market or a fixed income market, it feels like any given day, the tail is wagging the dog. So what does that mean? It means anytime people are buying a ton of insurance, it actually impacts the market and it's less likely to fall at that period. You almost want to buy this insurance when vols are low, when insurance, is not being chased when everyone's complacent.

So it feels like a pretty good time period right now. The VIX is like 17. Yeah, everyone makes fun of you for buying tail risk strategies or buying puts. But that's the kind of environment you need where all the sort of people who were hedging got burned and they learned not to hedge. That's when markets are positioned to potentially have some falls. For advisors, isn't the answer, Michael and I talked about this. The answer is really rebalancing.

If you have something like this that works and you see it work in the environment that you want it to work in, then you have to be willing to take some chips off the table and not get married to it. And then when it's not working, you also have to lean into the pain. I think that's the hard part for advisors is to take some profits from something that's doing well and then lean into the pain when things aren't going so well. But that's exactly what these strategies are for because obviously no environment lasts forever. It's a type of strategy that has a negative correlation to equity. So even if the expected return weren't negative, it would still be useful from a portfolio context.

But it only works if somebody can rebalance and is using that gain to plow back and rebalance into the market. But there's different ways to hedge in this market. The buying the put or being long vol has been a lousy trade the past couple of years and frankly longer. Outside of like March 2020, it just hasn't worked very well. What has worked, selling calls, covered call strategies, has been. work really well, being in cash, having sort of the optionality of buying things later, and sidestepping the cost of insurance has worked, managed futures last year works. We have another strategy, CDX, that takes a long basket of quality names and shorts,

a basket of junk names, and that does well when financial conditions tighten and it gets harder to finance stuff. And quality minus junk, as it's called, is another thing that works. So there's all these different tools. It's very complicated for the average advisor to think about, but building some of these exposures as a way to diversify your diversifiers, there's an opportunity for that. And we want to be sort of in that conversation. And I think some of the most innovative RAs out there that some of you are friends with as well are thinking about things like that.

And we want to be part of that push to add diversification into portfolios. I love the idea of diversifying your diversifiers and just looking through your lineup. And you've got, for people that are interested, go to simplify.us slash ETFs. There's a really, really clean user interface where you could search through all of the ETFs here. You really do have something for every environment it looks like. But the challenges as an investor is not piling into something that you wish you owned last quarter. Exactly. Or trying to predict which of these exposures will work. So it's the mindset. Diversity is still the only free lunch in all of finance and diversifying your diversifiers is a good concept, but it's hard to implement

for average people or average advisors certainly as well. And is it worth the effort? Perhaps a very basic third cheap 6040 type portfolio has worked amazingly for the last four decades. But every now and then you see a 2022 and all of a sudden inflation is kind of out there again and all these sort of risks are out there, doesn't make sense to carve out 5, 10, 20% of a portfolio and add to more absolute return strategies or diversification strategies. I think the environment's set up for that. And 60, 40 type portfolios have gone decades without returns as well. So you've lost decades. So having a little bit of alts, I think, is a decent way to sort of think about portfolios. I think one of the last times we talked to you, you had the volatility premium

Sval come out. And I think it was just getting started. Maybe you could just to give us an update on that one. Remind us and the listeners how that thing works and how you're extracting some income from the VIX. So what is the VIX? The VIX is basically average sort of option premium and 30-day options on the SMP 500. So think of it as both calls and puts. You're selling a bunch of options across all strikes. And that premium is what the VIX is measuring. One, there tends to be a price for insurance. So the premium for these options tend to be higher than what really happens to the markets to realize. The implied premium and options is higher than realized about 80, 90 percent of time. So selling insurance is profitable

80, 90 plus percent of time. Every now and then, a car gets in an accident or a house gets on fire, and the insurance company has to pay that premium back, pay on the policy. So S-FAL basically is, if you will, an insurance company selling insurance or an option, market maker selling options into the market. You're the house. Yeah, and you're collecting the premium over most periods, but every once and a while, VIX spikes and you see smoke, people panic, and that gets a mark-to-market loss, and it's a very volatile exposure to have during those times. But like insurance, you want to make sure you're sizing and you have the right balance sheet to underwrite that policy. So S-FAL, instead of

selling 100% VIX features, it sells somewhere in the 20 to 30%. So it's never fully invested in selling. So it's got a lot of cash. And then we also are very paranoid about selling options. So any option that we sell, we tend to sell in some sort of spread format. So in this case, we're selling VIX, but we're also buying call options on VIX. So VIX really spikes. We have the other side of that trade.

And so I think that's an example. Okay, what does that result for people? It results in probably one of the best equity income strategies out there. it's consistently delivered in the high teens distribution yield. It compares very favorably to all the sort of covered call type strategies out there. It has much lower beta and lower volatility than most of these strategies as well. So it's a very interesting way to get income. Again, in the high teens, have some equity alternative in that it has some beta to the equity market, but it's more defensive than many of the covered call strategies out there.

somebody that's listening who might say, hey, wait a minute, wasn't there like a VIX product that blew up? Wasn't there like an XIV type thing? Actually, who your partner was way ahead of that blowup, got it to Michael Green from making that call. So for people whose alarm bells might be tingling, could you just set the record straight? How is this completely different from that product? Sure. So XIV, when it blew up, it was basically 100% short, an exposure that's roughly 100% volatility. At some point, it was going to probably go to zero. and pretty much got there, if you're shorting something that can really spike instantly overnight and it did that. So what are we doing? That's different. Even though that trade is expected positive value, sizing matters a lot.

So if you can't withstand the mark-to-market hit, guess what? You're not going to be in that business long. And so sizing it to a quarter of the size of XIV is a massive benefit to write out some of these periods. And then again, what we did was we bought calls on the VIX, so we further protect ourselves from these spikes. And then that allows you to collect a very decent premium. You're not as high yielding at the best of times, but over a meaningful holding period, you actually out earned 100% inverse strategy. One of the reasons that hedge funds perform so poorly in the 2010s that I think a lot of

people outside of the investment world didn't really realize is that because cash yields were so low, a lot of times those type of hedging strategies you mentioned are sitting on cash. And if you're not earning anything in that cash, that actually hurts your return. That's one of the reasons that in the 80s and 90s hedge funds had this boost in their returns. So do you have any strategies like that because you're using options and you're using derivatives that a lot of your strategies are having some implicit leverage that you have cash to sit on that actually are helped by T bills? Does that work for your strategies at all? Yeah.

So as fall, for example, is mostly T bills or short duration fixed income. And again, if you're earning four, five, six percent potentially on these things, that's immediately helpful. Separately, we have dedicated strategies, Buck, which is kind of like an alternative to a low-duration fund or a stable NAV-type fund or high, which is an alternative to an high-yield ETF. And basically, both of those strategies sit in T-bills, collect the now very attractive yield, and then do a little bit of option selling. And our philosophy on what we sell in options, again, we only want to be.

spread, so we have a max loss on any position. And at least in the strategies of buck and high, we're selling a basket of options that are self-diversifying. What does that mean? We're not just selling SPX or NASDAQ options. We're going to sell ratefall alongside it and potentially sector ETFs and things so that the basket is designed to be a much lower risk sale than a single exposure. And it also allows us to go across asset classes and sectors and find, oh, man, fixed income vol is really expensive relative to history versus the SMP or NASDAQ, which is kind of low right now. So let's go sell a little bit more rate fall than we would on the equity side. And so we're harvesting that, but we're self-diversifying that basket.

We're making sure it's a spread so it never blows up in any one period. And we're selling very short maturity options that tend to bleed very quickly. What is that net result? High has had a distribution yield in the mid-9. with essentially very low duration and no credit risk, bucks given about a four or five percent yield and it has a very similar volatility to a very low duration fund. Paul, when we were talking about the VIX, I forgot to ask. There's been a lot of chatter about the VIX.

Is it broken? Does it still do what it's saying it does? And I know you all do a lot of work on like intermarket analysis, market structure type stuff. Could you talk about how people are using the VIX, maybe if they're trading shorter dated VIX type stuff and the rise of zero date to expiration options. What's going on there? What's the story? The high-level story is the implied vol, the VIX, which is based on the price of options, implied vols, trails and is dependent on realized falls. So the number one headline is

realize vals. What's actually happening, the underlying equity benchmarks aren't moving that much. I mean, they're choppy. They're going sideways. So if you just close your eyes, ignore all the headlines and all the scary research reports out there. The fact is, equity's really been pretty docile. That's the number one thing. And then number two, there's a lot of headlines and you see sharp intraday moves. The zero DTE options definitely help impact day to day. But on balance, it's probably lowered vols. A lot of these are a bunch of people selling puts on a day. So like it actually squishes falls down most of the time. So I don't think we've heard the end of what these things are going to do to the market. But on that, it creates a lot of headlines.

It creates what feels like sharp, and sure they moves. But over each day, it really hasn't done much other than generally lowering VAL. All right, Paul, where can we send people to learn more about your ETFs? W.W.Simplify.us. We'd love to take advisors to our analytics platforms and talk about some of these ideas. We'd want to sort of make the case to add alts and income into most portfolios and just love to hear different problems that hopefully we could help solve. Before I let you go, I would love to be a fly on the wall to see you guys talking about different future strategies that you all are putting together. Sounds like it's a lot of fun. It is a lot of fun. It feels like back in the iPhone days, hey, there's an app for that.

There's an ETF for that. It's so fun right now in my seat where we have these big investor problems. We have a suddenly large toolkit post-derivist rule. Like, it's been. two years where all of a sudden, ETFs could embed a lot of interesting diversifiers and leverage, basically. And at the same time, I think the stigma around these sort of type of exposures has diminished and people are looking to hedge risks or take exposures on that they wouldn't have 10 years ago. So it's just this really awesome time to be in product development, awesome time to be facing 20,000 RAs and all have different views. And basically, provide tools for that crowd, and it's been just a fun couple of years working with our team.

Well, thanks again for coming on. We appreciate your time, and happy birthday. Thanks so much. Thanks for having me on. Okay, thanks to Paul. Remember, check out Simplified.us. To learn more about their products, send us an email, Animal SpiritsPy.com. Thank you.