 Let's go over to our man Mr. Dave Mazza. Dave is the managing director head of product at Direction and you can Check out Direction and it's spelled D I R E X I O N Com course you can be right on our web page of TFN. Just hit the direction banner Dave Mazza. Welcome back to TFN Hey, thanks for having me back. I'm telling you man. I I love that you're on today, so I Want to talk about the ETF conference you were at last week But what I'd like to talk about first is that so China's closed, right? We're getting calls in here last Thursday and Friday and it was so cool that The audience was picking up on this so quick, right? So let me ask you something and the calls were about Chad and then yin and yang Okay, so can we start with Chad right because they what happens folks is that you know Just go to the website you can see how these work and what I was trying to figure out They will they will they were buying it because they felt that okay the markets down, you know, what is the correlation and When you we look at Chad now the markets are closed in China, right? How Do you guys turn around and let's say it almost when I was looking at the trading It was almost like the option market that there's so many people in it that it stayed like where it was supposed to open This morning, but like how did that happen? No, exactly one of the most interesting but in the weeds components about ETFs in general And then that becomes even more important when we're talking about leveraging ETFs. Yes, is that the term is yeah price discovery and ETFs Are actually able in some cases to lead price discovery in markets that are closed And this really was exemplified last week It was we know the a share market, which is just local Chinese companies in Shanghai and Shenzhen Yes, we're closed, but to your point our ETF was actually Tracking very well where the implied price would have been and what is implied price mean? It means We can look at other markets that are related To China. Yes, so those would be Hong Kong shares or H shares Those are Chinese companies that trade in Hong Kong and then do a conversion for the currency and last week Buy-in-large E2F ETFs. I'll use the term traded beautifully meaning that they traded in expectation of where markets would open So we actually saw the local market catch up if you will yes to where ETFs were pricing The fact that markets would open down in local China locally pretty significantly And in a folks, you know if you're looking for the symbol this is so impressive It's amazing So if you're looking for the symbols and these ones I'm familiar with because we've got the calls in last week You have a one-to-one which is chad and that the chad I believe is a CS is the 300, right? Correct Yes, and then then you have the triple Okay, which is the y in y in n in the yang y and g which is Based off a different Endacy, but I love how you do it meaning the weighting structures, right that that's inside The China bull and bear three times shares Correct. So so let's talk about the Chinese equity market in the weeds for a second here Yes, so historically most us investors in fact most Non-local Chinese investors were only able to access Chinese companies listed in foreign markets Most of them listed in Hong Kong, but of course, we know Chinese companies listed New York or they can list in London Yes, so yin and yang are focused on the largest Chinese companies that trade in Hong Kong Now the chat and chow Those are focused on the CSI 300. So that's what's known as China a shares Okay, those are those are the largest Chinese companies 300 of them in fact that are traded locally in China I see it. I like it man. Pretty amazing. I'll tell you and now and everyone of course is always looking for an edge You know and so what had happened? I was used to the yin and yang I hadn't been used to the Chad, but I'm glad people could cut on to it They caught on pretty quick man, which I thought was pretty pretty cool and generally meaning the Education value of this ETF structure in general. I think has gone up dramatically So if we could switch gears, I know last Monday I mean, I believe that's one of the biggest ETF conferences in the world that you are at, right? Correct. Yes So can you tell us a little bit about? The changes that are happening in the ETF market, you know, I might understand is that regulation wise We got a lot of changes that are happening, right? Yeah So I think the biggest takeaway for most attendees of the conference, especially those that have been there For many years like ourselves is that we saw a lot of unfamiliar faces and all that means by that Is that a lot of traditional active managers? We're at this conference because Most recently the SEC has approved a modification of the ETF structure for something new and these would be called Non-transparent ETFs so meaning an active manager who may not want to show their holdings and Because they believe that of course they have an edge or that they want to be selecting securities Without learning the the the marketplace about this could launch ETFs that only disclose their holdings on a less frequent basis Than ETFs have to do now, which is daily So this is a pretty interesting development where we're gonna see a lot of new launches From your traditional active managers now, of course listeners on the phone time will tell if these catch on yes But it's gonna be a big trend that we see in 2020 When I read about how this gonna work folks, and this is really intriguing I don't know enough about the mutual fund market It are they gonna be have to disclose what's in there like once a quarter or once six months Is there is there a number at this point that they're gonna have to disclose? What's inside them? Correct? So here's what's different is like a traditional mutual funds disclose their holdings on a quarterly basis with a lag Okay, that's the same with 45 dollar lag. Yeah, 45 exactly. Yeah, but what's different is that? some of the structures will allow Fund managers to have a proxy meaning that they select a certain number of securities that would be in their holdings to use To publish to the market on a daily basis. Okay, other structures are almost completely Untransparent where you wouldn't have a lot of insight into what the fund manager is holding So this really comes down to the idea that the ETF structure Is beneficial relative to the mutual fund and now that's debatable But the idea is that the ETF structure. It's a lot cleaner. There's no 12 b1 fees or transfer agent fees So maybe that if we believe active management is finally coming back People will as they continue to put more and more ETFs in their portfolio. They'll want an ETF Vehicle for active management Interesting man. It would seem that like it's really hard for me to wrap my head around that I'm buying something I don't know what's inside the ETF Yeah, exactly, which is why you know here at direction. We're obviously paying attention to this We don't have any plans to rush into that space our heritage is an inactive management anyway There's a big debate if these are gonna be, you know, the next big thing Yes, or if they're gonna be a flop, frankly, right in my opinion They're gonna I don't know exactly where that's gonna be, but it's gonna be one or the other I don't think you see a middle ground with approaches like this either People say hey, actually, yeah, I still believe in active management in certain asset classes Sure, but I like the ETF vehicle because I can trade it in today There's some tax efficiencies or people are gonna say, you know what? I like to control that ETFs have my portfolio because they're passive because they give me access to all new different markets and different sectors And I like that either my advisor can build me a more robust portfolio or I can do it myself So I don't necessarily need an active manager to do so. So we will see No, because I you know what I can see what you're talking about because There's plenty of people that have mutual funds that would like to get in and out of them every day Whether it's an IRA or anything else interesting them. Well, Dave, it's always a pleasure. Thank you so much for the Education, especially the China deal in a huge way look forward to speaking again Talk to it. Thank you. Stay right there folks come right back