ETF Edge - A 'FOMO' ETF; Thematic Investing Booms

Episode Date: March 15, 2021

CNBC's Bob Pisani spoke with Matthew Tuttle of Tuttle Tactical Management, Sylvia Jablonski, CIO of Defiance ETFs, and Harry Whitton, Head of ETF Sales Trading at Old Mission Capital. They discussed some of the hottest thematic investing trends in the ETF business, including SPACs and the hydrogen economy. Plus, a "fomo" fund is gearing up to launch later this year as more and more investors look to chase momentum in this market. In the 'markets 102' portion of the podcast, Bob continues the conversation about "fomo" with Matt Tuttle of Tuttle Tactical Management. Hosted by Simplecast, an AdsWizz company. See https://pcm.adswizz.com for information about our collection and use of personal data for advertising.

The ETF Edge Podcast is sponsored by InvescoQQQ, Supporting the Innovators Changing the World, Invesco Distributors, Inc. Welcome to ETF Edge, the podcast. If you're looking to learn the latest insights in all things, exchange, traded funds, you are in the right place, my friend, every week. We bring you interviews, market analysis, breaking down what it all means for investors. I'm your host, Bob Pisani. Today, we're diving into some of the hottest thematic investing trends in the ETF business, including smacks and the hydrogen economy. Plus, there really is an ETF for everything.

A new fear of missing out or FOMO Fund is gearing up to launch later this year as more and more investors look to chase the momentum in this market. Here's my conversation with Sylvia Jablonsky, CIO of Defiance ETFs. Harry Witten, head of ETF sales trading at Old Mission Capital. And Matt Tuttle, he's the CEO Tuttle Tactical Management and the man behind that new proposed FOMO ETF. Matt, everybody's trying to capture this crazy nature of the markets. I said it's like having a bowling alley installed in your brain being an active stock trader these days.

So you've got value stocks, you've got growth stocks, you've got the reopening trade, you've got tech stocks, you've got the Reddit play, you've got Bitcoin floating around out there. You have proposed a FOMO ETF that I think is very interesting that might be capturing the zeitgeist. not sure how it works, and that's why I want you to explain it to us. Now, we've had a momentum ETF, the M-T-U-M that rebalances twice a year. We've also got a buzz ETF. We had Jamie Wise on a couple weeks ago that rebalances monthly, that primarily looks at social media. Now you're proposing a FOMO-E-F that can buy anything, you say, that rebalances weekly. Explain to us how this is actually going to work. How are you going to decide what to own? So the first thing we're going to start with is the entire universe of whatever is currently hot. So, you know,

why we have that flexibility is I know what's hot today, but I don't know what's going to be hot three months from now next year. So right now, the portfolio would be able to choose. It would have SPACs. It would have, you know, innovative technology. It would have momentum stocks. It would have, you know, what's hot on social media. And that would be the universe of what we've, would start with, and from there we apply quantitative models. So we're applying a trend following model where what we want to do is we want to take the stocks that have been the hottest over the intermediate term, because typically what you see happen is what's been hot continues to be hot. Objects in motion tend to stay in motion, but then we want to combine that with a countertrent

following model. So with that, what we want to do is we want to take the stocks that have done the worst over the past couple of days. Because typically what happens is those stocks get oversold, and then eventually you see money start to flow back into those. So we're going to have both of those models running at the same time, and those two types of models tend to smooth things out quite a bit. And it seems like a very critical part of this is that counter trend piece. I don't know if you call it reversion to the mean, but that's how you capture, I'm guessing, the sudden rebounds, this dizzying change in pace where all of a sudden one day growth's hot,

next day value is hot, or tech's not hot, and transportation stocks are hot. By partly owning stocks that are unloved and that you're anticipating will bounce, you can capture the rebound a little more smoothly? Is that the idea? Yeah, and that's really huge. I mean, that's a big part of it. And we've seen that in the stock market recently. I mean, people will ask me, you know, hey Matt, what's the NASDAQ going to do today? So it's going to be up, all right? Well, why? Well, because it was down yesterday. It's really the markets move like that a lot. So, you know, trend following and momentum is great until it isn't.

And so, yeah, that counter-trend piece is vital to really be able to smooth out the returns. And when you say you can own anything, you mean anything. Could you own Bitcoin, for example? I mean, is that a possibility? It's not in the basket right now. We certainly have the flexibility. I need to wrap my head around how Bitcoin can't eventually one day go to zero. And if I can wrap my head around that, then Bitcoin is something.

that, yeah, we could be in. Certainly, we do have blockchain. You know, since I've been running the model in a personal account, we've had things like riot blockchain. I think we just got out of that today. But, you know, we can have, the blockchain companies, Bitcoin, I got to get sold on first. Okay. Harry, what I find very interesting about all this is the effort by the ETF community to sort of capture this crazy trading market that we've had. So I think that it's noteworthy. The momentum ETF rebounds is twice a year. The buzz ETF rebounds once a month.

And now Matt's proposing an ETF that rebounds is once a week. You see where this is going here. What do you think of these efforts to sort of capture the zeitgeist? Yeah, I mean, it's an interesting idea that Matt has. But his idea is definitely new. But there's a lot of funds out there that trade weekly. There's, you know, the active funds, as we all know, we've talked about ARC on this show many times. They can trade daily.

So it's not nothing new where somebody is going to go in and rebalance. And you talk about EMTAM. EMTUM is scheduled to rebalance twice a year. But if signals hit, they do trade in between their semi-annual rebalances if they have to. The quant numbers hit, they trade. So it just makes sense that ETFs are doing more and more rebalancing. Yeah, I mean, that's a very good point about M-T-U-M. They could have, I don't know what you call it, a special rebounds, but you're right.

They're not necessarily set to twice a year. But my point, Harry, is we seem, ETFs seem to be responding to the need to respond to the trading situation faster. Is this good or bad news, Harry, that we're chasing FOMO to begin with? We're even having this discussion rather than trying to figure out what's, you know, standard, you know, Vanguardian, you know, Jack Bogle kind of things, that essentially we're just talking about, you know, how fast can we move in and out of stuff, no matter what is popular? Is this a sign of the times, certainly, but is this good news or bad news we're doing, even having this discussion? Well, yeah, I know. That's hard to say, Bob. I mean, old mission as a market maker, we make

markets in every ETF. Somebody launches a fund, we're going to make a market in it. People are going to buy it. That's not our decision. We don't market the products. There's always stuff that open up every day that somebody looks at it and goes, I don't believe this is launching, and the next thing you know, it has a billion dollars in it. It's just people, if people want it, they'll buy it. I guess that's the easiest way to say it. Yeah. Matt, is there a minimum market cap in this? I ask because people have already asked me, well, you know, I have people email me saying, oh, I just want to know what's the next Reddit stock, you know, I don't really care because I, you know, I'm not interested in fundamental analysis. I just want to sort of get on the

zeitgeist here and figure out. But of course, those are possible to spot ahead of time, right? I mean, what do you say when people say, I really just want to get on the Reddit bandwagon, whatever, you know, I don't care what stock it is? Yeah. So, I mean, no minimum market cap, but obviously being active traders, we're going to be cognizant of that. And as far as, you know, the Reddit bandwagon, you know, our answer to that would be, you know, yeah, you can have some of that, but we're going to look at weighting things. For example, our waiting scheme weights things based on volatility. So, you know, the models had GameStop in there, not GameStop, AMC in there for a while,

but it's been a 0.6% position. So if it does go to zero, you might not even notice it. And so, yeah, so we're going to be in those types of stocks, but we're not going to be, you know, 10, 15, 20% and anything like that. Right. Now, this is not trading yet. This is in registration. When do you think this might become active? When would it might be able to trade? We're hoping mid to end of May. That would be our hope. Mid to end of May. Okay, great. Keep us abreast of what's going on. I think it's a great idea. I'm not sure about long term about how it'll work. I'm dying to see how you'll maneuver in and out of these many different asset classes. I would just move on and talk about clean tech, because that's a hot topic. We've got some. We've got some. Sylvia Jablonsky here.

Sylvia, clean tech was hot in 2020. The ETFs surrounded thematic tech, thematic clean energy, are hot again in 2021. You've got your hydrogen ETF. It just started trading HDRO last week. Just lay out the case for hydrogen. Why you've been very emphatic that hydrogen is overlooked. Hydrogen is going to be one of big clean energy plays for the 2020s. Give us the 30-second rundown on why you believe that's going to be the case.

Absolutely, and thanks for having me, Bob. So, you know, 90% of the world's energy consumption right now is provided by fossil fuels. And fossil fuels are, as we know, non-renewable, harmful to the environment, and contribute to global warming. So as natural reserves dwindle and the populations grow, there's this need to find a clean, sustainable energy solution that will meet our energy demands. And none of the existing alternative energy sources out there now, like solar, wind, or biomass are able to provide sufficient cost-effective energy supply. So enter hydrogen. So hydrogen right now is that about 200 million of investment, you know, it's Bank of America recently estimated that it could grow to 11 trillion of investments. So 2.5 trillion of direct revenues by 2050.

I think it's just a massive investment opportunity. and it's now a practical energy source, which could end up being 25% of our energy needs. What can run on hydrogen right now? I mean, golf carts. I mean, tell us what's feasible to run on hydrogen. Yeah, sure. So, you'd be surprised, actually.

There's a lot running on hydrogen. There are about 14,000 vehicles running on hydrogen through the use of fuel cells. You've got hydrogen powered forklifts and companies like NASA, Amazon, Home Depot, Boeing, Walmart, BMW, just to name a few, are using them, and sort of has they strive to become carbon neutral. There are buses running on fuel cell technologies, hydrogen energy basically there. You know, we're talking about the Olympics in Japan.

They're talking about having all of the buses run on fuel cells now. So, you know, just about anything and everything you can think of, on-site power generation, long-duration, energy storage, all of it actually exists, and it's just growing and growing as the technology becomes more sophisticated and it becomes cheaper to do it. And can hydrogen compete against, you know, electrification or solar, for example? How does that, how does the cost stack up right now? Yeah, so it's, so basically, you know, it's thought that the costs now will be 50% less within coming years. So, you know, it has, you know, to your point, It has been more expensive, but the costs are actually coming down as more and more companies

come out and sort of figure out how to produce it, how to store it, how to extract it. And, you know, it's really like it's sort of a simple process, right? It's electrolysis. It's a chemical process that's hydrogen from water using electricity. And after, you know, it's made, it can be stored. So once it's stored, it goes to a fuel cell for transfer of energy. The fuel cell separates protons and electrons. The electrons pass the circuit.

They make electricity. And the byproduct of all of this is more. water, which obviously is not, you know, a gas or carbon or some sort of pollutants. So the cost are essentially cutting down, and they're thought to be basically cut in half as years go forward. And the storage is also becoming more efficient. Right. So the glide path is kind of like solar. I mean, several years ago, it was considerably more expensive than, say, even natural gas.

And now it's come down so dramatically that it's actually, at least equal or cheaper than natural gas? You think hydrogen is going to have the same kind of glide path in terms of costs? Yeah, absolutely. And, you know, the difference is it's the most abundant element in the universe, really. So it can actually provide enough energy that we need as our population grows. So that's sort of the difference between solar. You know, solar and wind are just amazing alternative energy resources.

But hydrogen can really take scale and provide, you know, up to 25% of our energy needs in the future. So there is a huge difference there in terms of just like the investment, opportunity, and the impact of hydrogen. The one thing I've noticed is still a dearth of investable products. I mean, I just look at what you own here. And there's really three companies that are 30 percent of it. Plug power, fuel cell, and Ballard Power. If you had them up, they're like 30 percent of the whole thing. This seems to be the same problem we had, you know, years ago with certain things like solar, where it's, there's not a lot out there that's close to a pure play.

I know there are peripheral companies that get some elements from this. Is that going to change? I definitely think it's going to change. And one of the important things to think about is when we built this ETF, we also wanted to provide, you know, A, products that are, you know, have pure exposure to hydrogen and fuel cell. But B, that are liquid enough. You know, we don't want the investor to get nailed with products that perhaps, you know,

don't trade, don't have any market cap and are highly volatile. So, you know, you definitely have a smaller basket here. But as these companies grow and, you know, sort of like more companies come into the marketplace, the ETF could potentially expand. But if you look at just like the opportunity here with the recent value rotation over the past month or so, some of these means have been down 30, 40 percent. But like year to date, they're up over 50 percent, you know, fuel cell plug, for example, dollar power ITM.

I mean, some of these means are just like absolutely crushing it. And I think with the recent rotation, they've been great opportunities for investors to get exposure to the space. Yeah, plug power has been an absolute monster. I mean, that's just been a total darling of the clean energy crowd for more than a year. Yeah, no one knows what it is. You know, yeah, just to that point, I mean, no one knows what it is. Yeah, I mean, if you talk to people like, well, what do they do? Well, they use hydrogen to power forklifts for companies like NASA, Amazon, Home Depot, Boeing, Walmart.

Like, these are massive companies that are adopting plug power technology. So it's an actual thing that's being used in the world. Yeah, it's wonderful to see this finally take off. It's wonderful to see a chart of the energy output of a solar cell dramatically go up. It looks like this. And then the cost of that cell like that going dramatically down and competing against natural gas, for example. I mean, it really restores your faith in technology and the power to make things more efficient. The technology improves and the costs go down as the technology

gets better and also manufacturing costs go down because you get bigger scale. It's really, you know, a classic situation of a new technology disrupting an old business. And now you've got companies, you know, energy companies, oil companies talking about, we're not oil companies, We're energy companies now. And it's wonderful to see it's really now real and taken off. I think it's very exciting. I got you here. You run the 5G ETF also, that FIVG is the symbol there, Sylvia.

Where do we stand on the 5G rollout right now? We're all waiting for it. What's going on? So that's also something that's here in some form, but it's only getting started, right? So 5G is basically meant to support the next generation of connective technology. You know, it allows us to globally share information, which we're doing now. It allows us to digitally connect. You know, I would say where you probably saw it is when COVID hit.

And, you know, we were all working from home. And you saw that perhaps, you know, there were faster speeds and lower latencies than there were in prior years when you had to work from home. You know, chips and infrastructure core equipment like Nokia, companies like Verizon, you know, Wi-Fi, Internet. All of those things work to allow us to connect. But it's just in its infancy. You know, it's barely getting off the ground. The amount of investments continue to grow in court carriers, cellular antennas, new radio tech, you know, cloud capacity cell towers. And I think all of these things coming together will essentially allow us to have a true globally shared economy and will lead to continued growth in 5G.

It's the feature growth of communication. You know, if you look at the classic sector, you know, communication sector, it's basically Google, Facebook and stuff like that. I mean, this is really the future of what communication will be. Yeah, so not to be a pain, but when. So trying to explain five, I try to explain things like, can I explain it to my mother? And she says, Robert, what is 5G? I said, well, basically, everything's going to happen a lot faster. We'll be able to, you know, watch things on your, she has an Apple phone,

and she'll be able to, you know, download things a lot faster, and the connectivity will be better. Is that a fair way to describe 5G to your mother? I mean, what would you say? And when actually will we have it? Will we have it at the end of this year? Yeah, so, I mean, if you have the new iPhone, in theory, you already have it. So that's a great way to explain it to your mother. You know, the ultra-band, wide-band 5G rollout actually started in 2019, and right now it's

available in parts of 70 or... so 70 or so cities and eventually it's going to be, I think by the end of this year, it's supposed to be available in over 5,000 cities. But, you know, you have like, basically Verizon has fixed in mobile 5G all over America, AT&T, thousands of cities, you know, all around the world. So it is, it is there. You know, you obviously need the device that can use it, which in this case is the newest iPhone, but you explained it really well to your mother.

It just basically allows you to do things faster, more efficiently, share information quickly, watch videos, get text, you know, lower down times. And, you know, but the bigger part of that is it allows things like, you know, researchers in oncology to share information within a minute that might impact a study or a new drug or an outcome of a surgery. You know, that's where it really matters. You know, it matters obviously for driverless cars, for AI, for the build out of machine learning and things like that, but it's already practically used.

Yeah, I think it would matter an awful lot for driverless cars. I don't particularly want any glitches in the communications with my car. If there's a glitch when I'm downloading a movie, I can live with that. If we're driving 75 miles an hour on the freeway and there's a glitch in the communication system that's watching the car next to me, yeah, I have a little bit of a problem with that. So anything that will improve the technology around that, yeah, yeah, landing planes, too, folks, yeah, you want to keep an eye on that. Let me turn to Harry. Harry, thank you, Sylvia. That was a great upload of info. Thanks.

You watch an ETF trading activity on a regular basis. You're on a big trading desk there. We've talked about clean energy today. We've talked about the FOMO trade. What else sticks out to you for 2021. What's an interesting trends? Are you seeing unusual trading activity? Just give us a quick download of what you're seeing. Yeah, well, we're seeing a couple of things. Obviously, clean energy is still really active. And what's interesting is the marijuana ETFs are active, also very active. Both of those ended the year, very strong. And on any given day, when clean energy is up, marijuana's up, when marijuana's down, clean energy is down. It's kind of interesting how that happens. I don't know why, but it does. But inflows, we're seeing

Broad-based commodities get a lot inflows, symbols like PDBC, DBC, COMT. So people are looking at the reopening trade, they're saying, and there's a big use of broad-based commodities. So that's an area performing well, seeing inflows. Outflows, we're seeing outflows in gold and high yield, emerging market bonds as interest rates rise. All three of those are seeing outflows on pretty consistent basis. I know Morgan Stanley downgraded emerging markets a few weeks ago. So that's really kind of what we're seeing here. The thematic ETFs are also still very, very hot.

So Matt's FOMO product coming out and Sylvia's products like Hydro and 5G are really active. And you're seeing a lot of trading in those types of products, too. Yeah, I am very – the one of the things I love about ETFs is they're good at capturing what's hot. We used to make fun of it three or four years ago with the pot stocks because there was nothing to invest in. They were all in Canada. But, you know, it held on. We're still waiting for the Bitcoin thing to happen. But I love thematic investing because it reflects the way people think.

Nobody goes out and buys a consumer discretionary ETF. Well, you can, but you're a professional investor probably. But people like solar ETFs. People like clean energy ETFs. People like, oh, cybersecurity. Yeah, I want to be. buy that. People like social media, yeah, I want to buy that. People think thematically like this. And so ETFs follow the natural brain rhythms of an individual, you know, not I'm going to

buy the communication sector of the S&P 500. No, nobody does that. So that's why I find, you know, ETF so exciting. I mean, look at this. We've got a guy trying to do a formal ETF, which sounds ridiculous a year ago. And now it's like we're actually having a real discussion. about the whole thing. So I'm, there really is, except for Bitcoin. And soon, it sounds like that's going to be soon, though. Well, we at Wisdom Tree last week filed for another one. So now, how many we got, Harry?

There's got to be four of them, right, in registration? I think right now, four. At least. I think. Hundreds of them, I think, by now. Yeah. So I'm very excited about the whole, you know, prospects for 2021, particularly about the flexibility of the ETF, you know, wrapper. We haven't even gotten more obscure things like active-managed ETFs at all.

We see a lot of mutual funds, Harry, come and trying to essentially take the same management that they've got and active management and just put it into an ETF wrapper. We haven't even discussed that, but that's another sign. So I see the business is going nowhere but up. We'll hit $6 trillion fairly quickly. We went from $4 trillion under management for ETFs to five. I think we're nearing six right now. I don't see any reason why we couldn't hit seven fairly quickly.

Any final thoughts from anybody before we wrap up? I think with all the new launches and stuff, you're pretty much launching products that are going to cater to the next generation of investors, and that's huge. Nobody cares about the sort of old classic asset allocation products that is under the age of probably 30 now. And I think it's great that a lot of these products are coming out. I mean, you know, FOMO and Hydro are huge to that audience. Yeah, yep, completely agree.

We're all on the same page on that. So that's it for this week's ETFETs. Thank you for joining us. Great discussion with everybody. Thanks to Matt and Sylvia and Harry. Now it's time to round out the conversation with some thoughtful analysis and some perspective to help you better understand ETFs.

This is the Markets 102 portion of the podcast. Today we'll be continuing our conversation about fear of missing out or FOMO, with Matt Tuttle of Tuttle tactical management. And Matt, we had a great discussion about your proposed FOMO ETF, the fear of missing out ETF, which is in registration. You're going to own stocks, you're going to own SPACs, derivatives, just about anything that you can to make some money here.

What is amazing to me is that it rebalances weekly. But I'm most interested in sort of how you make the decision of what to own. I know it's a trend following and a counter trend. And I know you're running some models on your own already. Give me an example of how you decide what you're going to own in this particular fund and what a counter-trend strategy is. Sure. So first off, we start off with a number of different sleeves based on whatever happens to be hot right now.

So right now we've got a sleeve for SPACs. We've got a sleeve for stocks that are hot on social media. We have a sleeve for innovative technology. So then we take those sleeves and we run them through a trend following and a counter-trent-following model. The counter-trend-following model, basically what I'm looking at is for each sleeve, give me, depending on how much I want to weight that sleeve, so give me between 10 and 20 stocks that have been the worst performers over the past couple of days. And we may look at three days, we may look at four days. But that way, it gives me a group of stocks that have been oversold. And then the hope is that those stocks will then turn around and bounce, which is typically what we've seen, especially lately with these stocks, is they sell off and then they bounce right back.

And I'll tell you the problem I've got with this. I'm intrigued with the concept and the sheer energy that it takes to put something like this together. But, you know, this is essentially a market timing tool. And you must be aware, you're a student of the markets. There is an enormous amount of, shall we say, academic literature that indicates the market timing does not work. It's really pretty overwhelming. What's the secret sauce here? is do you believe that you can compress a decision-making

there's such a short period of time that you can basically know when to be in and out of various asset classes? So first off, I agree with you. Market timing doesn't work. You know, I've always said the Market Timing Hall of Fame will always be empty. There's, you know, that...

And so that's not what we're trying to do. What we're trying to do is be invested in the areas that are moving up, but be in the right sense. stocks in those areas, be in a mix of stocks in those areas, and in the right percentages. So one of the other things that we're doing is weighting them by volatility. So, you know, again, you know, AMC at a 0.6%. You were mentioning plug before.

We own plug. Plug is, I think, a half a percent. So the stocks are really volatile, you know, if they end up going down 30, 40 percent, it's not going to hurt us that badly. So we're not trying to time the market. We're just saying if you want to be positioned in the stocks and the areas that have been hot, we've got a smarter way to do that. I guess what you're trying to do is make a distinction between market timing and momentum investing.

And I'm not sure it's there. I don't want to be a nudge about it. But I think you're getting my point. I'd really like to see how you're going to pull this off because, number one, it's that you're dealing with a lot of different asset classes. You're not just moving between value stocks within. what's working in value and what's working in growth or switching between growth and value, you've taken on an enormous task with dealing with a lot of different asset classes, number one. Number two, I'm not sure the way you're describing it.

There's a lot of difference between the momentum investing style and market timing, because they involve market timing. So this is a very interesting experiment that you're engaged in, and I'm very eager to see how it goes. but I think you understand the weight of history really works kind of against you at this point. But I think it's wonderful that you're doing it. Could you ever see going to a one-day rebalance, for example? This is what I find interesting.

So the momentum, the M-T-U-M, is rebounds twice a year. Then you have buzz rebalancing once a month. You're rebalancing once a week. I mean, you could see the trend here, right? Isn't the... Aren't we moving toward a daily rebalance? And we would even consider going to intraday.

And we've studied that. Why I don't is markets intraday are just, they're too choppy, and you're just going to chop yourself to pieces. So we've looked at intradate. We've looked at daily, and we've looked at weekly. We've also looked at monthly. And what we found is weekly is really that sweet spot where you don't get chopped to bits, but you're still quick enough and responsive enough to be able to change on a dime. Yeah, that makes a lot of sense to me.

I could see a lot of real problems with a daily rebalance. The other thing I see is just the sheer trading costs. Now, you and I have talked about this before. You're not going to be tax-efficient, but this really could generate enormous amounts of taxable trades, couldn't it? Oh, yeah. I mean, again, we're not going to be tax-efficient. Some of the biggest mistakes I see people make with their investments

is they let the tax tail wag the dog. I mean, our goal is we want to do substantially better than the S&P 500. And if we can do that, I don't know that you're going to complain about the taxes. Yes. Although it always is, in actively managed mutual funds, it's always sometimes a little bit of an unpleasant shock because you don't know. And if that manager suddenly decides that, you know, they're going to be a lot more active than normal, all of a sudden at the end of the year, you get a little statement that says, what, how much? do we have here?

It's always a little bit of an unpleasant surprise. If we have a good year, don't be surprised, there will be capital gains. Yeah, yeah. Where do you see this all going? I mean, I know you can see what I'm getting at here on the philosophical side of things. We're now at the point where markets can, you know, artificial intelligences can almost figure out trading trends on its own. But the problem is that when everybody is doing the same thing, you know, the edge gets smaller and smaller.

You know, it's sort of like, you know, the old, you know, Renaissance thing where, you know, James Simon's figured out a way to exploit micro inefficiencies in different markets because he was one of the only people who had the computing power to figure it out back then. But as more people have got the computing power, the ability of them to outperform get smaller and smaller for everybody. Do you have any thoughts on that? I mean, eventually, my AI is going to compete with your AI, and my AI's computing power is not far from your AI's computing power. And if it just tell the AI, just get me in anything moving really fast. You know, what happens when all of us have the same AI? Well, right, and that's why you've got to be constantly innovating

and why we don't do index funds. Because if you're stuck in an index, yeah, I mean, that becomes obsolete. at some point, but you've got to be constantly innovating, constantly working on your models, looking at your models, and, you know, always looking at that next generation. So AI is something that we're looking at. And we've done tests on it, and I've seen some interesting results. I'm nowhere near ready to use it because I don't trust it yet, but something that we're going to continue to look at, definitely. Yeah, five years from now, my AI is going to be trading with your AI. And again, I go back to this old point. The returns kind of get narrower and narrower and the ability to exploit micro inefficiencies, shall we call them, in the markets, get smaller and smaller. 20 years ago, I remember sitting in Island's office and they were explaining to me their largest client was a company that all they did was essentially play off the S&P futures that were trading

on the trading floor itself in Chicago against the electronic version of the same thing. So I actually would call it Stadarbs, what you would call it. And I said to them, really, can you make money at that? And he said, yes, and he showed the example. And actually, the spread was surprisingly wide. Sure.

And so what happened was you can still do that, but it's a lot, lot smaller than it used to be, because so many people are in that business. The point is, what seemed like a miracle 20 years ago when I was first looking at it, and it was 1999, is fairly obvious today and done routinely. So I think that's probably going to be where the future is going to be for a lot of this. But it's fascinating, and I give you kudos for coming up with the idea and hitting the zeitgeist for the moment. Matt, thanks very much for joining with Matt Tuttles with Tuttal Tactical

Management. And that ETF, you think maybe May, did you say? We're hoping sometime in May, yes. All right, Matt Tuttle, thanks very much for joining us. Appreciate it. Everybody again, have a healthy, happy, and safe trading week. InvescoQQQQ believes new innovations create new opportunities. Here's the greater possibilities together. Learn more at investco.com slash QQ, Invesco Distributors, Inc.