ETF Edge - TMX Group CEO on ETF growth, Commodities and Crypto. Plus, Defining “Quality” with Astoria Advisors’ Founder 2/28/24

Episode Date: February 28, 2024

The CEO of the TMX Group – which owns the Toronto Stock Exchange – talks about his initiatives in developing new ETFs, adding transparency to commodities trading, pioneering crypto offerings and their tech venture incubator program. Plus, Astoria Advisors’ Founder helps nail down what is and isn’t “quality” in ETF space.  Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.

The ETF Edge podcast is sponsored by InvescoQQQQ, supporting the innovators changing the world. 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 are in the right place. Every week we're bringing you interviews and market analysis and breaking down what it all means for investors. I'm your host, Bob Pizzani. This week, we discussed the global growth of ETFs with John McKenzie. He's the CEO of TMX Group, which owns the Toronto Stock Exchange,

and just bought VETIFI. Plus navigating 2024 exclusively with ETS's thoughts from Astoria Advisors founder, John Dovey. John, thanks for joining us. You have been a leader in the ETF space. There's more than 900 ETFs listed on the Toronto Stock Exchange. You recently acquired ETF education site VETify. They run that big ETF Exchange conference in Miami Beach that I go to every year. You go to as well.

Tell us about this. What does TMX and the Toronto Stock Exchange get? with this VETIF acquisition. Why ETFs right now? Well, thank you for starting with that, Bob. And thanks for having us for this today. I mean, you said it's almost right in the question up front. We see the ETF, the Exchange Trader Fund, is essentially one of the most important innovations in retail investing in the marketplace history, at least in the last 20, 30 years. And Toronto Stock Exchange was actually the original pioneer of the ETF more than 30 years ago. And so as you mentioned, we've got almost a thousand listed ETFs on exchange right now. And what we were really

looking to do is how do we get deeper into providing more support to our clients? So, you know, more capabilities to the 40 ETF providers that are listed in Canada, more resources and capabilities into global ETF providers. And quite frankly, what Vetify really does really well, index creation, so ETF providers can create new products and great solutions so that they can reach a broader investing audience. So that, that's the one to, punch of what we were doing with that investment. And quite frankly, it serves another objective of TMX, which is to get more global. It's one of our stated objectives worldwide is that we want to be more global than local. And this is a great asset to help us build not just in the U.S., not just in Canada,

but around the world. Yeah, global reach seems to be the key story here. The ETF business, I've been covering it for 20 years. It's maturing a little bit here. It's $8 trillion in the United States, most of the money still goes into essentially index funds. Where do you see the growth prospects for the ETF business in coming years? Well, really see it in three places. So one, you know, we are getting to a more mature stage, but I don't think we're there yet. Because when you think about the difference between both kind of where the ETF maturity is versus mutual funds, there's a lot of room to grow. And even the, I'm sure the U.S. is a similar market in terms of the inflows and outflows, ETFs in Canada were up, you know, $38 billion.

billion last year outflows of mutual funds were 57 the other way. But it's still only about a third of the assets under management are in the ETF space versus the mutual fund space. So there's underlying growth still to go. There's underlying global development still to come because as well, as much as Canada, the U.S. are more mature. Other parts of the retail trading universe around the world are not there yet. So you've got that global growth as well. And then you layer in a couple of pieces, more creativity coming from product manufacturers, so looking for more thematic indices where they can create that next alpha that gets investors excited, and quite frankly, more reach to end investors.

So a lot of the fund manufacturers, you know, they're not like the old mutual funds that had their own advisors, so they're still building in terms of their investor awareness. And as they do that, that's actually going to allow them to add more products like thematics, but also actively managed ETS. So I still think there's a lot of creativity to come. And I mean, you mentioned the conference that we were both at. I'm a big believer that the next innovation was in the room. And we're going to hear coming out of that from the connections I made,

what are going to be some of the next great products that come out of this? Speaking of next great products, I've got to ask you about Bitcoin. It's over $60,000. It seems to have moved up since the spot ETFs were approved here in the United States. But most people don't know this. You and the Toronto Exchange listed the first spot Bitcoin ETF. That was the purpose Bitcoin ETF on the Toronto Exchange. That was back in 2021.

So it took three years, but the U.S. finally got to spot Bitcoin ETFs in January. Describe the Canadian approach to crypto, and does it differ from the U.S. approach? You've been ahead of the game here on this. Yeah, I'd say the approach in the products themselves are not materially different. The approach in going to market is probably where Canada is different, our community is maybe tighter in terms of the relationships between both the manufacturers, the exchange, and even the regulators, we can work cooperatively on new products. So that's why you actually see a lot of the innovative ETF product often starts in Canada first. So even when

you go back to the development of fixed income ETFs, they were launched in the Canadian market first before they became more prevalent in the US. And so if you look at both fixed income and crypto in that lens, you know, what do they both do? The ETF actually provides a better two. The ETF actually provides a better tool for a retail investor to engage in a product like this, then going at it directly through whatever over-the-counter market exists for them. And when you compare investing in the ETF versus investing in Spot Crypto, you've got more certainty as to who you're invest with. You've got a regulatory framework around it, better disclosure, better liquidity to get in and out. So it's everything that improves the product for the retail investors. So by working with the manufacturer,

working with a regulator, we were able to do that quicker. And I'm glad to see the U.S. has fallen suit on it. I would note that other companies in the United States have already filed for a spot Ether ETF. There are already Ether Futures ETFs to trade here. But Canada, again, you already have a spot Ether ETF. That's the purpose Ether ETF. You seem to be ahead of everybody on this.

Do you see like ETFs for many different cryptocurrencies, or is there something? they're particularly special about Bitcoin and Ether, and the other ones are sort of in a different category? I mean, what prevents anybody from doing, you know, many, many different kinds of crypto ETFs? I think at that point it's really about scale. Like any other ETF, to be successful, you need to have enough of the underlying activity, the underlying asset for it to be, have that broader investor appeal. And that's probably the limiting factor on other currencies or tokens, but the product and the structure of the ETF would certainly allow for more products to be done. And as this market develops, you could see also indices being created of multiple

types of assets that could be the benchmark for future ETFs as well, where you could have a basket. And that's exactly the kind of thing that VETIFI can help us do. Yeah, we have that in the U.S. already here. Let me move on here. When I think of Canada, I think commodities. Energy and mining a very large percentage of the Canadian economy, larger than the United States percentage, over half of the publicly traded mining companies in the world list with you on the Toronto Exchange. And yet commodities in Canada have underperformed the U.S. market, I think because of the dominance of tech in the United States. Can you address that? How do you feel about commodities right now in its place in a portfolio?

Well, it's a good time to ask that question because we're coming right. up on PDAC, which is the prospectors and developers association conference. It's the biggest mining conference in the world that's going to be coming to Canada shortly. And I do think there has been a timeline on bringing new investment in the space. It's been a little slow in the last couple of years as people are still figuring out what's the demand going to be for lithium, for cobalt, what's the permitting going to be to open up new mines and really provide the minerals that we need for transition. So that has been a bit slow in terms of actually developing in Canada in the U.S. and around the world.

But when you look at the outlook on it, and you've got the point exactly right, we've got over half the world's listed mining companies. And several hundred of them are actually engaged in kind of new economy mining as well. Again, these battery metals that we need for transition, that's all going to need financing. And we've also done historically about 50% of the world's financing in the mining sector. So this is an area that as the market heats, up if we see more certainty around investment, there's potential for a really interesting deal flow on financing these companies. And what you find is those companies that are getting financed in this market, they're developing properties around the world. So they're not restricted to

Canadian assets. They are global businesses that list and raise capital here. Right. So your, your strength is in mining base metals, rare earth metals. This Fedify deal seems to help you. You now also own the Illyrian MLP index that you got from VETify. There's, of course, an ETF associated with this, the Illyrian MLP, ETF, which is pipelines, essentially. Tell us about that acquisition and what you want to do with that. You're exactly right there. The other side of resources is energy, and we're one of the largest energy markets as well. And so having that lens through the MLP market on having a really great product around energy,

you know, helps with the bona fides of our ability between TMX and VETIFIDE, to create other energy-related indices in that space. And a little known fact on TMX is we also operate the largest energy market aggregator in the world. So that's our Trayport business. It's based in London. And it's actually the single screen. If you wanna see all the European energy markets,

particularly gas and power on a single screen so you can interact with that liquidity, you do it through a TMX property in Trayport. And part of our globalization strategy, we're actually working on developing that more to the U.S. market as well. So we have multiple pieces of our U.S. strategy, bringing more capabilities into that market and automating trading around U.S. gas and power is one of those strategies we're working on currently.

And very briefly, I remember having a discussion with you a little while ago about, essentially you have an incubator for small companies at the Toronto Stock Exchange. We're trying to figure out a way to get more companies to go public here, but you have sort of an incubation process. Can you describe that to us briefly? And if you think about it from the outcome, you know, last year there was so few IPOs anywhere in North America, yet we brought 25 new companies onto the senior market through that incubation regime. So we run the TSX Venture Exchange. It is a small cap market. In some cases, compared to the United States, you might even call it a microcap market, where a company can raise public money at a very early stage, Series B, Series C, $5 million, $10 million, and then grow on the exchange, where they can come back and do. you know, cyclical re-raises as they build their business. And when they get to that size where

they're, you know, senior market ready, we can graduate them up and give them that, you know, senior market exposure. So we've been doing this for 20 years between TSX Venture and TSX. We've graduated over 750 companies. So ones that we incubated ourselves on the junior market and brought to the senior market. And it's actually that unique structure of junior and senior was what makes the Canadian market different around the world. With that, we've been able to list almost 250 global companies that didn't have that same access to capital in their home market and they come list with us in Canada to do that. You know, we built all this out of the resource market.

That's where it was originally designed, but it's worked really well for technology companies as well. So, you know, resources, like you said, is the biggest sector. But the closest number two is technology because a lot of technology companies are also multiple rounds of fundraising to build their businesses. So they can do that on the TSX Venture Exchange and when they get scale, graduate up to the senior market, the TSX, and expand and grow. Yeah, John, it's been a pleasure talking with you, and good luck with the VETify acquisition.

I know all of those people, so we'll want to stay in close contact with you. Thanks again, John. John McKenzie is the CEO of TMX Group, which runs the Toronto Stock Exchange. I want to switch gears right now and talk about how one big registered investment advisor is using ETFs to invested 2024. John Davy is the founder of Astoria Portfolio Advisors and Investment Advisor business. business that uses ETFs almost exclusively, an old friend of mine, I have known him for many years. John, we were talking earlier.

You say you are the most constructive. You've been in two years on the stock market. Why? Well, if you think about the last two years, you've had to deal with Fed, you know, hiking rates, rampant inflation, corporates that were preparing for this recession that didn't wind up happening. You know, you had negative real interest rates. You know, fast forward now, the picture's dramatically changed, right?

You've had now inflation come off quite a bit. You've had the Fed that is talking about cutting interest rates. Maybe it's not six. Maybe it's three. If the economy is still strong, maybe you only get two or one. And you have now profits recovery. So we just think now you want to be overweight equities. You want to tilt away from market-cap-weight indices.

So we have a much more bullish picture on the market going to 2024. Yeah. Well, you've got the reasons right here. All of this makes sense. The soft landing is certainly working right now. But you've been very big on quality for a long term. This is a word quality, which has really come into vogue in the last five or six years. It's having a moment right now.

Define what quality means to you. What are the characteristics of quality? And why have we determined that these are factors that drive out performance? Okay. So quality would be companies that, let's say, you know, have stable earnings, not a lot of volatility in their earnings. They pay dividends. The sustainability of their dividends is strong. They increase their earnings.

I would say it's blue chip companies, right? Companies that Warren Buffett would buy. So that's how we define quality, and we have a very quantitative process for how we define it. As far as why I think it's working well, if you just look over the last 20, 30 years, MSCI has these factor indices,

it is the most consistent factor compared to small caps, low volatility, growth, momentum, value. So it's the most consistent, you know, the best risk to adjust to return. So, you know, when we build portfolios for financial advisors, we just, we don't want to be tactical because I think you have to be tactical when you decide between values, small cap, growth, momentum. So quality is just much more consistent. You know, it's funny you mentioned Warren Buffett because essentially what Warren Buffett turned into was a quality investor. He, everyone knows, Warren Buffett famously was under the influence of his mentors in the 1930s, Ben Graham.

And he was a value guy, what they call cigar butt guys picking, you know, poor companies that had underperformed off of the floor, essentially. And under the influence of Charlie Munger, he became essentially a quality investor, which you were talking about, you know, low debt to equity, high return on equity, you know, earnings growth, for example. And so people, essentially what's happened is the market. It's not that Buffett isn't a great stock picker, but he's employing a factor that people have determined is very important in outperformance, one of the only ones, as you mentioned, quality here. I want to move on here and talk about some other things.

Let me just talk about where we are right now in the markets and what's been going on right now here. There are several ETFs that fit this description we're talking about quality here. The biggest is the I-shares quality ETF. That's Q-U-A-L. That's been really neck-and-neck with the S&P-500 in the past year. And again, if you look at what's in quality, what is it? In these screens that show up on Q-A-L, it's essentially big tech names. You see how close they are, too, but those are the S&P-500 versus Q-U-A-L.

That's the blue line, Q-U-A-L, the E-T-F. So it's close. But essentially, if you put up what the biggest holdings are, thank you, here are, NVIDIA, Visa, Meta, Microsoft, MasterCard. These are, we talk about these names all the time. They've been hitting new highs regularly. I keep putting up Visa MasterCard, Outside of the Magnificent Seven, Visa MasterCard, Amex and J.P. Morgan would show up on these things are the big ones.

So quality seems to matter at this point of these characteristics right now. I would point out that NVIDIA wasn't always a top holding. and it were balanced last year into it. Home Depot was the top stock, you know. So there is a rebalance in there. The stocks do change. So it's a little different from like a spy ETF. But it is optimized against, you know, the MSCI USA and NIC.

So it is meant for like an advisor that wants S&P like returns with like, let's say some overlay to the quality factor with the alpha signal that, you know, MSCI in conjunction with BlockRoc is going to create. You've got your own ETF. Everybody does these days. The Astoria U.S. Quality King's ETF. ROE, get it? Return on equity. A-huh. R.O.E. put that up there. But that's underperformed the S&P 500. But importantly, this is an equal weight, not a market cap.

Correct. Weighted. E.T.F. And I just want to show what's in it, how different this is. The other one, NVIDIA is here. But you've got Lilly, which has been a great performer, by the way, in healthcare. Lamb Research, Cigna, which has been a great performer in financials as well. But you see, it's equal weighted here.

so you don't get this kind of, you know, heavy weighting towards a small group of stocks. Now, why is it equal weight? Why is it equal weight? Okay, so good question. So it's equally weighted because we just think that when you build a portfolio, you shouldn't, right now if you buy spy, it's a very defensive strategy. Seven stocks make up 30 percent, okay? And I just think that you are somewhat defensive and embarrassed if you were just leaning in on market cap weighting at the current moment. So last year, we started to become uncomfortable with the exposures that, you know, some of these market cap-cap-weighted indices,

and smart beta products like Qual was given us. So we say, look, we want to have a component of it towards equally weight in. So we prefer like a third market cap weight in, a third equally weighten, and a third, let's say, some of the quant metric smart beta weighten. As far as why we made our product equally weighting, if you just look over time, equally weighted indices outperform market cap weighted. But yes, over time, like, you know, so the yes. Long time.

There's periods where mark cap will do better, weight do better. But as a long-term investor, that's trying to be diversified right now, because I think you have a lot of concentration risk issues in spy. We just wanted to make what equally weighted. So why do you think, I'm always curious about this. You know, in the past, it used to be the biggest determinant of, you know, outperformance was, you know, beta, you know, how sensitive is a stock to move in against the S&P 500. But why is quality won out? I mean, remember there were plenty of theories of going back decades that value would outperform growth over the long term, or small caps would outperform big caps over the long term.

Most people still believe that, but those two factors haven't worked as well. I mean, big caps have outperform small caps, and growth has outperformed value for essentially more than a decade, with maybe 20-22 is the exception. Why? Is there something, I'm trying to figure out what's changed here, if there is anything that's changed, or maybe we're just due for a mean reversion here. Yeah, I think that, so for me, growth and values are tied to like the economic recovery, the profits recovery, when you get a profit cycle increase or decrease, that's when growth

the value would work. For small caps, I think right now, you know, it is about interest rates. And I think, you know, when you go from zero to five and a half percent, that puts so much pressure on small caps. But that happened recently. Small caps have been underperforming before that. That is true. I would say that like, you know, the proliferation of ETFs, you know, people can just, you know, it's just easier to buy spy, you know, it works well over, you know, long periods of time. You know, some of it is active, the past of debate. The value guys have had a tough time.

We had Howard Marks here, a man I greatly admire. I have been reading his stuff for years and years, and yet they've been having a tough time of it recently. Values really had a tough time. And the small cap value, in theory, you combine the two, should outperform, long-term, everything, and it has it for a while. Yeah, there's an argument that you need, you know,

decades and decades. That's like long-term. It's a long time to ask. We live in a world where... 30 years. It's a long time to, like, wait. Yeah, but I would say that if I, I'm, you know, kind of investing for 20, 30 years.

Again, that's part of the reason why we want it to equal to weight are weak, because we do think over periods time, you know, you are making a bet on mid-cap when you equally weight. I would say value and growth is such a big concentration of sector differences at the moment. Tech and growth. But the big keep getting bigger. I mean, you want to talk about equal weight versus market cap weight. So in the last decade, I looked at the RSP, the equal weight ETF against the S&P 500 market

cap and it's still the RSP still underperforms. There's the numbers there. You can see the chart. And it's not far apart. And past the pandemic, as you got into 2021, you saw, that's the orange line, is the S&P 500. And that's tech. As tech kind of pulled away and became more dominant, equal weight had a tougher time. It's not a terrible underperformance for equal weight, but it's still there. And something has happened since then where tech has become predominant. I mean tech, I mean communication services

and tech knowledge. Yeah, I mean, these companies are, no doubt, in the video, you know, Microsoft Apple. Yeah. So is that it? It's that simple. It's a paradigm shift. It's sort of the AI play to a certain extent.

But this was happening before AI even. Yeah. I wouldn't be on the way tech or growth anymore. And those equal-ated indices, you only get 15% and tech exposure, S&P is closer to 30. So again, that's why we wanted to optimize against the S&B sector. What I would say is that diversification, right?

If I was an active manager, Howard Marks, and somebody at Howard Marks's firm had the S&P concentration risk in his portfolio, I'm pretty sure that the risk management department will come knocking on a door. So again, like we just think you should own a couple different verticals. Mark Kapp, Equal 8, and some quantum weight.

It's certainly a good risk diversifier. I don't have any problems with that. I have no problem with the idea and the theory behind. I just have a problem with that it's been underperforming for a while. And I keep waiting for this mean reversion because I'm an old, you know, Eugene Fama, you know, acolyte, too. I feel the same way. In the long run, there should be some mean reversion here. But something's happening.

There's some kind of paradigm shift. Maybe partly this is the AI story, just like Internet was the paradigm shift in the 90s, and it kind of changed valuations dramatically. That may be as simple as that. And they're not that expensive, too, right? Like the S&P, it's only 20 times earnings Navidia. I mean, some of these companies are just not that expensive compared to the antenna and whatever. Now it's time to round out the conversation with some analysis and perspective to help you better understand ETFs.

This is the Markets 102 Fortune on the podcast. Story Advisors, founder John Dobby, continues with us. John, you and I just got back from the ETF conference in Miami Beach a couple weeks ago. one of one thing that interested me was flows so far this year it's about equally split between stock and fixed income ETFs I'm I know you've expressed some surprise to me about why we don't see more money flowing into equities out of bonds with yields the trend generally to the downside although the few weeks yields started moving up. But the trend's been down towards the end of last year. What do you think is going on here? Yeah, I think I'm surprised as I mentioned. I mean, you know, S&B had a

monster year last year. It's already up 8, 9% this year. So I would have expected more inflows into equities. But I think there's so much, and we talk to financial advisors, there's so much hesitation to get out of money markets, to get at a short-term, you know, treasury ETFs because you're getting that juicy, you know, four or five percent yield. But again, like the Fed does that, right? They're mechanically. trying slow the economy down by jacking up rates. I just, again, like for me, you know, stocks pay dividends, you know, they're earnings growth, their claims aren't real assets.

I would just think that they're better from inflation protection standpoint. So I'd expect a lot more influence into equities. You know what I discovered? People, after getting nothing for years in fixed income, people are very happy with 4%. And delighted with 5%. I mean, ecstatic with 5%. Everybody I talked to, they think that's a very good risk return.

Now, I say, you know, you've got to look at the inflation-adjusted risk, and inflation-adjusted, okay, so what are you getting now? 2%, 1% of real return? And even when you say that, they still say, I'm fine with that. I think what's happened is a lot of people I talk to are older, first off. They're, you know, often 50 years old to 80 years old. old and what happened in 2022, I think scared a bunch of them, even though you tell them, look, you're 50 years old, you're going to live another 40 years. A down year like 2022 doesn't

happen very often. And it's not going to matter in a few years. Intellectually, they understand that emotionally they don't. Yeah. And so a lot of people got scared. And I think people, once they saw a return of four or five percent, which historically they knew was sort of more normal, people are happy. That money is very sticky right now. The other thing I would say is that, That's a contrarian indicator, right? If people are unwilling to kind of leave money markets to go into stocks, again, like who's left to sell? So I think that's why you had this big rally since last year. The other point is, you know, there's just like when you look in the equity space, right,

it's really just the U.S., right? Best game in town, right? Emerging markets, China is, you know, export and deflation. They're slowing. Europe is kind of a mess. Europe relies on China. So it just feels like it's the U.S. and U.S. growth in particular. So that could be another reason why it's just not as much equity inflows.

Why is the U.S. continuing to outperform? I mean, it didn't happen just last year. This has been going on since the financial crisis. Is it the peculiar form of capitalism as it's practiced in the United States where a lot of the means of productions is owned by individuals? Is it the tax structure? Is it the court system? There seems to be something structural about this that leads to the outperformance. Yeah, and I just came back from Europe and Italy last week.

It's just a very different mentality in the U.S. compared to like, you know, Europe, Asia, you know, emerging markets. You know, we do have the best companies. I mean, if you look at like these big tech companies, I mean, yes, I'm worried about the concentration risk, you know, and spy, let's say. But, you know, these are very good companies, right? They're like, you know, one company like Google has all these different businesses underneath it. And they're just not grossly expensive in general, like at 30 times multiple. So I think that's why people are just more well. to kind of invest in the US per se and not deal with like, you know, some of these other markets

where they're uncomfortable with regulatory, corporate governance, and just the composition, like emerging markets, you know, there's a lot of tech, a lot of commodities. Europe has, like, more industrials, more materials. They don't have a big tech presence. So just the composition of the world is surprising, like Germany, you know, the second or third biggest market over there, actually doesn't have a very big tech business at all. It's got a few chip companies, but it's not primarily technology-oriented, and we are. Yes.

So I think that's a major factor in. Let me ask you about another trend. Everybody was all hot and bothered about active ETFs, and the numbers seem to be to indicate that most of the inflows still go to passive index funds, people going into like the S&P 500. I think 25% of the inflows that last year were active. What are your thoughts about active and what we should call active? So to me, active is old school alpha generating stock pickers. But people seem to want to say some of these option overlay programs that are out there

are active. I don't know if that should be defined as active. Yeah, I would agree with that. I think, you know, an option over-end strategy, if it's systematic in nature, index-based, it's more in the passive bucket. I do think that, like, active, because, you know, the stock pick and the alpha generation just wasn't as good, you know, in the last, let's say, 20 years. years, 30 years, there's this more of a trend towards systematic active, like, you know,

having a predefined rules-based process for picking stocks, sort of like what DFA does, you know, we also are two funds are active, and our ROE stuff is systematic active. But just, you know, I would say for me, you know, there's a lot of money in passive, it's already well-established. I don't see anyone coming into the passive space when Vanguard Blockrock can give it away for free. So it would make sense that there's more product proliferation in time. active. But I agree with you, Bob. I think the fact that an option over any strategy, to me, that's not really an active strategy. So is there room? Here's my complaint. Number one, a rules-based, you know, active strategy, you know, like an option overlay, isn't really

active to me. And you hit the nail on the head. Active management, old-fashioned stock picking hasn't outperformed. The numbers are very clear. They're staggering, you know, over a 10-year period, more than 90% of the active, the large-cap fund managers underperform their bogeys. So this is a pretty difficult game to beat on a regular basis. Why indexing has won out. I guess what I see now is the ETF business is becoming mature after 20, 25 years, and things like active strategies matter because at the edge, that's how you get more money going into it. people were very excited about the Bitcoin ETFs. I don't know how you feel about watching the inflows.

To me, it's been pretty modest in the last two months. I think it's helped that Bitcoin's moved up. But I think the inflows have been okay but not amazing. It'd be interesting to see in the next month with Bitcoin approaching new highs, if that pulls in a lot more new money. But I'm just trying to figure out where on the edges, other than the usual money creeping in to indexing, does the ETF business, where does it go from here?

Yeah, I think fixed income is very interesting. It is prime for more kind of surgical approaches. What the guys at Bond Block's doing makes a lot of sense, like low cost, targeted exposures, FM acceleration too. Fixed income ETF is growing a lot, but it's still small, much smaller compared to equities. So I would expect more kind of traction in fixed income ETF space. Okay, John, thanks very much.

Appreciate you joining us. John Dobby is with Astoria Advisors. does it for ECFX, the podcast. Thanks for listening. Join us again next week or head to at etfedge.ccccccc.com. InvescoQQQ believes new innovations create new opportunities. Become an agent of innovation. InvescoQQQQQ, Invesco Distributors, Inc.