ETF Edge - History suggests the biggest market drawdown is still to come 4/13/26

Episode Date: April 13, 2026

As the conflict in the Iran continues, it only adds to other major market hurdles to come in 2026. History would suggest the biggest market drop is still looming and, it’s worth remembering, many new high-flying funds are too young to have witnessed any major test at all.   Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.

The EETF Edge podcast is sponsored by InvescoQQQ. Let's rethink possibility. Investco Distributors, Inc. Welcome to ETF Edge, the podcast. If you're looking to learn the latest insights on all things, exchange traded funds, you're in the right place. Every week we're bringing you compelling interviews, thoughtful market analysis, and breaking down what it all means for investors.

I'm your host, Dominic Chu. Here is my conversation with Christian Magoon, CEO at Amplify ETS, alongside Jamie Harrison, the head of ETF Capital Markets Trading at MFS. I'll kick off the conversation, Christian, with you from a top-level perspective. We know that there has been a lot of volatility around the markets, yet markets have been relatively resilient compared to other shocks, geopolitical or otherwise. Has it been a surprise to you just how much the markets have held in there

despite a full-blown war going on in the Middle East? Yeah, Dom, I'm. I think if we would have had the headlines about everything happening with what's going on in the Middle East, even some of the credit concerns, or even the Fed now suddenly moving from rate cuts to potentially rising rates, I think we would have expected maybe a bare market here, but we haven't seen that. And I think some of the resilience and company earnings has been helpful. Also, maybe the view that this isn't a permanent conflict. And maybe some of the excess pricing that happened in oil actually benefits the U.S. from being a permanent conflict. a net exporter to other countries of oil as well as natural gas. So I think it's been a little bit different than when we would have thought.

With that being said, we still think there's a lot of risk on the horizon. What exactly, just to follow up there, what do you think investor psychology has been like? You mentioned this idea that maybe this is, I don't want to say fleeting, because I don't want to trivialize what's happening in the Middle East right now. But geopolitical risks have in the past been characterized and I hate using this word transient, right, that they come and then they go and markets kind of bounce back afterwards. From an investor psychology standpoint, has anything changed with regard to the mentality that investors have about, say, buying dips in this kind of environment?

I think there might have been a little seasoning of investors with Venezuela and the first Iran strike where there was a head fake kind of and it didn't turn out to be really a prolonged crisis. So perhaps investors maybe were a little subdued thinking that Iran would be this time around a little bit not as material, but certainly with what we've seen with oil prices now and the duration that you mentioned, we are seeing investors start to change their allocations in 2026. And certainly we've seen some new sectors rise in terms of leadership, whether that's energy or basic materials, kind of seizing the narrative away from some of the technology leaders of 2025. Now, Jamie, an interesting point about all of this relativity with regard to the market

action has been just how resilient it's been, not just from a price perspective, but also from a market structure perspective as well. We have seen a massive shock in terms of things like tariffs, in terms of the war being here over the course of the last month plus or so here. What exactly does it tell you about the way that market structure has evolved over just the last five years and maybe even since the great financial crisis to the point where even with big wartime shocks like this, we have not seen as many large dislocations in the market as we might have been accustomed to seeing maybe 5, 10, 15, 20 years ago. Yeah, well, certainly the ETF market has proven very resilient through this volatility that we've

seen this year. And, you know, ETFs have passed every stress test that's been thrown at them, from the pandemic sell-off to the tariff tantrum to now this geopolitical risk that we're seeing in the market today. I think it really speaks to the proliferation of the product set and a lot of the market participants that are active in the marketplace. So there's extremely, there's an extremely robust lineup of liquidity providers, authorized participants, banks providing liquidity on a daily basis. And it also speaks to the genius of ETF market structure, right? The arbitrage mechanism that exists in the primary market that incentivizes market makers to provide that liquidity to clients, very much robust. And it's been exciting to see it work efficiently. Now, we have seen a bit of

widening in international products and especially in emerging market products. And, you know, that's just a natural result of the underlying volatility that we're seeing in the market. It certainly doesn't mean anything's broken. It's just it's more expensive to trade in volatile periods and you're seeing that in those ETFs at this moment. Jamie, could I follow up with that point by asking you from a person who scrutinizes things like liquidity, transaction cost analysis, some of the market frictions that go into making an ETF or mutual fund market as kind of seamless as possible? Where have you seen just maybe over the course of the past five or six?

months or so, some of the biggest stresses in the marketplace. Are there certain specific types of asset classes? Are there certain specific types of maybe equities or fixed income or certain specific sectors in the market that have seen a little bit more relative dislocation and relative friction compared to other parts of the market from a structure perspective? Yeah, I think in general as a whole, the ETF marketplace has really taken this volatility in stride. But if we were going to have to pick out certain sectors, or certain asset classes that have had more friction. It would be in the international space and, again, the emerging market space.

You know, at the end of the day, the increased transaction costs, the increased risk premiums that market makers are going to put on ETFs, they're going to be a direct result of their costs increasing and acquiring the underlying positions in that primary market transaction that they do with issuers that helps create that liquidity for clients on the exchange. And the more of those costs go up, they're going to be translated into the product. Now, the beauty, as I said of ETFs is that ETF arbitrage mechanism. And again, as ETF's also getting scaled, more participants coming to that marketplace,

and also that helps contract spread. So in general, the ETF market has really been resilient. If you're going to look for friction, it's probably international emerging market space. But again, very manageable and really just reflective of the underlying volatility that we're seeing in the marketplace. You know, Christian, what's interesting about this whole situation right now as well is some of the places in the markets that have gotten some of the most attention because of what's been happening as, of late have been certain types of thematic investments, certain things that are trafficking towards hot spots in the market, right?

We know that oil and gas, energy stocks have been a huge focus since the war erupted because of rising oil and gas prices and some of the perceived beneficiaries of who those prices could actually kind of help out in the end. We've also seen some thematics with regard to other places in the market that have seen a lot more interest pick up. Can you take us through at Amplify, where exactly you are, seeing some of those maybe bigger bumps up in terms of investor demand. And just how is that playing out in your mind? Yeah. So one area is this hedged equity exposure that really, you know,

couples equity exposure with option income. And for example, the international market that Jamie just talked about, we have an international product IDVo that owns international dividend paying companies and then writes covered calls to kind of target around a 6% income rate. And that allows you to stay invested in international equities, but have this hedge against the market volatility and kind of mute that. On the sector side, we've seen a lot of interest in our energy and natural resources, ETF, NDIV, kind of a similar approach, investing in oil, gas, chemical companies, at the same time, having a target distribution rate of 10%. It's a five-star rated fund, and it's returned over 30% this year. So definitely one of the hotspots areas that we've tracked.

On the other side, we've seen certain sectors kind of pull back a little bit, like very timely right now is cybersecurity has been kind of a victim of some of the AI-related headlines. You know, is cybersecurity going to be disrupted like software? And we think that that dip is relatively good to buy in because we think in an AI-driven world, cybersecurity as well as M&A around cybersecurity is going to be a big deal. So we think that's still relevant, but that's pulled back from a dip standpoint. And certainly crypto has been kind of range bound here. You know, liquidity and legislation, the two L's kind of been working against crypto. We were long-term bulls in crypto with a variety of crypto-oriented products. But we think that has also kind of suffered from some of the liquidity being sucked out of the market due to what's going on with Iran.

Now, do you feel as though, Christian, do you feel as though some of those places are seeing a little bit more of that kind of significant by the dip demand? for them. I know that from your perspective, they could represent opportunities. But at what point, what do you think catalyzes or triggers people or investors, traders, to want to get more full bore into some of those parts of the market that have been depressed because of market volatility? Yeah, I think it's going to be a larger disconnect in some of those areas than, you know, the S&P. So I think it's maybe double digits. Once you're down over 10 percent in some of these subsectors, you start to see the contrary and start to say, well, maybe I'll take a look at this or long term, is this 10% due to something structural within the sector or the theme,

or is it really kind of driven due to macro issues like Iran or liquidity or with a direction of interest rate? So, you know, a lot of times some of our best performing themes are our least bought, and over the next 12 months, they do the best. And sometimes our worst performing themes are where it's really late in the game and people are piling on. And, you know, I think we've seen that even last year when you see institutional ownership of energy via Bank of America research was at multi-year lows.

Just so happens, energy ends up being the best performer in the first three months of the year. Likewise, you know, the AI trade was kind of in the top tier of ownership going into last year and this year has lagged quite a bit. So I think sometimes a reverse sentiment is actually a great thing and indicator for buying some of these unique opportunities. It's the old saying, right, buy when others are selling and sell when others are buying. That's right. Like that whole philosophy there.

Jamie, I'd like to bring back to you this conversation because many of the things that Christians spoke about right now are our asset classes that weren't really top of mind or even in existence with regard to ETF wrappers just five, 10, certainly 15, 20 years ago. Things like hedged equity, buffer type products, defined outcome type products. from an ETF platform's perspective, and somebody who focuses on capital markets and the trading activity around some of these funds, what exactly are you looking for with regard to how things have held up for some of these kind of newer type of asset classes within ETFs, some of the actively managed ones, some of the buffer ETFs, hedged equity ETFs. We have not seen a real period of market stress that has kind of dislocated those markets at all for some of those new types of ETS and actively managed products.

What exactly from your perspective is something that you'd be keeping a close eye out for to see that those stresses actually come to maybe lead to something a little bit more, I guess, negative down the line? Yeah, I think, you know, ETFs feed on liquidity and transparency. Those are key factors for our market makers. Those are key factors for our clients working to access, looking for products that are accessible. So, you know, when you start talking about complex,

The riddives when you start talking about less transparent markets, I think those would be something that you'd want to keep an eye on as volatility ramps up. Now, I'm sure, you know, Christian along with MFS and a lot of other issuers, have very robust capital marketing that through the product development stage, stress test portfolios to make sure that they'll act as intended. But yes, as innovation continues to increase at a rapid pace within the ETF wrapper, definitely something that we advise our clients be really front-footed about. It's important to do due diligence on the portfolio. Absolutely. It's also important to do due diligence on the issuer and the infrastructure they placed around their products and the subject matter experts and human capital they have managing these products because, you know, as these products continue to proliferate, think about last year,

over 800 products came to market, 72 new issuers. We're absolutely seeing some capacity reach within the industry itself. And market makers and liquidity providers don't have endless balance sheet. And you're going to have when there's times of increased markets, you may start seeing them be more selective about how they deploy that balance sheet. And having a firm that has deep partnerships, deep bench of subject matter experts that plays with the 18 in terms of the street and liquidity providers available, super important. And as you talk about some of these new products, yeah, definitely something to be well aware

of its complexity, lack of transparency could absolutely be an issue if we're going to start seeing some deep sell-offs. You know, Jamie, for some of these types of products, it's also about, you know, maybe the idea that we could see those have some issues down the line if market stress has come to fruition without getting too much into the weeds Jamie I know that we could if we really wanted to but without getting too much into the weeds what exactly do stress tests look like from say an MFS or any of the fund issuers perspective what exactly are the types of things that you are testing around and for what exactly do those scenario analyses look like what are the major factors you're trying to key in on

Yeah, from a high level, we're just, we're taking a portfolio situation where the market is having a large sell-off. What happens to our collateral constraints? What happens to the balance rate of our market makers? Do the underlying constituents continue to trade? Are there underlying liquidity freezes in the portfolio? Should we encounter, you know, at 10, a 15, at 20 percent draw down? And, you know, these are easily modeled out. But again, when you're talking about a new product set, maybe maybe less so in terms of being able to model that out.

But so from an MFS perspective, we've approached our ETF franchise from launching natural extensions of our current mutual fund capabilities. We want to meet our clients where they are. And so we're leveraging existing investment teams that have a proven track record through plenty of outs of volatility. So we've been very confident in our ability to provide that liquidity. Once you start talking about, again, some complex related strategies, you know, we've all seen the news and the headlines around potential private credit ETFs. That picture becomes much more murky. And again, I think it's up to advisors, to investors, to clients to really dig in and look under the hood and engage with their issuers to ask these tough questions. What does this look like in a 20% drawdown?

How does this liquidity facility work? Am I going to be able to get in? Am I going to be able to get out? And if I'm able to get out, am I able to get out at a price that's tight to nav? And what's the infrastructure at your shop in terms of managing that consideration for me? You know, Jamie, I'm watching because Christian has been sitting here nodding next to me like he wants to get on this. So let's throw it to you. what your thoughts are, Christian, hearing what Jamie just spoke about with regard to stresses.

Yeah, to me, I think there's two types of ETFs right now that raise some red flags or at least some increased examination in their underlying holdings. If your ETF owns private credit, I think it's worth taking a look at kind of what the standards are around liquidity and how that ETF is trading because that could be a bit of a mismatch between the trading pace of ETFs and the underlying asset. The second is ETS that own equity-linked notes, and those could potentially be in stress due to

redemptions and the underlying credit risk. That's another kind of unique derivative, and some of the largest ETS out there, Dom, you wouldn't think that are income-oriented, own equity-link notes versus maybe doing option income or dividend income. They're doing derivative

income in a true derivative sense. And these equity-link notes we've seen in the past have some significant problems. And I would very closely look at any ETF that has equity-linked notes should we get into a major drawdown or there be a contagion in private credit or something related to the banking system. All right, let's put on our forward-looking hats. I don't want to say crystal ball because I mean that implies certain things about an understanding

the future. But with as much clarity as you guys have on the ETF business right now, and I'll start with you Christian first on this, what is exactly do you think will be the biggest thing in terms of market development for ETF products that we should be looking out for in the same next six to nine months? Is there something in terms of specific areas in the market, asset classes where you could see way more activity building up as we head towards a midterm election cycle and the balance of the year? Yeah, I think there's going to be a continued drive towards equity strategies that have some type of protection, whether that's buffer or hedged equity. Remember, a midterm

election year historically has the largest drawdown of any year in the election cycle, about a 17% drawdown. So if we think it's bad right now, it could get a lot of worse. The good news is after that drawdown, it actually has the best 12-month forward return of about 31%. So, you know, hopefully investors stick in there and how could they stick in there with hedge equity, whether that's derivative income or buffered product or outcome ETFs. I also think a wild card because of this administration is their prediction markets. And we've seen a couple ETFs be filed to maybe just focus on presidential election results. But I think there's some other applications using prediction market data. We're hearing it's incorporated in a lot of

research outlooks now that may be able to provide some ETF ideas that aren't binary in terms of outcome. I want to leave it at that because I don't want to reveal too much secret sauce. All right. So speaking of that, Jamie, prediction markets and ETFs, there's something that's been talked about for a while now from a market structure and a capital market's perspective. just how important is it for you to stay on top of prediction markets vis-a-vis the ETFs? Yeah, so, you know, we've seen those filings come out. I think, you know, there's still a lot to be determined there in terms of how that

exposure is going to be obtained, whether it's going to be a swap contracts or potentially another mechanism. So, yeah, absolutely. Whether it's that product, I agree with Christian, there's certainly a lot of attention paid to, you know, these derivative products, these enhanced income products. But I think one thing I can tell you, you talk about looking at crystal ball. What I can tell you with confidence is that you're going to see a continued focus on active management in the ETF wrapper. You know, it's when we started, when I started in ETFs, these were, ETFs were seen as cheap, beta, passive products.

We've certainly evolved from that. Active managers are coming into the marketplace every day. 86% of products were active in 2025 and certainly were seeing that pace continue in 2026. So I think the benefits of the ETF wrapper, the transparency, the tradeability, the flexibility, all very much resonating with investors. and I think you'll continue to see a focus on active management. Now it's time to round out the conversation with some thoughtful analysis and perspective to help you better understand ETFs with our Markets 102 portion of the podcast. Jamie Harrison, head of ETF capital markets trading at MFS continues with us now.

You know, Jamie, thanks for sticking around for the podcast. I had mentioned before that I did not want to get too into the weeds with regard to some of the market structure elements we talked about during the online show. but because you were a guy who deals in the weeds, I would like to get a little bit more into them now for the podcast because market structure is something that a lot of folks don't pay that much attention to only in times of stress when they start to see massive dislocations because of market volatility.

I wonder from your perspective in your career thus far, just how much have you seen this idea of market structure and liquidity evolve over time? Yeah, well, I love the way you put that. Let's get in the weeds. I live in the weeds. Let's get our hands dirty here. So, you know, with respect to your question, we've come a long way. And, you know, I remember back when I started in ETS back in 2010,

when an advisor would go to put a trade on an ETF and they would get a hard block from their platform because it exceeded an ADV average daily volume threshold, call it 10%. And I would get the advisor on the phone and they'd be, why can I trade your ETF? Why is it saying it's illiquid? And that would ultimately result in me having to get on the phone with a different wealth platform and discuss and educate them on how these products work and the immense liquidity available for them well outside and exponential to a product's average daily volume. So we've come a long way, but I'll tell you this, that I still have plenty of conversations on a weekly basis with advisors who equate average daily volume, simply the amount of shares that in ETF trades per day with the ultimate underlying liquidity of the product. And that makes a lot of sense when you're talking about a common stock, but the beauty of ETFs is they're not beholden to the forces of supply and demand.

And the reason for that is because they're open-ended. Marketmakers who are providing liquidity to advisors and investors on the marketplace are able to create shares in response to demand, and they're able to redeem shares in response to selling activity. Because of that, they're able to provide immense liquidity well outside of the average daily on and happy to jump further into the weeds dom you tell us me where you want to go with this one all right so let's get a little bit further into it with regard to liquidity i remember there was a day you know back in my my fund management days you know i'm a former 40 guys as many of our

listeners and viewers know and back then you know that was one of the main components right you looked at adv if i was a if i if i had gotten an order from you know my pm or or cio with regard to the stuff they wanted to get into you start to look at things like average daily how big of a percent do you have to be of that ADV if you are you say you have a million shares to go of a certain stock right and this thing only trades you know 300,000 shares a day or 400,000 shares a day, how long is it take you to work in and out of positions? Those types of things always had to be modeled out in some way so that you could find the best kind of risk management around them. But maybe these days liquidity isn't just about ADV to your point, right? What exactly

then goes into how you characterize liquidity now if it's not just ADV. How exactly then do you gauge from a risk management perspective, just how, I guess, easily traded or without friction you could go through a transaction process if it's not just straight ADV. What else are you looking at? Yeah, sure thing. And I think that example makes perfect sense, right? If I'm an advisor and I'm looking to buy a million shares from ETF, and let's take your example a step further. instead of trading 300,000 shares a day, let's say the ETF trades 20,000 shares a day. Naturally, you're going to think if I need to buy a million shares at this product that only trades 20,000 shares a day, I'm going to have massive price impact or massive duration in order

to complete this trade. And what's important to realize here, and you talk about barometers and benchmarks to gauge liquidity of an ETF, let's take a step back and talk about that market structure. Let's get back in the weeds. So when a market maker is providing that liquidity to you, if I'm an advisor and I want to buy a million shares of one of our ETFs. here at MFS. The market maker is going to be able to supply that liquidity. It doesn't mean that the market maker needs a million shares of inventory in order to supply that liquidity. In order to get

those a million shares to sell to me, he or she simply needs to acquire the underlying positions in that ETF. And they're going to deliver those underlying positions to us here at MFS. And in response, we're going to give them those million shares of the ETF. So if you think about that, what's important in that equation, the underlying liquidity. And there's a there's a, there's a, called implied liquidity, which gauges the underlying liquidity of ETS and gives a much more accurate picture of the available liquidity in a product. So specific to here else at NFS, we launched our first products in 2024, relatively new ETSs. They're maturing every day. Average daily volume is increasing every day. But these products are still able to trade in numbers exponential

to their average daily volume because we hold highly liquid underlying securities. And this implied liquidity stat takes a look at those underlying securities. And basically what it does is it says, at what point will I breach 20% of underlying average daily volume of the underlying positions, not of the ETF itself? So how many shares of the ETF do I need to trade before I impact one of the underlying constituents by 20%? And that's the baseline for the implied liquidity statistic. And so just for example, you have a product that trades 30,000 shares a day. It may have a 25 million share implied liquidity, right? So we've done a lot of work getting this message out to our advisors.

We have pieces posted to our website. I encourage your listeners to take a look. But when considering an ETF, especially a newly launched ETF, we hate to see advisors distracted by irrelevant benchmarks like average daily volume. And the statistic is out there. It's published on Bloomberg. ETF capital market desks are more than happy to supply this to you. And indeed, we saw with our suite, we saw products that traded one, two weeks since launch

that had barely any average daily volume at all trade millions of shares. right near the offer, right near NAV, because that underlying liquidity was so robust that market makers were able to acquire those underlying positions and supply that subsequent liquidity to advisors when it came to the top-level ETF itself. How's that for the weeds, Tom? Oh, I love the weeds, because I'm going to maybe at the same time try to go slightly more into it, but then take us out of them as well with this question. My question to follow up on that conversation is who then has to do the work with regard to understanding the liquidity dynamic. You mentioned that you are fielding these phone calls, investment advisors are likely fielding

phone calls from their clients, who ultimately needs to really under, I mean, everybody should, right? Let's just say that out there. Knowledge is power. Everybody in the chain, right, this value chain probably benefits from understanding as much as they can about the product and the liquidity profiles. But at the end of the day, when it comes to ETF investing, how much does the end retail investor have to understand about the underlying liquidity profile of those holdings versus what the investment advisor has to know

about the underlying holdings and their liquidity profiles versus how much does the fund company offering those shares and the ETFs have to scrutinize the underlying liquidity and implied liquidity there? Does that make sense to you? Yeah, certainly. And I think, you know, each one of those market participants has a responsibility to know what they hold, right? From the retail, you know, customer who is the ultimate beneficial owner of the ETF, to the advisor who's putting that customer into the ETF to the capital markets team of the issuer from a product development stage, making sure that we're launching a product that makes sense. You know, we mentioned earlier on your show, ETFs feed on liquidity. They feed on transparency.

from a product development standpoint, making sure that you're launching a product that has both of those things is key, right? ETFs are a powerful vehicle. They're not the perfect vehicle for every solution. Certainly you're seeing us test the boundaries of that now as an industry. I think making sure that you look under the hood, that you check the DNA of your issue, we're making sure that they have the human capital, the teams there that interface with their investment professionals, making sure that they're optimizing the strategy for the ETF vehicle with liquidity for advisors in mind. Now, if I'm an advisor, I'm absolutely going to leverage the capital market team, leverage the issuer, get a bit more into the weeds than likely my customers are. But these are liquid products. They're transparent products as well, right? And so whatever part you serve, wherever you sit in that chain, you have the ability to do this analysis on your own. And, you know, a large cap U.S. domestic equity ETF, likely going to have more implied liquidity than a small cap emerging market ETF, right? So everybody has the ability to do this analysis.

analysis and look under the hood, I think the more you're able to connect with an issuer, to connect with that capital markets team, you know, typically these conversations aren't very long and they can center around trading best practices. They can center around portfolio construction. But, you know, they're not as complex as they may seem. And I really encourage your listeners to engage with, engage with issuers, look at some of the educational material that's on our website as well as many of our competitors' websites. It's all out there for them. and I think it's really important because, as you mentioned, some of the action that we've seen over the last six weeks, right,

this is when it matters. You know, everything trades pretty efficiently or likely trades efficiently in tranquil markets, but it's when, you know, the proverbial excrement hits the fan that you want to make sure that what you own is liquid and accessible. All right. One final question for you before we take you out of the weeds in this whole process, Jamie. If you take a look at, you mentioned just how many new issues have come to market

over the last couple of years, right? And the vast majority of them have been actively managed products as opposed to kind of index tracking beta type products. And many of those actively managed products that are being brought to market are relatively new and smaller in size on a relative basis to more established funds.

So, you know, just as an example, I see a newly issued ETF that has, you know, $50 or $60 million in assets under management, actively managed product. It looks like it's a product that I want to get into. I also look at there and I see kind of like those trading volumes and over the course of the last 30 days,

the average daily volume is 25,000 shares. You're saying that I should not be scared of a product like that from a liquidity perspective. Can you kind of elaborate a little bit more on that point before we let you go? Yeah, that's 100% correct. I would point you, don't look at the average daily volume of the ETF.

Look at what the ETF holds. And many times you'll see that the underlying positions, trade in numbers exponential of that average daily volume. And that's going to be your signal that you ultimately have a liquid product that you're evaluating. And we talk about ETF market structure. We talk about the arbitrage mechanism. But market makers are incentivized to provide you liquidity. They're going to charge you a premium to nav when you're buying.

They're going to charge you a discount to nav when they're selling. That's my team and my team's job to make sure that we're managing those premium discounts to the best of our ability. And we're making sure that those are as tight as possible to nav. But that premium discount represents their edge on a trade, right? Because when they create or redeem in the primary market with the issue where they're doing so at NAV. So they're capturing that spread between the offer and NAV or the bid and NAV for every share they trade with you. And they're all in competition to win these trades. So they're incentivized to provide the tightest pricing as possible.

And they're going to collect that spread between where they're trading with you and where the products underlying NAV is. and all they need to do in order to participate in that arbitrage is acquire the underlying position. So that's what's key. If the underlying positions are liquid and transparent, you likely have an ETF that's going to be liquid and accessible for clients. All right. It's a bigger conversation for sure. But we appreciate you taking the time, Jamie, to break it down for us. We appreciate it. Thank you so much. That does it for this ETF Edge podcast. Thanks for listening. Join us again next week or head over to etfedge.c.com. We'll see you then. Over the last few decades, technology has transformed our world in amazing ways.

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