00:00Let's start with Barron Capital and your entrance into ETFs because, you know, you've been known since 1982 as an
00:07old school sort of stock picking mutual fund shop.
00:10But you entered ETFs late last year and you really meant it. I mean, you hired a team and you're
00:15up to six funds in total.
00:17Talk us through that process of deciding, you know, this is a place we want to enter and, you know,
00:24what the strategy coming into it was.
00:27Sure. Like you said, first of all, thanks again for having me.
00:31As you just mentioned, you know, we are old school, old school, not necessarily in the formats that we use,
00:36but in terms of the research that we're doing.
00:39Each one of our strategies, each one of our investment philosophies has stayed relatively consistent since we were founded back
00:45in 1982.
00:46That's being, you know, true fundamental growth equity analysts and trying to find great companies that we can own for
00:52the long term.
00:53You know, we're thinking about years, five years, 10 years even.
00:56As you mentioned, though, we've become almost known as a mutual fund investor.
01:00Still, mutual fund is an amazing format for many of our strategies.
01:04It allows people to transact at NAV, get access to less liquid securities, works well in retirement programs.
01:10But we're not only focused there.
01:13At Barron Capital, we have a true mission of changing the lives of our clients.
01:17In order to do so, we need to meet them where they want to be met.
01:20And ETF wrapper is one of those areas.
01:22They've been asking us for a while, you know, can you provide your strategies in an ETF format?
01:27And about four months ago, we decided that we could.
01:30And we launched our first five ETFs in mid-December.
01:34And we launched our most recent ETF earlier this month, Emerging Market Select ETF.
01:42So which strategies work better as mutual funds versus those that you can expand to ETFs?
01:47How do you think through that?
01:48Sure.
01:49So we're really looking at which of our strategies and the underlying securities work best in the format.
01:55So we're trying to say, is there liquidity in these names?
01:58Would it work into this kind of format?
02:00And it has.
02:02It showed in that really how I'm judging our success isn't necessarily in terms of the assets that we're able
02:08to gather in each one of these strategies,
02:10which we've been very successful off the bat, having over 650 million in these six strategies,
02:16over 400 million of flows since we've launched.
02:21But really, I want that service to be excellent.
02:23And service excellence really, to me, means keeping that spread as tight as possible.
02:28Only a few pennies wide currently.
02:32And we're really seeing that across our board.
02:34And we're seeing investors utilize this in the right ways, meaning that they're coming in and they're staying with us.
02:38They're not just trying to do this as a quick trade, but they're really thinking about this as an investment
02:42for the long term.
02:43So RONB is the ETF, but it's based on the Barron Partners Mutual Fund.
02:47I became acquainted with this fund over the years, and our analyst, David Cohen, went back and looked.
02:52Is there any mutual fund beating the Qs?
02:55Because the Qs is ridiculously hard to beat.
02:57You were in a handful of names that beat it.
02:59We said, why?
03:00We look back.
03:02You just let Elon do Elon.
03:05I mean, basically, Tesla was a small holding, but you let it get big.
03:09And now Tesla's 26% of the portfolio.
03:11SpaceX is 28%.
03:11So Elon's like 55%.
03:13So just two questions on that really was just like faith in Elon still, because he's controversial.
03:19And then the second thing is just basically not cutting your winners.
03:23You know, Cathie Wood is similarly a fan of Elon, but she would always cut after it went up to
03:28keep the 12% waiting.
03:29You didn't.
03:30You let it run.
03:30It worked out.
03:32Yes.
03:34Elon is controversial in the news.
03:35He's not controversial with us.
03:37We really like him, believe in him, believe in the team that he has around him, whether that's both in
03:42Tesla and now in SpaceX.
03:44You've got to remember, we started investing in Tesla back in 2014.
03:48It took us over two years to actually build that position.
03:51And we started investing in SpaceX in 2017.
03:54And there's obviously a lot of news out there right now in terms of what the potential could be in
03:58terms of an IPO.
04:00Not that I have any great insight in terms of the timing or the pricing, but if everything I'm reading
04:06is progressing as on track, this is still just a stepping stone for this business.
04:12And SpaceX has so much more potential than where it is today in terms of the launch business, driving costs
04:17down, with the communication business with Starlink and more satellites, what they can do with the combination of XAI and
04:23providing that kind of AI training up in space.
04:29And it's interesting.
04:30I mean, you think about how Ron V holds SpaceX.
04:33You own the shares directly, but we've seen this basically cottage industry of all these different types of vehicles, special
04:39purpose vehicles, for example, that purport to own SpaceX.
04:43And you're seeing some of that come into the ETF wrapper as well.
04:47You know, I wonder your broad thoughts on that, those different access points, given that, you know, this is a
04:52company that you've owned for a long time.
04:54And in this case, you own it directly.
04:57Yeah, I think our access and relationship with Elon and the management team has provided that level of access.
05:03We obviously like the business.
05:05We like where this is going.
05:06As we were talking about earlier, we try to own businesses for five years, 10 years, decades.
05:10Really, what can this business become over time, not where it is today?
05:13And I was saying this is just a stepping stone.
05:15You know, we'd be at the prices that they're talking about, we'd actually be buyers at this kind of price,
05:20you know, considering what they can become over time.
05:22And I think that's attractive for a company to say, hey, these are investors who really want this business to
05:27fulfill its long-term objectives, its mission.
05:29These are mission-driven businesses, whether it's Tesla, whether it's SpaceX, XAI.
05:34What can these businesses become?
05:35And we're true believers in their ability.
05:38And, you know, each and every day, we're out there talking to the company, talking to management teams, ensuring that
05:42the competitive advantage of this business is sustained.
05:45And in many cases, actually getting more enhanced, that we are believers that this can become, you know, what we
05:52think is going to be over time.
05:53So I'm semi-optimistic and even pretty liberal on adding these private companies into ETFs.
06:00There's a baby step process going on.
06:02You have SpaceX in here.
06:03Might you add Neuralink, right?
06:05Because Neuralink is a private company that people are really interested in.
06:08And it's currently in the ARK Venture Fund and a couple other Interval Funds, but not in an ETF yet.
06:13Could you maybe add that, given your relationship with Elon?
06:16It's something that we've looked at.
06:18It's something that we've studied and researched.
06:20We don't own it yet in any of our strategies, mutual funds or ETFs or sub-managed accounts.
06:26But as you were asking earlier, you know, we're trying to place the security.
06:31First of all, does it fit the Barron Capital criteria?
06:33Does it have the growth objectives that we're looking for?
06:35Or does it have the competitive advantage in the management team that makes us excited to own something for a
06:39long period of time?
06:41And then it's finding the right vehicle for it.
06:43And something like SpaceX is a unique case in terms of the liquidity that historically has been there while it's
06:50been a private company.
06:52Neuralink, I'm not so sure if it has that kind of liquidity.
06:54And we would place it in the right structure that matches that liquidity.
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