00:00Let's talk about Shield, that you have a defense ETF. Of course you do, right? You have every theme pretty much. What's going on here? What's all the interest? Is this a theme really driven by Europe or is there more to the story?
00:13Yeah. So for us, it is a global defense technology ETF. And look, from our perspective, we launched this fund less than two years ago, Eric. In that time period, as you all know, lots of ETFs have launched, 1,300, a little bit above 1,300. Only 2% have raised over $2 billion. Ours is just under $3 billion. So it's a theme that really has been exciting for us and our clients.
00:37We continue to have client feedback around the need to invest more in defense and defense technology. And that's something we continue to be excited about into the future.
00:45Katie, Shield up 58% this year.
00:48That's pretty good. I mean, it really speaks to how theme ETFs, it's like you can really have these big pop moments or you can fizzle. So let's talk about the fizzling because I have to imagine from the issuer's perspective, it must be difficult to decide which theme to really put a product behind, throw your weight behind.
01:07And invest in, for lack of a better word. So talk us through that decision.
01:12Sure. So the three words that we think about are, first of all, is it possible? Is it possible in a 1940X structure? That's the first and most important component. Second is valuable. Is it valuable for clients? And then third, is GlobalX credible in launching and running that type of ETF?
01:28We spend a lot of time listening to our clients as we think about those three words. And ultimately, you know, we have a deep amount of conviction in all of those themes that we bring to market.
01:39SHLD and global defense technology is a very good example of that.
01:42And I know that Bloomberg Intelligence keeps a Lazarus list of, you know, ETFs that shut prematurely and might have missed their moment.
01:48I want to bring that question to you. I mean, when do you decide that this thematic ETF that you launched maybe just isn't worth it and risked ending up on that Lazarus list?
01:58Sure. So, look, we spend a lot of time looking at and thinking about our launch process and the different funds that we have out there.
02:04The last time I was on, we talked about the one, three and five year kind of reviews that we do.
02:09At the same time, you know, there are a number of themes that we have that are out there that have been around for a long time and take some time to really pop, Eric, to use your terminology.
02:17So from GlobalX's perspective, you know, we are a thematic shop. That's where we come from. That's who we are.
02:22We're going to continue to stay, you know, focused on that. But honestly, we're more than just thematics, right?
02:27Last year, we had the Emerging Markets ETF of the Year in ARGT, as you well know, Eric.
02:32Our CLIP ETF, which is our one to three month treasury ETF, is now a billion and a half dollar ETF.
02:37So exciting times across the thematic space.
02:40OK, one more theme question, I promise.
02:43OK, you have AIQ.
02:45Yes.
02:45This is the AI robotics ETF. That's been a huge category.
02:49But you've got these humanoid ETFs coming out now.
02:52You've got HUMN and COID, which are both out.
02:55Is that a theme that's actually ready?
02:57We debated this on our team because can you have a pure play humanoid or is there a lot of like what we call beta filler in those?
03:04And are you planning to how are you going to deal with the onslaught of humanoids?
03:08Yeah. Great question.
03:10That came out weird, but you know what I mean.
03:11So the first thing I would say about AIQ is as we track that competitive universe, we have just less than 50% market share in that category with about $4 billion in that product.
03:20So that's one that we're super excited about.
03:22But look, on the humanoid side and the hardware side of robotics and technology, that's something that we see exposure to through bots, BOTZ, one of our larger ETFs on the thematic side as well.
03:32So the point is you get exposure through bots, and it's a space that we continue to keep an eye on.
03:36So you mentioned that you're more than just thematics.
03:39Correct.
03:39You recently launched a bond ETF, which is not necessarily in that universe.
03:45The investment grade corporate bond ETF, the ticker there is GXIG.
03:49So I know that you use AI in some sense when it comes to security selection here.
03:55You bill this ETF as aiming to solve for the inefficiencies in fixed income markets.
04:01That can mean a lot of different things.
04:04Tell us what it means in the case of this specific ETF.
04:07Look, the first thing I'll say is GlobalX is known for developing innovative and disruptive solutions, and we see this as being no different.
04:15When you look at this product, GXIG, it is an actively managed product, which allows RPMs to take advantage of a quantitative factor-based model alongside artificial intelligence that really allows them to process a massive amount of information in the investment grade space in the U.S.
04:32Here alone, there are over 8,000 different bond issues in the IG U.S. index from 1,000 different issuers.
04:39Our view is that there's no better place to apply AI into the investment process to potentially drive better risk-adjusted returns for our clients.
04:47And you know what the best part about it is?
04:49It's in an ETF wrapper, as you well know.
04:52Tax-efficient, transparent, and reasonably priced.
04:55We've priced this product.
04:57It's the lowest-inscategory.
04:58It's also comparable to similar passive products as well.
05:01Talk to us a little bit more about what role AI plays in the selection process.
05:05Like you said, there's over 8,000 bond issues, and there's a lot of ETFs, actively managed bond ETFs, that would say, you know, we find the ones that are actually trading, rather, and sort of sort through some of the dusty old issues there.
05:19Why do you need AI to do that?
05:21Ultimately, the one thing that I want to be very clear about is this is run by portfolio management.
05:25This is a human discretion portfolio.
05:27What AI does is allows RPMs to look through that raft of information to sort and understand where we want to be invested.
05:34So we think it's a matter of taking human intelligence and PMs on an active basis, combining it with that AI capability in order to drive better investor outcomes.
05:44And I know GlobalX was first launched for expats, and you had a lot of international ETFs.
05:50The Greek ETF, believe it or not, Katie, is up 56%.
05:53It's your second-best performer.
05:55Not a lot of bites.
05:57Why are these single-country ETFs?
05:58How do you get them going?
05:59So, like anything else, we want to provide a full menu of strategies for our customers to choose from, based off of what's going on out there in the markets.
06:08There can be, and there are, many different catalysts in the market that drive that.
06:12With GREK, you know, certainly we're waiting for that catalyst, and we've seen some catalysts, actually, ongoing, as you highlight.
06:18But from our perspective, as clients would want to put on a view, GlobalX should have an offering out there for them.
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