Animal Spirits Podcast - Talk Your Book: The Most Ambitious ETFs

Episode Date: March 5, 2021

On today's Talk Your Book we chat with Simplify Asset Management CEO Paul Kim about creating ETFs that are concentrated, enhance the upside and protect the downside.   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. Learn more about your ad choices. Visit megaphone.fm/adchoices

Today's Animal Spirits Talk Your Book is brought to you by Simplify Asset Management. Go to simplify.us to check out their new suite of ETSFs. 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 Holtz 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 Ritthold's wealth management. This podcast is for informational purposes only and should not be relied upon for investment

decisions. Clients of Rithold's wealth management may maintain positions in the securities discussed in this podcast. On today's show, we brought back for the second time Paul Kim of Simplify Asset Management. We talked to Paul a few months ago. Still have a relatively new ETF firm. Said it was founded in March 2020. They already have $170, what is it, $180 million in assets. has grown very large in a short amount of time, and he has an interesting way of looking at the world where he's really pushing forward the whole role of ETS. And we talked to him after we got done taping about the fact that the actively managed mutual fund space, it seems like they've basically thrown up their hands and given up. And we're seeing so much innovation

in the ETF space. So we were talking about the structure of how does this even work inside of the ETF wrapper? And there's now an in-kind redemption process in the ETF wrapper with these options because I asked if it was a taxable event, and it sounds like it's not. So we've shared for weeks and months now the explosion and options activity. And obviously a lot of that is retail speculation on places like Robin Hood. But don't you think there's also just a broader adoption of this stuff? And some of that is going to stick around for a while. And a lot of that has been like a step-up basis where just there's going to be more options

used in a strategy like this where he's using options to try to enhance the upside and protect the downside. That's something that I wouldn't want to be doing on my own. And I would be glad to hand off to a professional who knows what they're doing on this stuff, because you have to actively manage this stuff. You can't just put it on autopilot. Here's the sale from an advisor. It's very straightforward.

We're going to give you access to the most disruptive companies in different themes, whether it be cybersecurity or fintech or whatever. We're going to protect the downside if we're wrong. And we're going to enhance the upside if we're right. That's an incredibly compelling story. Now, of course, they have to execute. But just from a, yes, that sounds good. in terms of the ability to tell that story and to raise money. I am super bullish on these things

gaining traction. Right. So the first time we talked to Paul, he talked about they have this S&P 500 and NASDAQ 100 ETF that effectively uses options to do that to enhance the upside. It's got longer term call options and then put options to buffer the downside a little. And obviously, you pay a little bit of those if they don't work, but that's insurance. Hopefully the moves are big enough in either direction and that it doesn't matter what you're paying because it's offset by one or the other. These new strategies that we're talking about today are way more creative, ambitious, they're going to be highly volatile, but also using options to, again, enhance the upside and protect the downside. It's really interesting how fast I think we've come in the adoption

curve of ETFs themselves that you can have products like this these days that allow people to do this. Again, if you tried to do this on your own as just a regular retail investor, you would blow yourself up, right? Pretty easily. Yeah, I would buy stock in Simplify. Actually, I'd buy options. And I'd sell options just in case I'm wrong. Yeah. Just the way that he looks at the world, very experimental, but it's also very thoughtful. And again, I just think the ETF industry as a whole when stuff like this comes out is pretty interesting. All right. So with no further to do, here is Paul Kim from Simplify Ascent Management. We're rejoined today by Paul Kim, CEO.

and co-founder of Simplify Asset Management Inc. Paul, thanks for coming back on. Thank you. Thanks for having me again. All right. So last time we spoke, we were talking about SPYC, the Simplify U.S. Equity Plus Convexity, ETF, which has had quite a bit of success in terms of, I guess, overall asset growth in an ETF world. It's up to almost, let's not round. Let's say $83 million. Yeah, it's been a great start. I think the value proposition we talked about made sense, give people the popular and time-tested beta in the S&P 500 and then add some seatbelts in the form of out-of-the-money puts. And in that fund's case, also add some potential sort of way to

enhance returns throughout the money calls. I mean, it's been a great time for being long volatility, voles picked up, and there's a lot of certainly attractiveness in getting direct hedges versus things like bonds, which are showing time and time again now that they're not really effective hedges for portfolios. So you also have a similar strategy. That one's for the SEP 500. You also have it for the NASDAQ 100. It seems like for a new generation of investors, investing in the NASDAQ 100 is almost the

new benchmark and growth stocks are what everyone is freaking out over these days. It's just been a growing groundswell of people. Michael and I talk about this, it's almost like it's replaced the value cult for a lot of people. The growth stocks are the new thing. They just want to be in for the long term. Totally agree with that. Totally agree. Even in replacing bonds, I think in some cases, people are viewing the large-cap equities as their bond portfolios, sort of the ballast in the portfolios, and they're trying to dip further out into the growth spectrum for returns. So it's a shifting of perception. A lot of it is, again, bonds aren't sort of playing the

roles and certainly not delivering the returns that investors need. And so it's sort of a, there's no alternative, right? The Tina approach. I was just ready to laugh. Actually, I did laugh at large tech becoming the new bonds. And of course, I think that's absurd. However, we were comparing, you know, everybody, we're comparing the yield on Apple at 2% versus the 10 year. I don't know what year that was when people are saying, which would you rather own Apple at 2% dividend yielded treasury bonds? And this is, what was it? I don't know, 2015, 16, 17, we were having these conversations. And which would you have rather owned? I mean, obviously, you know, it's rhetorical, but even still going forward. Yeah, totally. One has capped. The best you get back is par, and you certainly could lose as much as you can in investing in stocks, especially as rates go up and inflation goes up. And the other has, in theory, unlimited upside and has done a much better job in returning value for investors. So yeah, in hindsight for sure, but you fast forward 10 years from now, I'd say a lot of people would make the same bet.

What do you see as some of the biggest differences between now and the late 1990s period of growth? because there are certainly similarities where tech stocks seem to be like, that's all anyone wants. And you have this crazy retail speculative boom. Spacks are coming before where there's these new types of funding. People think this is a new world. It's hard not to see that stuff and go, wait a minute, are we doing this again? On the other hand, you have these much higher quality companies. So what do you see as some of the biggest similarities and differences between now and then? At the time, it seemed like it was much more of a narrow technological disruption. So yes, the internet matter, but the full ramification of that won't be felt.

for 20 years post that. So it's much more about newer contained technologies, whereas today's world, it feels like it's really a disruption of large established industries that's going on. And so when you're disrupting banks, insurance companies, car manufacturers, really big-ticket industries, that seems to be the difference in the sort of strength of these companies coming out, not with a couple 10, 20 million of financing, but billions and tens of billions of dollars of financing. So the ambition and the scope of these companies are so much bigger. And again, unlike a handful of companies that seem to have real lasting businesses in

that first and in that boom, these seem to be massive, game-changing businesses. Like, think of some of your Chinese companies like Alibaba or Tencent or any of those large companies or Amazon or Google. These are economy impacting life-changing. massively important businesses. And so the scale differences, I think, are interesting. Let's talk about the role of interest rates. Obviously, this is getting like all the hype these days. And this is complicated. It's impossible to separate the wheat from the chaff entirely and determine like, okay, this is how interest rate affects growth stocks. But like in other words, the person on Robin Hood or the person who is just speculating, they're not looking at,

oh, I'm buying Roku instead of the 10 year, right? Like, they're not making that calculation. Do you think there's something to the fact that because interest rates are low, investors were getting out on the risk spectrum, going to growth stocks, pushing up Apple Amazon, which by the way, has been fully supported by fundamentals. It's not like a mania. The fundamentals have actually exceeded it, continued to exceed expectations, but maybe it all started with low rates and then slowly over time it got to where we are today. Do you think there's a connection or am I just making that up? Well, there's definitely multiple connections, not just so much someone shifting out of AGG into an SMP 500 allocation, which then trickles into tech. I think that's a very small channel. I think the big channel is the big picture DCF view of companies. And when you need to fund these type of businesses that have payoffs 5, 10, 15 years down in the future, that discount rate matters a lot. And your cost of financing matters a lot. And so when you have low interest rates, but also related and just as important, just massive liquidity, so dollars that you could borrow at that interest rate, not just the price of money, but the amount of money, that's what's allowed a lot of these type of innovative companies to come to the market because you can find ample funding. A VC check isn't a couple million anymore like we just discussed. You get a multi-billion dollar check now as a startup, and that's a game

changer. I mean, people talk about this zombie company stuff. Obviously, for startups, it's a little harder to have that discussion because startups fail all the time. In the tech infrastructure, is it even possible for some of these companies to get propped up more because there's so much money sloshing around? Doesn't it give them a longer runway? Yes, it's not just high valuations, but high valuations when you could raise money at those high valuations has a reflexive nature to it. So it changes your reality. If you could borrow a billion dollars, figure out your business model over time, you have a higher probability of ending up as a legitimate business than if you had a very short runway. So lots of liquidity at cheap prices allows for management

teams to pivot and try different things. What ends the current environment? Is it a potential for rising interest rates? Is it a recession? What changes course here? I don't think interest rates are the primary symptom, I think they're an after effect of liquidity. So as long as central banks and the slosh of money all over the place is out there, that leads to both lower interest rates, much more and sort of larger startup opportunities, as well as the negative, the zombie companies, inequality. So primary driver is the balance sheet and the liquidity provided by banks to prop up the economy. The secondary fact, there are interest rates and the stuff we're seeing today in the markets. So we've been speaking about extreme moves in the market

to both the upside and the downside and how we think they're happening faster. So I mentioned to Michael the other day. When the go-go years blew up in the late 60s, there was a 36% correction, but it lasted for almost two years. We had one last year that lasted four weeks. It sounds like you're trying to help those tails in both directions to the downside and the upside. So how much of that downside and upside? How much are you trying to get? Is it on the margin? Obviously, it depends on the market environment probably, but how much of that, those tails are you trying to get when you're using these options? For us, it really depends on the strategy. So in the case of our beta tools with the S&P 500 or NASDAQ 100, they're really for advisors and their asset allocation portfolios.

So you don't want these massive amounts of options because if you go three or four years where these options don't pay off, that drag is way too much for an advisor trying to replace their current allocation in those vanilla sort of SMP or NASDAG exposures. So the sizing of those and those strategies are about 2% a year. So if you spend about 2% a year in option premium, one, it could still have a very massive impact. it could protect a large part of a 30, 40% sell-off. You might get more than half of that protected if you have that budget in place. And it could meaningfully add to the upside as well.

If you have a sort of a 30, 40% rally, it could potentially add 10 or 15% to your return. So that's sort of to us to write sizing of options in those strategies. But our latest batch of ETFs cover concentrated investments in technology names. And there it's much more focused. on the upside potential. So we have upwards of 10 or 15% in various options on some of these names in these portfolios. But we also still put on some downside hedges. So up to 2% of the portfolio is in puts on the NASDAQ. But that's interesting because it's a different mandate.

It's a different purpose of that portfolio. And options are just tools. And so you could have too much, too little, or you try to find the right way to size it. Do you think Kathy Wood blew the doors open in terms of giving more opportunities to people like you to step into the space and be creative and fun and active in the ETF wrapper? Totally. And it's not just her strong performance record, but it's the performance record as well as the flows that she's garnered. And it's only recent. Six to nine months ago, you had a lot more skeptics, but when someone or a company raises tens of billions of dollars, yeah, you get noticed and there's more of a balanced pros and

cons, debate about it. And so that's the least allowed advisors to use some of these type of strategies because returns are important for everybody. But credibility, the ability to put it inside of a portfolio with a very, very solid, credible reason is important. And so she's helped mainstream thematic ETFs for sure. She's mainstreamed concentrated investing for sure. I think she's pushing the envelope in modernizing growth investing. We're talking about your Volt line of products. And there's four of them. There's a robocard disruption, fintech, pop culture, which I love that name.

Then there's a cloud and cybersecurity one. These are very ambitious, as far as I've seen, in terms of ETFs. And so you have high concentrated bets. You also are using options for the upside and the downside. Some of these have just very few holdings in them. How did you come to create these products in terms of picking these certain companies. How did you create these products? Before we get into the anchor names, why these companies, I think there's a couple of reasons. First is Warren Buffett, when he talks about investing,

he says the vast majority of people should find the cheapest index exposure possible. He recommends S&P 500 index, fund their ETF, don't look at it, and it'll grow over time. And that's an amazing approach. And that's what a lot of our ETF industry and really asset management has relied on. massive diversification, increasing efficiency, tax efficiency. That's been great. But at the same time, when you look at Buffett's and Munger's investment style, it actually feels like the complete opposite. They have these massive concentrated portfolios. They own about 50% of their public equity positions in one company, it's an Apple. And there's a quote from Buffett that I found pretty interesting, quote, it's crazy to put money in your 20th choice rather than your first choice.

I operated mostly with five positions. If I were running $50, $200, $200 million, I would have 80% in five positions with 25% for the largest. So it's interesting because you have this, again, very accomplished investor. And there are others. Soros is famous for taking concentrated bets and positions when he really believes in something. Carl Eichen runs 90% of his portfolios is about a dozen names. It's because I think it's still rational. think of it this way. When you look at a big universe of stocks, of companies, a handful of companies in a Russell 3,000 universe, about 10% or less of those companies drive essentially all the upside. Two-thirds of that universe underperformed the benchmark by over 50%. So a lot of

losers, a lot of catastrophic losers, and then a handful, less than 10% are massive winners. If you have an investment style or approach or confidence in ability to identify or at least increasing your odds of picking that 10%, it actually makes sense to concentrate because the payoff in getting that right is so much higher than investing in a very diluted passive investment. But most people don't have that skill and that's sort of where you end up, which is why on these thematic ETFs, we're trying to figure out, is there a place in the universe? Is there a place in any industry where things tend to be very concentrated in their winner-take-all dynamics? Not ironically, I'd say the places you see that the most are in technology, communications, IT-type of industries, they tend to have winner-take-all tech-driven reasons why a Google comes out and wins a search business or why certain routers become the most effective and efficient ways. thematic ETFs that invest in technology are a natural place where you have winner-take-all dynamics,

and we're just applying a process and trying to find within tech industries which trends are developing, and not every trend has a handful of winners, i.e. regional plays, hospitals, you have geographic diversification, but some trends, especially in today's world, internet-based, e-commerce, tech-based, winner-take-all dynamics are there. And so we're just trying to find industries, and specifically a couple companies that have this characteristic. So you've got four different themes that you're playing on. And let's just pick, for example, the Simplify Volt Cloud and Cybersecurity Disruption ETF.

So you've got, currently I'm looking at 23% of this is in CrowdStrike, 20% of it is in Snowflake. How are you choosing these names? I mean, that is, you are going for it. Yep, we're swinging. And it's not us because I'm not a tech guy. I'm an ETF guy who loves tech investing. but I'm not a tech guy. So we've partnered up with a company called Volt Equity, and they are tech guys.

Their backgrounds are from the software engineering. They worked in the Silicon Valley world coding and things like that. And within this trend, we're really trying to identify a massive differentiator. And CrowdStrike stands out because in cybersecurity, most defense companies or cybersecurity defense companies think about, hey, how do we stay current when there's sort of the latest virus, add them to our list of problems and sort of update that over time. So you have sort of this running log of hacks that you're protecting against. In CrowdStrike, it's not like that at all. It's completely decentralized in the sense that they have all these

customers. And when one company or customer suffers a attack, that immediately gets centralized into CrowdStrike and all of that protection immediately goes out. So they're getting almost a real-time update. It has a natural network effect. Whoever gets the most number of customers and has cast the widest net of finding these sort of real-time problems, all of a sudden has a natural edge. That's an example. Snowflake, the database world has progressed from sort of a server-based world to a cloud base. It's funny. It's basically server-based like someone else is running the servers on site. And Snowflake is the true sort of first decentralized database provider that truly build their entire software and their architecture around the idea

that it's decentralized and completely cloud-based. And if you've worked for big companies, software generations are the biggest pain in the butts. If you have this old software, turning that software over to the next generation, massive project, massive headaches. And so a lot of old technologies, including these strong, big database systems, are built on old technology. And it's too hard to re-architect and bring all their customers over. So that's why you see sort of these chapters as the next technology takes over. And Snowflake is

that next technology. And Volt has strong confidence that they're going to drive a lot of that growth in that space because of technology edge. So those are two examples. For some of these holdings, you have some bigger names. Like in the Robocar one, it's Tesla. That's a huge name now. But other ones, your FinTech one, Square is the biggest holding in terms of individual companies. that's a bigger one, but then Lemonade is kind of a newer, smaller company. Why don't you explain to that? Maybe not as many people understand who they are and what they do. Lemonade's really interesting, and I actually worked for two former or current large insurance

companies, and that's a heavily regulated, very slow adapting industry and a lot of paperwork. So much of the cost of running an insurance business is the process of underwriting and then eventually claims and paying out the claims and making sure you don't have fraud. And there's just so many layers. And so that's sort of the cost of running that infrastructure takes such a massive cut of it. Lemonade is interesting because they basically are trying to avoid all that. And they're relying on AI and technology to say, you know what? What really matters?

Can we sort of get more data points real time and just take out all that layers of cost? but taking out the layers of costs also shrinks the time from underwriting to paying out claims that you could get an underwritten policy in three or four seconds. Like, that's crazy. Imagine a traditional insurance company being able to write a policy in a week. That's sort of like when time is money, running these processes and people is money, flip the model on the head and say, we're going to take the probabilistic approach By shutting down the cost and shrinking the time to paying out, we could actually, even with

the negatives of not having this massive infrastructure in place, still net a higher profit, run a light organization, and they're doing it well. And so they're addressing a very large market, and they're starting with rental insurance and pet insurance, but they're starting to go into life insurance now. And so you could see how that approach very quickly scales and could disrupt a lot of big profitable businesses. So, Paul, I'm looking at the pop culture disruption ETF and credit where credit is due. This is creative. I've never seen an ETF like this. So in order of holdings, we've got the cues at 28%, Snap at 21%, Spotify at 20%, then you've got Disney Activision at

4 and 5, Palaton at 4. You go further down and you've got puts and calls all over the place. I assume that this is very much actively managed these option strategies. Yes. Going back to sort of our conversation that in an index, the majority of companies are losers. So when you pick an index, you're sort of taking an average. In a trend, if you try to get every trend, every company inside of a trend, especially in a winner take all trend, by definition, you're getting a bunch of likely losers in the hopes that you get the winner and that winner outperforms enough to beat the drag.

Because we're concentrating, we're saying we're going to pick the winners and instead of filling it out with the second, third place and wannabes, we'd rather just get an index exposure for the rest and just try to catch general beta because I'd rather get the index than what we think are likely to underperform the index. That's why the cues are in there. And then the calls that you see are basically when we pick these winners and we only have one or two anchors per ETF. These are our 20, 25% bets. And for those positions,

we're trying to time when the payoff is most significant. So these type of disruptions and disruptive companies often go through a pattern of disruption called an S curve. And if you look at previous S curves, what is the S curve? It's sort of like this growth trajectory that a flat period where there's an adoption curve, And all of a sudden, it really significantly picks up. And then it flattens again as it matures and it's already penetrated.

So finding these type of companies that have the technology and are showing the early signs of this disruption, and then the re-rating of the company when it gets through that disruption follows a pattern. Tesla's done that twice already, first as an electric vehicle. Then it's a meme stop. Yeah, and multiple stuff. So like finding these type of companies and trying to structure the option so that they pay off in a similar time frame. Most of these S-curve, about two years. Most of the price appreciation, 150% to a couple hundred percent. So when you get patterns, you could see, okay, now if I think

this may be entering this pattern, how do I structure my calls to take advantage out of the money, go out about a year or two, and try to find enough exposure, is it efficient way of getting that upside? And if you see a pop in this underlying anchor name and you see it, get re-rated by the market, all of a sudden, these call options kick in. Not only the stock doubling or tripling in some cases, you get this convex payoff from getting that trend correctly. And that's what we're trying to do. What would happen if you're wrong on the timing in the good way, meaning you've got these snap calls out to 2023 for 105 bucks? That's a strike price. What happens if it goes from, I don't know where it is today, 60 or 70? Let's say it goes to

100 bucks in the next three weeks. Would you take the gigantic ostensibly gain in that cost? call option that's all the way out to 2023 and do anything with that? Yeah, we would restrike. We'd basically rebalance in a sense, sell out of those call options, buy more stock now that the fund has appreciated, and then take a similar option budget, restrike. But if you think you've re-rated all of that S-curve, that's also when you would revisit that anchor name. Is it time to switch in a different company? That's the sort of the active management part, but these aren't going to be these frequent once a month, once a quarter type moves. These are, did the S curve happen? Are we still in love with their technology and their

edge? And do we still feel there's a compelling reason this is in the intermediate time frame? As long as those are yeses, we'll stay in that position or Volt will stay in that position. And if it changes, we'll swap out a different name. How often do you guys look at those in terms of change? I know these are still relative new funds, but do you expect to hold these companies, hopefully for years? We look at it, once a year, every six months. How does that work? We look at them every day, but we would expect to not really switch them out more than once every, I don't know, once a year or maybe twice a year, max. Assuming that you have a good problem that these options hit, is that a taxable event for

investors if they don't sell the ETF? What's interesting is another reason why the option market continues to just grow. Believe it or not, you are now allowed to do single stock options redeemed in kind. So the same tax efficiencies you could get owning a stock in an ETF, you can structure an ETF to take advantage of those single stock tax deferrals. That's relatively new in about a year ago. Let's look at the other side. So in one of these disruptive technologies that works, a lot of times there are losers along the way or there's just huge drawdowns. All the big stocks that made it from the 1990s, Amazon, Microsoft, all of them went through huge drawdown. So let's assume, even if these are the long-term winners, there's going to be a

drawdown. How much are your put options going to help in a scenario where there is a big drawdown? I know you can't give specifics, but what's the general expectation? That's the flip side. Instead of concentrating on the way up where we're trying to time these S-curve moves and disruption, that's where your 50 to 75% and broader names helps because when everything sells off, you could then rebalance to some of these names. If the name itself sells off worse. Amazon and Apple, they've gone through 70, 80% type drawdowns like multiple times. Having a way to rebalance and add more to those names when they do, if it outpaced the market sell off, that's exactly why you want some ballast. Independent of the puts, just having

a chunk of the portfolio and other names means you're going to rebalance and add to get back up to that concentrated position. And then on top of that, we put in a couple percent of puts. And those puts, like we talked about just earlier, can do a lot of work. One or two percent position in puts can shave a half or more of a drawdown off in a significant sell-off. So if a 30-40 percent market sell-off were to happen, these puts can realistically be expected to shave almost half of that drawdown off. And what are you paying as an insurance premium on that when stocks are up?

What are you giving up, essentially, when you're having that insurance on? about a drag of one or two percent. But the cool thing about this portfolio is you almost don't even feel that one or two percent drag when the market's significantly going up because so much of it is in these high growth, higher beta stock positions and call options on the way up. It drowns out that insurance costs. But you'll definitely appreciate it if the market sells off steeply. The tagline that I pull from the side is identify the winners, enhance the upside, limit the downside. The full power of disruption plus convexity. Paul, if this works, you're going to be a very wealthy man. I hope so. More than that, like, I think it's just cool. It's like in an

innovation lab. I don't know if you guys are like foodies. I'm not a foodie per se, but like there was a wave of like restaurants. I'm a baldy. Nice where they deconstruct meals and put it into the essence of this or that. It kind of feels like we're doing that with investing where we're putting everything on the table and saying, what are people really trying to get here? Upside? What kind of upside? Asymmetric returns on the upside. Does concentration help? How can you structure to help? Where does diversification help? Where to puts play a role? Imagining thematic, concentrated growth investing, deconstructing it and then putting it back together in a way that's really interesting. I'm having a lot of fun. We're having a lot of fun doing it. You think that this trend persists of thematic investors being like the next star manager?

Well, you're seeing it in Arc. So Kathy Wood and her team for sure, I think it could get there because if you could pick winners, if you have a process or an investment team or research edge or something that allows you to pick winners, that creates a massive opportunity for a business. And that's really where the original star managers came. There were enough edges for some of these managers that they were able to generate outperformance for a long time. And that's something that, yes, if someone has that edge, yes, the star portfolio manager or team will come back, especially in thematics, which is so hyper-concentrated and where so many of these are winner-take-all environments. If you just have a slightly better chance of picking the winner because you're slightly better, you have this massive ability to sort of outperform, certainly broad beta, but certainly other thematics. And I think there's a massive demand for thematic investing. and it's a generational demand, and it's not going away, and it's just the way people are starting to invest. And you're seeing that, and I don't think that's a one-time trend. I don't think that's a short-term trend. I think that's a shift in investing. I completely agree with you on that. So, all right, we've got the Volt Robocard Disruption ETF, FinTech, pop culture, and cloud

and cybersecurity. We're going to link to all of this in the show notes. Paul, thank you so much for coming on today. Thanks, guys. It's fun having this chance to talk to you about this stuff. likewise. All right, Animal Spiritspot.com. Thank you for listening and we will see you next time.