Let's Talk ETFs

What if investors could capture the full upside of equity returns - but with less volatility and smaller drawdowns along the way? After 20 years working in all parts of the asset management business, Armor Index ETFs founder Jim Colquitt hit on an approach that he feels does just this. Listing on February 11 of this year, his firm's Armor US Equity Index ETF (ARMR) attempts to algorithmically game the system through sector rotation. While the back-tested results have been phenomenal, can the fund hold up in the current brutal market environment? Jim joins Let's Talk ETFs to weigh in on current markets and explain how ARMR should insulate investors from the worst of the bearish action.
Show Notes

2:45 - Jim Colquitt's Background: Why he got into investing and how he ended up where he is today

7:15 - Why Jim struck out on his own and founded Armor

10:45 - Assessment of the market's reaction to the Covid-19 pandemic

17:15 - Armor US Equity Index ETF (ARMR): What is the fund's overarching strategy and how does it achieve this?

22:30 - Cases where ARMR isn't invested in equities at all (IEF)

28:15 - Which is more important, avoiding losses or not missing gains? 

33:30 - Is a once a month re-allocation sufficient in highly volatile markets like the current these?

35:30 - Does the monthly trading lead to unwanted tax consequences?

37:15 - Which family of sector ETFs does ARMR use for exposure to the 11 GICS sectors?

41:00 - Is ARMR meant to be a core portfolio holding, or a satellite way of increasing alpha?


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In his nearly five decades as a professional investor, Buckingham's Larry Swedroe has seen every type of market, including roughly 20 different "panics" of varying scopes and magnitudes. Despite the fact that the coronavirus-induced sell-off was the fastest in history, with the Dow losing 37% in 23 days and no indication the bottom is in, he remains optimistic. On the latest episode of Let's Talk ETFs, Swedroe offers his accrued investing wisdom - borne out by real-world experience and supported by reams of academic work.
Show Notes

4:00 - Larry's unique perspective for the current panic

9:00 - What's the situation like in St. Louis (where Larry lives)?

12:15 - How should investors be reacting given the current situation?

15:45 - Three different types of bear markets: 2000 vs. 2008 vs. today

26:00 - Weighing the costs of an extended pandemic and subsequent social distancing on the U.S. and global economy

36:30 - Understanding the differences between "risk" and "uncertainty"

41:00 - Figuring out the right portfolio allocation strategy

54:30 - The "Larry Portfolio": How could it have helped investors be in better shape for the current market panic?

1:11:30 - Are classic valuation metrics still relevant given how modern companies operate?

1:17:45 - Does the "momentum" factor work during violent market shocks? When does it work best? 

1:28:30 - Why does the market sometimes have extreme moves on no news?


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With both equity markets and fixed income going pretty much straight up for more than a decade, investors had reached a state of complacency by the time coronavirus hit. Liquid alternatives offer investors a third leg of diversification, helping to stabilize portfolio performance by tamping down overall volatility. IndexIQ has been at the forefront of rolling out liquid alts ETFs for more than a decade, with a range of strategies of interest to investors in the current environment. Its Managing Director and CIO, Sal Bruno, joins Let's Talk ETFs to explain why every portfolio needs some baseline exposure to liquid alts - and how IndexIQ's different ETFs achieve their objectives.
Show Notes

3:00 - Where does IndexIQ's focus on placing hedge fund style strategies into ETF wrappers come from?

6:30 - The term "alternatives" means different things to different people. How does IndexIQ define it?

9:30 - What are "liquid" alternatives?

13:45 - Why should every properly diversified portfolio have some evergreen allocation to alternatives?

16:30 - What percent of a typical portfolio should be in liquid alternatives?

Strategy objectives of key IndexIQ ETFs

21:00 - IQ Hedge Event-Driven Tracker Merger ETF (QED)

23:00 - IQ Hedge Macro Tracker ETF? (MCRO)

26:00 - IQ Hedge Long/Short Tracker ETF (QLS)?

28:00 - How do you select the underlying ETFs that make up these funds?

31:45 - Why are 50% currency-hedged equity ETFs a better mousetrap? (HFXI), (HFXE), (HFXJ)  

36:30 - How is IndexIQ's approach to ESG unique? (IQSU), (IQSI) 


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As the founder of white label ETF issuer Nottingham Funds, Kip Meadows has developed real expertise in key areas of the ETF space - particularly in Cannabis Investing, where his firm has been the force behind several ETF launches and in the non-transparent active ETF space. He covers both in great detail in the latest episode of Let's Talk ETFs.
Show Notes

3:00 - Explanation of the "back office" side of the ETF business

4:30 - The white label fund launch process

7:00 - What do investors interested in investing in cannabis funds need to look out for?

11:00 - What's better in the cannabis space: active management or passive index funds?

13:00 - What industry is a good comparison to the cannabis industry?

17:00 - What are major challenges in the space right now?

19:30 - Do we need to see U.S. legalization to see a run up in the sector's stock prices?

23:00 - Non-transparent active ETFs: Why have active managers stayed away?

26:00 - 5 different ways to attack the non-transparent active ETF issue

33:45 - What are the benefits for investors of buying one of these active funds in an ETF wrapper vs. a mutual fund wrapper?

35:00 - Analyzing the cost structure

38:00 - Of the 5, do you have a favorite model? Which do you think is most beneficial to investors?

40:00 - Will new the American Century funds open the floodgates for other active managers to enter the ETF space?


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With markets in sell-off mode the world over and few asset classes spared - Oil is below $35/bbl while the S&P 500 is down more than 6% on the day as I write this on Monday March 9, today's conversation with Macro specialist Eric Basmajian is hugely important. Eric is Head of Macro Research at Pervalle Global, a discretionary hedge fund specializing in global macro driven trades across all major asset classes. He first began contributing to Seeking Alpha in 2017, building up a following of more than 12,000 investors and becoming Seeking Alpha’s top contributor in the Economy vertical through his unparalleled analysis of key macro-economic trends - and his ability to turn this analysis into actionable, top-down portfolio advice.
In addition to his role at Pervalle, Eric runs his own Seeking Alpha Marketplace service, EPB Macro Research. In addition to the steady stream of macro analysis subscribers to EPB Macro Research get, they also gain access to EPB’s Model Tactical Asset Allocation and Long-Only Asset Allocation portfolios - 2 low cost, all-ETF portfolios overseen directly by Eric. By combining an asset class mix that includes stocks, bonds, gold and commodities - tilting based on underlying macroeconomic conditions - Eric has created an all-weather portfolio which tamps down risk and volatility while attaining impressive longer term appreciation of capital. And while under normal market conditions that may seem like a less sexy approach, its performance in the current environment makes it all worthwhile. 
Eric joins Let's Talk ETFs to talk his book.
Show Notes

2:30 - How did you get into your "macro" approach?

8:15 - The current state of the global economy

11:00 - Is the fed funds rate in the right place now?

17:45 - Where do you see the consumer in this economy?

22:00 - Is the lack of corporate earnings recession a positive?

28:00 - Thoughts on tech stocks

34:00 - How do you deal a black swan event like the Coronavirus in portfolio management?

39:15 - Specific take on the Coronavirus

41:15 - How do we deal with underlying economic issues and break the debt cycle?

49:15 - Household savings

51:00 - Portfolio construction process, baseline allocation

58:45 - Are you shifting equity allocations?

1:07:45 - Fixed income... only treasuries?

1:15:00 - What would it take for you to move to TIPS?

1:21:30 - Gold as main commodity exposure

1:26:30 - Any attempts to include other asset classes?


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Study after study has shown that picking stocks that turn out to be winners is an exceedingly difficult task, with very little consistency in performance over time. Thus, the common refrain of "Past results are no indication of future returns". But what if instead of trying to pick likely winners, you instead screen out the potential losers from your portfolio?
GraniteShares Founder and CEO Will Rhind had just this thought, which he decided to put into action late last year. He rejoins Let's Talk ETFs to discuss his firm's newest strategy, The GraniteShares X-OUT U.S. Large Cap ETF (XOUT). XOUT takes the largest 500 U.S. companies by market cap and runs them through a series of screens meant to single out companies demonstrating the least adaptability in the current age of technological disruption. The bottom 250 U.S. large cap stocks are thus removed from XOUT's portfolio, with the screen re-run and the portfolio rebalanced quarterly. And while past results are certainly no guarantee of future results, the fund has garnered strong investor interest out of the gate.
Show Notes

3:15 - What's the basic underlying strategy of the fund?

6:15 - How is the index constructed? How do you exclude the losers?

9:00 - How did you arrive at your 7 selection criteria?

11:00 - Why do you reshuffle the index quarterly?

12:30 - Story behind the design of the strategy

17:15 - Will this strategy be able to predict a shift from growth to value?

21:30 - Sector weighting. Does the overweight on healthcare and IT cause any concerns?

27:30 - Why aren't Verizon and AT&T included? 

31:30 - How does the exclusion of some financial services companies reflect on the industry? 

34:30 - "Fun" pairs trades of rivals based on which is in and out of the index: Coke vs. Pepsi, Visa vs. Mastercard, Walmart vs. Costco, State Street vs. BlackRock

36:30 - Why a large position in QQQ?

38:45 - Strategy behind HIPS ETF

44:45 - What's the rate risk with HIPS?


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Starting out with a focus on indexing Israeli equities, BlueStar Indexes gained a deep understanding of key sectors driving the global tech revolution. BlueStar's Steven Schoenfeld applied his patented indexing approach, involving painstaking company level research combined with a global view of corporate revenue sources to more than 20 thematic tech indexes. Steven rejoins Let's Talk ETFs to offer an under-the-hood look at three ETFs that track proprietary BlueStar indexes: FIVG (5G Technology), QTUM (Quantum Computing) and DIET (Food Sustainability).
Show Notes

2:00 - Where does BlueStar's focus and unique approach to building thematic tech indexes come from?

7:00 - What differentiates your approach as an indexer?

10:15 - How do you handle indexing specific technologies that may only be a small portion of big tech companies' earnings?

14:15 - Why the partnership with Defiance as the issuer on most of your thematic ETFs?

17:45 - Going under the hood of the Defiance Next Gen Connectivity ETF (FIVG): How is it constructed and why has it had such a resonance with investors out of the gate?

22:15 - Will this index evolve over time?

25:45 - Going under the hood of the Defiance Quantum ETF (QTUM): How do you build a pure play index for something like quantum computing that doesn't really exist in product form yet?

32:30 - Under the hood of the Defiance NextGen Food & Agriculture ETF (DIET): How do you get ideas for creative indexes playing on global demographic trends like this?

38:15 - How do you deal with large conglomerates that find themselves on both sides of this issue?

44:30 - Why the focus on China and Asia tech?

48:15 - China weightings in emerging market funds are continuing to rise - A word of caution to investors

52:30 - Some indexes Steven is particularly excited about right now


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One of the best things about exchange-traded funds is how compatible they are with a do-it-yourself ethos. Unlike with mutual funds, ETFs are fully transparent and easy to research meaning investors know exactly what they are getting with each fund they add to their portfolio. On the latest Let's Talk ETFs, host Jonathan Liss takes a break from the usual expert interview format to help his friend build her own ETF portfolio.
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On the heels of the Super Bowl, Let's Talk ETFs takes an in-depth look at the world of competitive gaming and the burgeoning entertainment complex sprouting up around it. Known collectively as "eSports", this growing phenomenon already has a huge following in China and South Korea - and has started to gain traction in the U.S. and Europe. Having launched the Roundhill BITKRAFT Esports & Digital Entertainment ETF (NERD) in June, Roundhill Investments CEO Will Hershey joins the podcast to make the long case for eSports.
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Starting out as a classic value investor ala Graham and Buffett, EMQQfounder Kevin Carter had a revelation after the unwinding of the late 1990s tech bubble that emerging markets were going to be at the forefront of the next massive wave of internet growth. As Carter puts it, "You have billions of people just starting to go online, changing their consumer behavior... this is the greatest investing opportunity of our lifetimes." As a result of his revelation, Carter gradually made the shift from traditional value investing to high-octane emerging markets internet growth. 
At first he recommended funds like the Columbia Emerging Markets Consumer ETF (ECON) to friends and colleagues believing it to be the best fund available to capture this growth. But then about 7 years ago, Carter had a second revelation: The best fund to capture emerging market internet growth doesn't yet exist. Teaming up with his friend Dr. Burton Malkiel of "A Random Walk Down Wall Street" fame, he decided to form an index committee to create a pure-play index and accompanying ETF, the Emerging Markets Internet & Ecommerce ETF (EMQQ). The fund launched in 2014, gathering more than $400M in AUM over the past 5-plus years. 
Show Notes

1:45 - How did you get started in investing generally and in ETFs specifically?  

14:00 - Why the pivot to emerging markets? 

25:45 - Changing habits of consumption in emerging markets

27:15 - Why is now the time to invest in emerging market technologies?

35:45 - How do address concerns of EMQQ's being too heavily weighted towards China?

40:30 - Why does EMQQ have an 8% weighting cap, and a limit to US listed companies and ADRs?

44:15 - Digging in EMQQ's holdings: Alibaba (BABA), Tencent (TCEHY), Pinduoduo (PDD), StoneCo (STNE), Yandex (YNDX), Jumia Technologies (JMIA)  

54:45 - Future plans for EMQQ


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