00:00I just wanted to start broadly here and get your sense of how you're feeling about markets and the broader
00:04economy
00:04as we get ready for the proceedings that are going to take place today, where uncertainty, global uncertainty is going
00:09to be such a huge overarching theme.
00:11I think we have moved decidedly into a different era for investors where they were rewarded for efficient portfolios,
00:18concentrated, optimized, the ones that are much more resilient.
00:23And we've seen growth be fairly resilient, broadly speaking.
00:26But, of course, capital costs are increased, geopolitical tensions, technological change.
00:31These are much more pervasive today.
00:33And so what investors really need to be thinking about is a broader set of potential outcomes.
00:39Stay invested, but yet at the same time really think about what these macro risks could do to their overall
00:45portfolios.
00:46With those in mind, when you look at the landscape, both geographically and based on industry technology,
00:51where do you see the bright spots?
00:53Where are you telling people to put their money?
00:55We still see tremendous opportunities, broadly speaking.
00:58If you look at our own portfolio, we remain at benchmark for equities and fixed income.
01:03But I think the fact that yields are higher today, it just raises the bar for all other asset classes.
01:09So when you think about equities, it's important to think about companies that have really durable earnings,
01:16strong balance sheets, ability to withstand these higher financing costs.
01:20And then at the same time, we're seeing some of our large institutional clients add other elements to their portfolios
01:27that are more buffers.
01:28Increased liquidity, maybe metals like gold allocations, uncorrelated hedge funds, floating rate type of products.
01:37And then increasingly, particularly in the ETF market, huge interest in short duration and ultra short duration fixed income.
01:45Oh, interesting.
01:45Let's dig into the ETF market a bit.
01:47And something that you've done so well is give retail investors in particular this window into the private markets,
01:52which we haven't talked about yet over the course of this morning's show.
01:55How much demand is there for that?
01:57What have you seen in terms of that demand since you've begun kind of making those products available to investors?
02:01Yeah, so we launched three separate products over the course of the last year, really with a focus, as you
02:08mentioned,
02:09both public index exposure as well as private markets exposure on the credit side.
02:14Most importantly, it's investment grade.
02:16We really worked hard to ensure that there's good liquidity, and the performance has been really quite good.
02:21We've been pleased with how they've done relative to other offerings in this space.
02:26And today, across the range, we're probably nearing about a billion in total assets already.
02:31When you look at smaller retail individual retirement investors, do you think they should have more access to that private
02:37credit?
02:38You know, I think that it really depends on people's time horizons.
02:42You know, where we have focused is in their retirement assets, because if you look at their overall where they're
02:48putting their money,
02:49that is obviously like the longest time horizon.
02:51So we've launched target date fund series with a 10% persistent allocation to private markets broadly, so equity, credit,
02:59real estate.
03:01But the rest of it is very liquid, index-oriented.
03:04So it's almost a barbell approach that we think sort of delivers the best of both worlds.
03:09Something I keep hitting on is how, you know, for a long time, regular investors, I use that in quotation
03:15marks,
03:16didn't really have to worry about energy prices and commodity prices to the degree to which they are now.
03:20And we're in this moment where we have this oil super shock, global super shock.
03:23And it is something that we have to be cognizant of in a way that we haven't been before.
03:26How do you think about that?
03:27How much do you think about the ways in which, yes, oil, but also these refined products stand to have
03:32a huge impact here on the economy going forward?
03:34Yeah, you know, I think that there's been so much focus on the markets, on what is the Fed's next
03:39set of moves,
03:40and maybe a little less focus on what if inflation is more persistent and we're in a higher or for
03:47longer rate environment.
03:49That suggests that parts of the portfolio really need to be doing different things for investors.
03:54So it's all about, you know, this notion of resiliency and ensuring that whether it's a high inflation, low inflation,
04:01a high interest rate, low interest rate environment, they have parts of their portfolio really working for them.
04:06So you can get through sort of the short term and be well positioned for long-term terms.
04:12With all those uncertainties and kind of changing metrics in mind, how are you advising people to think about their
04:18retirement funds?
04:19When I started my first real job, the old guys were like, you get the 401k, you max it out
04:23every month and you'll be good.
04:24People are retiring earlier, they're living longer.
04:27That's not necessarily going to cut it anymore.
04:29So what do you tell people?
04:30I think that's right, and that's one of the reasons why we've innovated so much in the Target Day Fund
04:34space.
04:35And one of the most popular products that we have today is called IncomeWise.
04:39It has guaranteed income.
04:41And so you participate in markets through, you know, your working years, and then there's managed payout,
04:46and you can ensure that you have enough income for life.
04:49It's those sort of products that make a tremendous amount of sense.
04:52And we also see tremendous demand for income-oriented products, generally speaking.
04:58Just because as populations get older and hopefully we all live longer, right, we want to make sure that we
05:04don't outlive our savings.
05:06Let me ask you last, I'll go to the front end of that age spectrum.
05:09So your spider product is integral to these Trump accounts that were introduced a few months back.
05:14And I'm curious, sort of, obviously I imagine there's been a lot of inflows there, but what does it look
05:19like,
05:19and what does that say to you just about the way in which we think about not just our futures,
05:23but the futures of our children as well?
05:26You know, one of the key factors of creating wealth over time is investing early.
05:31And there's a second one, is staying invested.
05:33And I think that's what these Trump accounts do.
05:36Our products, BuyIM, is a default investment option.
05:39It's the lowest cost, S&P 500 exposure.
05:42And we're really excited.
05:43I mean, you can't start much earlier than Burr.
05:45Burr is right.
05:46And to have broader exposure to the markets and to have people realize that having money invested in the market
05:54is a really important way to be in a better position for retirement.
05:58All right.
05:59Maybe you can give me some advice off camera when we're finished.
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