YouSaid · the spoken record

Perth Tolle

lines on the record: 102
first: 2022-07-01
most recent: 2022-07-01
sittings or episodes: 1
sources: podcast

Every line below is reproduced as it was said and linked to the record it came from. Nothing here is summarised or generated. Directory · Search · Corrections

“Russia and Saudi Arabia were in there right now. Russia's out. China's down to like 33. But it's still, you know, kind of a high concentration. Saudi Arabia is still in the top 10. You still have Turkey, Egypt, and all of these others. So there's just a high concentration of these autocracies. And I think people were at the time saying, finally, there's a way to invest in emerging markets without funding autocracies.”
2022-07-01 · Masters in Business · Perth Tolle on ETF Freedom Metrics · IDENTIFIED FROM THE TRANSCRIPT · source
“The growth potential of the freer markets to be the launch pads for growth in the next decade. So especially in emerging markets where they're coming from this very low base. So I think in emerging markets, because there's such a high concentration, when we launched, I think China weight was about 40% in most emerging markets.”
2022-07-01 · Masters in Business · Perth Tolle on ETF Freedom Metrics · IDENTIFIED FROM THE TRANSCRIPT · source
“To have those awards. But I think what it was is that intuitively, investors just understand that freer countries have more sustainable growth. They recover faster from drawdowns. They use their capital more efficiently, whether it's human or economic capital. So, you know, capital goes where it's welcomed and where it's well treated. And that's Walter Riston quote. Right. And capital is not just money. It's also people and ideas. And you look at the capital outflows coming from Russia right now, coming from Hong Kong, the millionaire exodus. There's, I believe, more millionaires per capita coming out of Hong Kong than anywhere else at this point. And I think that just speaks to”
2022-07-01 · Masters in Business · Perth Tolle on ETF Freedom Metrics · IDENTIFIED FROM THE TRANSCRIPT · source
“And then, you know, women were allowed to drive all of a sudden. But at the same time that the women were allowed to drive, they put four women who had campaigned for women to drive in jail. One of them just was released. Some of them are still in jail. My friend Manal al-Sharif, who has been jailed for campaigning for women to drive in the past and is now exiled in Australia. She did a poll women to drive movement here in the United States at that time to protest those women being in jail. So in these countries, you have to be very careful. There's always rhetoric and there's always a big PR push to make them seem like they're reforming when actually perhaps on the ground there's less of that going on in reality.”
2022-07-01 · Masters in Business · Perth Tolle on ETF Freedom Metrics · IDENTIFIED FROM THE TRANSCRIPT · source
“They can drive now, right? I mean, they can't show their face, but in these kinds of markets, in the unfree markets, you have to watch rhetoric versus what actually happens on the ground. A lot of these reforms that MBS put into place, there was a lot of hope in that country for MBS to reform. And we had a lot of”
2022-07-01 · Masters in Business · Perth Tolle on ETF Freedom Metrics · IDENTIFIED FROM THE TRANSCRIPT · source
“So Russia ranks a 6.23 out of 10. As a comparison, Kuwait is 6.34, India is 6.39. And then you get into included countries, Philippines, 6.83, Thailand 6.89, and so forth. These are the kind of borderline countries. India is borderline. Sometimes it's not.”
2022-07-01 · Masters in Business · Perth Tolle on ETF Freedom Metrics · IDENTIFIED FROM THE TRANSCRIPT · source
“So you have to be higher than your peers, and our algorithm assigns positive and negative weights. The negative weights are excluded. So they were low.”
2022-07-01 · Masters in Business · Perth Tolle on ETF Freedom Metrics · IDENTIFIED FROM THE TRANSCRIPT · source
“In charge, but if you have stronger institutions, if you have some checks and balances, Free press that keeps power from getting out of hand.”
2022-07-01 · Masters in Business · Perth Tolle on ETF Freedom Metrics · IDENTIFIED FROM THE TRANSCRIPT · source
“If that had happened in the streets, you can't do that in China. If that happened in China, do you think people could protest that one child policy in China? No. Do you think they could protest when it went to two child? And they're like, why did you make me only have one child? You know, and when it went to three child? No. Nobody could protest that. In fact, you would be prosecuted for protesting. You would be disappeared. So I can't launch a fund like this in Hong Kong. I mean, I would be arrested because of national security law. So the institutions in place are important for pushing back, for checks and balances. It has to be a plurality of political parties. There has to be a system of checks and balances, independent judiciary. There has to be a free media as a force to keep government accountable. And so these are all things that we find in freer markets that we don't see in the less free ones. So you can have a crazy person.”
2022-07-01 · Masters in Business · Perth Tolle on ETF Freedom Metrics · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, I think there's a few differences there. Now, first, I don't know who you're talking about, actually, but I want to say they have a point in that every country has these issues, and it's just different degrees, right? So we may have had it, you know, we have regulations that affect how our companies operate here, Trump or no Trump. There's a certain degree of government interference in private markets everywhere. So it does happen everywhere. We happen to be one of the least worst, I think, in the United States. And in China, yeah, it's very different. One reason is you can't push back against it. So here you see any kind of policy going into place that people don't like, there's a huge amount of pushback.”
2022-07-01 · Masters in Business · Perth Tolle on ETF Freedom Metrics · IDENTIFIED FROM THE TRANSCRIPT · source
“No prospect of getting married or finding a wife. And what do you do when you have no prospect of ever having a family? Join the military. And so that led to a huge military buildup in China as well. And so this is a policy that made me realize, okay, so policies matter. Governance matters. And these types of things have a huge impact on the future of a country and a society and an economy. And so that's actually what led me to start exploring these relationships between freedom and market.”
2022-07-01 · Masters in Business · Perth Tolle on ETF Freedom Metrics · IDENTIFIED FROM THE TRANSCRIPT · source
“She was the second child. And her parents chose to register her brother for existence, basically. So no school records, no hospital records, no No state benefits, so it was basically, you know, everything else, and that's when I realized, wow, that could have been me. She was the exact same as me in every other way. And so that affected me in a profound way. And also this policy affected our generation in a profound way. Not only are there 30 million missing women. There's 30 million men who had”
2022-07-01 · Masters in Business · Perth Tolle on ETF Freedom Metrics · IDENTIFIED FROM THE TRANSCRIPT · source
“More than twice that And this is a heart issue for me because when I went to China, and as I mentioned, I traveled to Shanghai to Beijing. I was 23 at the time and I had a friend in Shanghai. Her name was Maggie. She was the exact same age as me, just like all of my American friends in every way, except she didn't exist on paper. She was one of what's called black. Went to school under a fake surname”
2022-07-01 · Masters in Business · Perth Tolle on ETF Freedom Metrics · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, so the one child policy led to 30 million missing women in China. That's amazing. That's official Chinese think tank estimates. Some others have it as”
2022-07-01 · Masters in Business · Perth Tolle on ETF Freedom Metrics · IDENTIFIED FROM THE TRANSCRIPT · source
“Overseeing that, yes. It does have that feel to it. So this is very scary, actually, for someone who, I mean, I root for China. I want them to succeed. I thought they were going to be much more successful at this point. But the one problem is they're reversing these policies and going back to very unfree, even economically policies. The other problem is the demographics. So, the one child policy.”
2022-07-01 · Masters in Business · Perth Tolle on ETF Freedom Metrics · IDENTIFIED FROM THE TRANSCRIPT · source
“And it's basically a bribe. It's not going to calm prosperity. It's just to keep the government happy. And so every company in China now is required to have a communist cell member as part of their company. All the funds are now required to have communist leader Kind of”
2022-07-01 · Masters in Business · Perth Tolle on ETF Freedom Metrics · IDENTIFIED FROM THE TRANSCRIPT · source
“Exactly. And, you know, just very charismatic and well-loved, well-looked up-to- guy. You know, when he disappeared, I think a lot of people realized, wow, if they could disappear, your founder, you might have some risks there that we didn't account for. And then following that, all the other tech leaders started, CEOs started stepping down or pledging a ton of money for common prosperity, which is one of their new initiatives. And that money came from shareholder pockets.”
2022-07-01 · Masters in Business · Perth Tolle on ETF Freedom Metrics · IDENTIFIED FROM THE TRANSCRIPT · source
“So it all started with Ant Financial when that was scrapped, and then Jack Ma disappeared after he said something that wasn't kosher and criticized, you know, just, you know, it was actually very, I think, benign what he said. But he criticized the government basically the way they handled the financial sector. And here in the United States, we do that every day. Look at us on Twitter. Constantly. Yeah. And so the fact that even that was enough to basically disappear him being a very visible persona in the space.”
2022-07-01 · Masters in Business · Perth Tolle on ETF Freedom Metrics · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, there's Emperor for Life. And yeah, there's no room for any dissent. You saw what happened in Hong Kong, just the idea of any dissent.”
2022-07-01 · Masters in Business · Perth Tolle on ETF Freedom Metrics · IDENTIFIED FROM THE TRANSCRIPT · source
“Think there's a lot of growth editions? That's exactly what you just mentioned. So, you know, the star sectors like tech are now being cracked down on. Xi Jinping has consolidated power and is continuing to. Dictatorship.”
2022-07-01 · Masters in Business · Perth Tolle on ETF Freedom Metrics · IDENTIFIED FROM THE TRANSCRIPT · source
“You know what? It's a bittersweet thing because, yeah, it's good that we didn't have them in there, but it's a terrible thing what's happening because being from China, I want China to succeed. I want them to be free eventually. And a lot of people like myself years ago thought that we were on that trajectory because China increased in their freedom levels a lot in the last couple of decades. You know, they went from abysmal policies under Mao to not so bad policies. They opened up economically. And, you know, had great success there. And their GDP grew tremendously. And that was a very real growth. People lifting themselves up out of poverty and very powerful. Growth story, but now growth story of the past because they are”
2022-07-01 · Masters in Business · Perth Tolle on ETF Freedom Metrics · IDENTIFIED FROM THE TRANSCRIPT · source
“Improvement possibilities. So we don't do that. We take the absolute freedom level at the time of measurement relative to their peers. And there's no, you know, there's no 100% free market and there's no 100% unfree market. It's all a gray zone. And so it's just relative to your peers. You know, when we just take the freest countries, all of these countries have problems. Even the developed markets, even the United States, we're not 100% free here, obviously. All countries have their issues and we just try to pick the ones that have the strongest institutions, best rule of law, best individual and investor protections, private property rights, intellectual. Property rights, things like that, and just make sure we're giving our investors the exposures that are the freest of that universe.”
2022-07-01 · Masters in Business · Perth Tolle on ETF Freedom Metrics · IDENTIFIED FROM THE TRANSCRIPT · source
“We're not trying to predict what countries are going to have the best freedom momentum upwards. We catch it on the downwards, but not upwards because we can't predict the future. If we were to do that, we would have invested in Argentina a few years ago or some of the worst countries because they have the best kind of trajectory, like expected”
2022-07-01 · Masters in Business · Perth Tolle on ETF Freedom Metrics · IDENTIFIED FROM THE TRANSCRIPT · source
“And they said, okay, we're about to like this ultra right wing kind of crazy government, and they're going to have constitutional majority, probably, but it won't show up in the markets for a couple years. And it happened just as he said. Poland was still the best performing market in 2017. In 2018, they fell to number four from number one in our index. And they've stayed basically in the middle since. But now, you know, they're taking a lot of steps to support Ukraine in their stand for freedom. So I'm glad they're in there. I'm glad they're one of the top four. But they did show that decline, but not until a few years after that government came into power. Because what happens is our data providers, they look at what's actually happening on the ground. They don't just look at, okay, what do we expect to happen? They're not trying to predict the future.”
2022-07-01 · Masters in Business · Perth Tolle on ETF Freedom Metrics · IDENTIFIED FROM THE TRANSCRIPT · source
“And the reason, and part of that is, yeah, there is a lag in there, but we found that these types of political changes do take time to show up in markets. So it doesn't happen immediately. If you notice elections are very often mispriced for this reason, it takes a couple years for these things to show up. I do the freedom meetings with our econometricians at the think tanks every year. And one year I was there with the Polish... Delegate from the Polish think tank that works with our freedom guys. And this was right before the PIS government got into power, if you'll recall.”
2022-07-01 · Masters in Business · Perth Tolle on ETF Freedom Metrics · IDENTIFIED FROM THE TRANSCRIPT · source
“And then we leave it until the next year. If something happens in between, we don't respond to it immediately. We have to wait till rebalance. There is a rule that if a country falls more than five points on one of our scales, that we do kick it out, even if it's already in the index, but we do that at rebalance time. So basically it's a freedom decline momentum rule. The reason why we do that is we found that freedom, when it increases, it does so gradually. And when it decreases, it does so very quickly. And so we don't want to be catching that falling knife, so to speak. The only country that's ever triggered that it was Turkey. And that's before the ETF existed. It was when it was just the index, and that was in 2018 rebalance. And it was because they fell more than five points on the previous year's scales. And they'd never made it back into the index since.”
2022-07-01 · Masters in Business · Perth Tolle on ETF Freedom Metrics · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, so we rebalance once a year because the human rights data comes out once a year. So the personal and economic freedom data. And it comes out around the end of the year. So we rebalance the third Friday in January.”
2022-07-01 · Masters in Business · Perth Tolle on ETF Freedom Metrics · IDENTIFIED FROM THE TRANSCRIPT · source
“Well, in addition to that, in emerging markets, we actually give you access to local shares on local exchanges. So we pay the custody costs of giving you that access to give you that market exposure. And that's one of the things I'm very proud of and very proud to pay on behalf of my clients. So that's even more expensive for emerging markets. Sure. So we had to raise funds for that. And I ended up, you know, as you know, working with ETF architect prior, they were called alpha architect at the time and being their first white label client.”
2022-07-01 · Masters in Business · Perth Tolle on ETF Freedom Metrics · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, so my initial plan after I had the index, and this is when I met him and you at Camp Kotok, and there wasn't a fund yet, was to license the index to iShares or Vanguard or someone. I talked to iShares. They didn't want it. I talked to everyone and no one wanted it. So eventually I just had to launch it on my own. And that's when I said, okay, I'll need to raise funds because the operating costs for an ETI are. Yeah, no, it's not.”
2022-07-01 · Masters in Business · Perth Tolle on ETF Freedom Metrics · IDENTIFIED FROM THE TRANSCRIPT · source
“That too. So after Camp, he committed to being the first investor at the time non existent fund. And then a while later is when I found out I would have to launch the fund myself instead of just, you know, licensing the index. And that's when he became a GP, an LP investor.”
2022-07-01 · Masters in Business · Perth Tolle on ETF Freedom Metrics · IDENTIFIED FROM THE TRANSCRIPT · source
“Yes, we flew in on the seaplane because I called the seaplane company the day I was coming in. And I was like, I'm coming in from Laguardia today. Is it too late to get a seaplane? And they said, no, you can share with Rob or Not. Here's his flight number. Just go intercept him at the airport. And I did. Just like that. Yeah. I was like, hey, did they tell you we were going to be riding together? And that's how we met. He heard the idea. Wait, I touched him.”
2022-07-01 · Masters in Business · Perth Tolle on ETF Freedom Metrics · IDENTIFIED FROM THE TRANSCRIPT · source
“And he had to pay that bet. He doesn't go every year. You notice he hasn't been back since. And before that, he was there maybe five to seven years prior.”
2022-07-01 · Masters in Business · Perth Tolle on ETF Freedom Metrics · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, it was Christian Magoon at Amplify who said Barry Ridholz goes to that camp, you should go and you can meet Barry. And so you are partly responsible for me going that year. That's very funny. In more than one reason, and you're also responsible for Rob going that year because he lost the bet to you.”
2022-07-01 · Masters in Business · Perth Tolle on ETF Freedom Metrics · IDENTIFIED FROM THE TRANSCRIPT · source
“To Kotalk. That's exactly right. I do remember that. So when I left Fidelity and I started doing this very slowly, I called research affiliates and I was like, hey, you know, you guys do non-cap weighted indexing. We want to do non-cap weighted indexing.”
2022-07-01 · Masters in Business · Perth Tolle on ETF Freedom Metrics · IDENTIFIED FROM THE TRANSCRIPT · source
“You know what? You always say that, but on your podcast, I'm going to say I met him on the seaplane. That's right, flying into flying.”
2022-07-01 · Masters in Business · Perth Tolle on ETF Freedom Metrics · IDENTIFIED FROM THE TRANSCRIPT · source
“Exactly. Yeah, I mean, I think we were set up well just because freedom waiting obviously is the reason why we didn't have any China or any Russia. And that helped us tremendously in our investors to avoid that risk.”
2022-07-01 · Masters in Business · Perth Tolle on ETF Freedom Metrics · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, and we all know how hard it is to get five-star Morningstar rating. And so for us to have that right out of the gate, I'm very grateful for that. And I don't take much credit because a lot of that is stuff out of my control. You know, we can't control the market.”
2022-07-01 · Masters in Business · Perth Tolle on ETF Freedom Metrics · IDENTIFIED FROM THE TRANSCRIPT · source
“For it, right? No, it just happens. And at three years, 36 full months, and it's based on performance. So I guess it wasn't that much of a surprise. But, you know, what I really appreciate about that is that I didn't expect this strategy to play out the thesis, to play out this well this quickly. And for it to have done that in this exact three-year period of time when the morning stars come out, just all the stars had to align for that to happen. No pun intended.”
2022-07-01 · Masters in Business · Perth Tolle on ETF Freedom Metrics · IDENTIFIED FROM THE TRANSCRIPT · source
“Up later, but since Yeah, no, and you know what? Morningstar ratings come and go. And that was a surprise to me because, well, I guess it wasn't a surprise. It's not like”
2022-07-01 · Masters in Business · Perth Tolle on ETF Freedom Metrics · IDENTIFIED FROM THE TRANSCRIPT · source
“So, right now, we have about 200 million under assets. And so it's just beginning to be big enough to get noticed by institutions. We're getting more institutional requests at this time. We just had a family office demand that we get approved on Morgan Stanley and they just approved us. Oh, that's great. So we've been approved on a lot more platforms lately because of the size and also the three-year track record and the five-star Morningstar rating.”
2022-07-01 · Masters in Business · Perth Tolle on ETF Freedom Metrics · IDENTIFIED FROM THE TRANSCRIPT · source
“Inefficient. I mean, the trading at the end of the day is not as big of a problem because most of our investors are long term, but that tax efficiency is just so hard to beat in any other type of vehicle.”
2022-07-01 · Masters in Business · Perth Tolle on ETF Freedom Metrics · IDENTIFIED FROM THE TRANSCRIPT · source
“Yes Yeah, so once I came back from Hong Kong, I worked at Fidelity Investments in the LA and Houston markets. And I was at Fidelity for about 10 years as a financial advisor. And that's when I started noticing the trend of the rise of indexing and the rise of ETFs and how beneficial the ETF structure was for clients. I don't know of any other investment vehicle or structure that is as beneficial tax-wise for clients. And so, and tradability and everything. So I was always a fan of the ETS structure. And when I created this, I always intended for it to be an ETF. We created the index before there was an ETF, but I always intended, you know, it was always designed to be an ETF.”
2022-07-01 · Masters in Business · Perth Tolle on ETF Freedom Metrics · IDENTIFIED FROM THE TRANSCRIPT · source
“Yes, and again, we don't arbitrarily exclude China or Russia. We didn't have them in there any of this time because of the, it's a natural result of that freedom waiting. So freedom waiting in this case works very well and it was a very effective leading indicator of some of these tail risks that investors in these cap-weighted indexes experienced.”
2022-07-01 · Masters in Business · Perth Tolle on ETF Freedom Metrics · IDENTIFIED FROM THE TRANSCRIPT · source
“Yes. So currently, there's 11 countries, and there's 110 securities in the ETF. In the previous two years, there have been 100 securities in 10 countries. And that's why it was called the Freedom 100.”
2022-07-01 · Masters in Business · Perth Tolle on ETF Freedom Metrics · IDENTIFIED FROM THE TRANSCRIPT · source
“Yep. So we take the top 10 largest, most liquid companies in each country that is not a state-owned enterprise. And that's the only thing that we do on the security level. So we're just taking the largest, most liquid companies that are non-state owned. And the reason why we didn't add any additional factors to that, obviously, our work with a lot of factor people. And the reason why we didn't add factors to that is because we wanted to isolate the freedom factor for this product. It's our first ETF. It's the first emerging markets ETF in the world that uses freedom waiting. And so we wanted to see if there was a market for this type of product and see how it would go. And we're very happy with the results.”
2022-07-01 · Masters in Business · Perth Tolle on ETF Freedom Metrics · IDENTIFIED FROM THE TRANSCRIPT · source
“So, most important part once we have those 18, we do freedom weight, those 18 countries, as part of that process, the worst offenders are excluded, so the lowest scores are excluded out in this process. And the best of those 18, and typically it's between 10 and 11 countries are included in the index. And that is a completely objective process. That's rules-based. you know, my subjective opinion doesn't factor into that at all.”
2022-07-01 · Masters in Business · Perth Tolle on ETF Freedom Metrics · IDENTIFIED FROM THE TRANSCRIPT · source
“Like China, Russia, Saudi Arabia, Turkey, Egypt, and so forth. So by freedom waiting instead of market cap waiting, we're seeking to solve that problem of these autocracy heavy concentrations in the emerging market space. And so we created this for people who want to have that exposure to emerging markets, people who always have either a strategic allocation or just always want that emerging markets exposure. But without funding autocracies. So there's no, we've never had any China, Russia, Saudi Arabia, Turkey, and so forth.”
2022-07-01 · Masters in Business · Perth Tolle on ETF Freedom Metrics · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, so we want to keep it very liquid and very tradable. So once we have those countries eliminated, then we have about 18 countries left in the eligible universe. And these are the countries on which we apply the freedom weights. It's 100% freedom weighted. It's not a... It's not a tilt and it's not in an overlay. And the reason why we do that is because with market capitalization weighting, which is the standard for most indexes, including emerging markets, You end up with a lot of autocracies with this universe. So the emerging markets universe is filled with autocracies and countries just coming out of autocracy.”
2022-07-01 · Masters in Business · Perth Tolle on ETF Freedom Metrics · IDENTIFIED FROM THE TRANSCRIPT · source
“Yes. But mostly we're looking at the market cap of the country here as a ratio to world market cap. If you don't meet our minimum ratio, then you're out even if you're very free. So this actually eliminates very free markets like Czech Republic, which is too small. Peru, which is not liquid enough. And it also eliminates some very unfree markets like Egypt because of size. So once we have those eliminations based on market cap ratios,”
2022-07-01 · Masters in Business · Perth Tolle on ETF Freedom Metrics · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, so let me just run down the whole process just quickly for you here. So, first, we had those 27 countries, and currently we're using the same country set as MSEI because most of our clients do benchmark to MSE. Now, we're not bound by that, though. So in the future, we may add or subtract certain countries from that. Universe right now is the same as MSEI. First, after we have that universe, we look at which countries are actually big enough and tradable enough to be in an ETF because this was always designed to be an ETF.”
2022-07-01 · Masters in Business · Perth Tolle on ETF Freedom Metrics · IDENTIFIED FROM THE TRANSCRIPT · source