E23. STACKED UNPACKED: Trend, Carry, and a Narrative-Busting Quarter

Adam Butler: 00:00:00

I go back to the dot com bubble, when dot com rolled over in

2

: 00:00:04

mid 2000, it was long energies, long

metals that carried the portfolio

3

: 00:00:11

for the next five, six years.

4

: 00:00:13

It's not the ability to short

equities that that often gives you

5

: 00:00:17

that equity bear market offset.

6

: 00:00:19

It's the ability to be long other markets.

7

: 00:01:41

Corey Hoffstein: Hello everyone.

8

: 00:01:42

Welcome to the Q1 2026 Stacked Unpacked.

9

: 00:01:47

My name is Corey Hoffstein, CEO of

Newfound Research and co-founder

10

: 00:01:51

of the Return Stacked ETF suite.

11

: 00:01:54

And it is my absolute pleasure to

be joined my by my good friend and

12

: 00:01:57

colleague, Adam Butler, CIO of ReSolve

Asset Management and fellow co-founder

13

: 00:02:03

of the Return Stacked ETF suite.

14

: 00:02:06

Adam, great to be joined

by you this quarter.

15

: 00:02:08

Excited to dive into the performance and

drivers of returns and our different ETFs.

16

: 00:02:14

I think this is, uh, man, what

a difference a quarter makes.

17

: 00:02:17

Right.

18

: 00:02:18

Adam Butler: Yeah.

19

: 00:02:18

Absolutely.

20

: 00:02:19

welcome everyone.

21

: 00:02:20

It's, uh, great to get a chance

to nerd out Corey and, nice to

22

: 00:02:25

continue to deliver good news all.

23

: 00:02:27

Corey Hoffstein: And before we

dive right in, just a reminder

24

: 00:02:29

that you can submit comments.

25

: 00:02:31

We will try to address

them in a timely manner.

26

: 00:02:33

If there's something we can

address in real time, we will.

27

: 00:02:36

Otherwise, we'll hold comments

and questions until the end.

28

: 00:02:40

without further ado,

I'm gonna dive right in.

29

: 00:02:42

This is meant to be a

recap of what we saw in Q1.

30

: 00:02:46

This is, this commentary is

available at returnstackedETFs.com.

31

: 00:02:49

If you want to go through it yourself,

we're gonna try to hit all the

32

: 00:02:52

highlights and maybe discuss sort of

what we're seeing in the important

33

: 00:02:56

charts and graphs that we put in here.

34

: 00:02:58

very excited to finish the

quarter at just under 1.2

35

: 00:03:01

billion.

36

: 00:03:02

Uh, excited to say today

we opened the day with 1.3

37

: 00:03:05

billion, so we continue to see

really strong growth in the suite.

38

: 00:03:09

We're incredibly grateful for everyone

who has allocated either their own

39

: 00:03:13

money or allocated money on behalf

of their clients into these products.

40

: 00:03:18

Obviously, this is something

that we believe very strongly in.

41

: 00:03:21

This is a, a new tool set that we think

really helps people rethink portfolio

42

: 00:03:28

construction and we're really enthused

to see the adoption within the industry.

43

: 00:03:33

So thank you very much.

44

: 00:03:34

We're incredibly grateful and, and we look

forward to, dare I say, the next billion.

45

: 00:03:39

I'm gonna dive right in.

46

: 00:03:40

We're gonna hit these ETFs one by one.

47

: 00:03:42

Some of these we're gonna spend

a little bit more time on.

48

: 00:03:45

the first I wanna start off with

is probably our simplest and yet

49

: 00:03:49

the most flexible ETF we offer.

50

: 00:03:51

This is the return stack global

stocks and bonds ETF RSSB.

51

: 00:03:56

RSSB provides a dollar of global

equity and a dollar of US treasury

52

: 00:04:03

exposure for every dollar invested.

53

: 00:04:06

The idea here isn't so much that you would

use this ETF to try to stack bonds on your

54

: 00:04:13

existing stock bond portfolio, but rather

use it as a capital efficiency tool.

55

: 00:04:18

So, as a really simple example, if you

were to say have 60% stocks, 40% bonds.

56

: 00:04:24

You could sell 10% of your stocks

and 10% of your bonds and put 10% of

57

: 00:04:28

that freed up capital into RSSB, that

10% in RSSB would've give you the

58

: 00:04:32

effective exposure of the 10% stocks

and the 10% bonds that is missing.

59

: 00:04:37

But now you'd have 10% freed

up sitting in cash with which

60

: 00:04:41

you can do whatever you want.

61

: 00:04:43

And when you allocate that

freed up cash to some other

62

: 00:04:46

investment, it is effectively

stacked on top of your portfolio.

63

: 00:04:50

So we like to think of RSSB

as our low cost Swiss army

64

: 00:04:54

knife of capital efficiency.

65

: 00:04:56

And the goal here is simply to track

as closely as possible a 100 100

66

: 00:05:02

portfolio comprised of a hundred percent

passive global equities, plus a hundred

67

: 00:05:07

percent of a US treasury benchmark.

68

: 00:05:10

in figure one, you can see here

over the prior 12 months, the black

69

: 00:05:13

line is that total index benchmark

and then the green line is both.

70

: 00:05:18

We have a version of RSSB

price and RSSB nav and we can

71

: 00:05:22

see we tracked quite closely.

72

: 00:05:24

If we zoom out to just look at

summary statistics really quickly.

73

: 00:05:26

Again, the goal here is not to

be prescriptive about returns,

74

: 00:05:29

but rather to use this as a tool.

75

: 00:05:32

The idea would be to have the sense

inception returns, track that a hundred

76

: 00:05:37

hundred as closely as possible after fees.

77

: 00:05:39

I believe we are almost perfectly 35

bips behind the 100 100 cents inception,

78

: 00:05:46

which is where we would like to be.

79

: 00:05:48

So we are, uh, very enthused again about

our ability to track our benchmark.

80

: 00:05:53

Our stated objective here and

RSSB is our largest ETF creeping

81

: 00:05:58

up on almost 500 million.

82

: 00:06:00

I think simply because of this

flexibility, it is our simplest ETF to

83

: 00:06:04

understand and frankly, it has the most

flexibility in what you can do with it

84

: 00:06:08

and things you can stack and creative

things you can do in your portfolio.

85

: 00:06:11

And so it's no surprise that this

is our most popular ETF to date.

86

: 00:06:16

Adam Butler: I mean, I don't think

we should, be too prescriptive

87

: 00:06:18

here, but like, I, I think it's

worth visiting a couple of potential

88

: 00:06:22

popular use cases for this, right?

89

: 00:06:23

I mean, obviously the return stack suite,

we don't cover all potential diversifiers.

90

: 00:06:29

Also, advisors have special relationships

and, and, and styles and strategies

91

: 00:06:33

and managers that they like.

92

: 00:06:34

So the idea is you can trim back,

let's say if you sell down 20% of

93

: 00:06:39

your, 50 50 stock bond portfolio,

you put 10% back into RSSB.

94

: 00:06:46

Now you've, you, you're right back up

to your full exposure to your 50 50

95

: 00:06:51

portfolio, but you've also got 10% free

to add your favorite manager or, uh,

96

: 00:06:57

you know, maybe your client's got a

purchase that they're trying to fund.

97

: 00:07:00

They can, they can extract those

funds and go and deploy them,

98

: 00:07:03

to some sort of purchase, right?

99

: 00:07:05

So just a couple of, of really simple

and and popular use cases for this kind

100

: 00:07:10

of Swiss, Swiss Army knife product.

101

: 00:07:12

Corey Hoffstein: Yeah.

102

: 00:07:12

I would say where we see it most

frequently can is when, when.

103

: 00:07:16

An allocator that we're working with

already has a suite of alternative

104

: 00:07:20

funds that they've vetted, right?

105

: 00:07:21

Their team has already

done the due diligence.

106

: 00:07:23

They might have three or

four alternative funds.

107

: 00:07:26

Maybe they have an alternative model

that they're comfortable with, and rather

108

: 00:07:30

than doing diligence on our alternatives,

and I would put our alternatives toe

109

: 00:07:35

to toe with anyone else's, of course.

110

: 00:07:37

But instead of if, if they already have a

suite of alternatives they're comfortable

111

: 00:07:41

with and yet wanna figure out how to stack

those alternatives, RSSB is the solution.

112

: 00:07:46

It gives them the ability to take

those alternatives that they're

113

: 00:07:48

already comfortable with and, and use

them in a return stacking framework.

114

: 00:07:53

So let's now move on and talk about

some of the alternatives we offer.

115

: 00:07:55

And again, one of the most

popular is our trend line.

116

: 00:08:00

We have the Return Stack Bonds and Managed

Futures ETF just hit its three year

117

: 00:08:05

anniversary in, February, early February.

118

: 00:08:09

And as well as our Return Stacked

US Stocks and Managed Futures ETF,

119

: 00:08:13

which will be hitting its three

year anniversary, uh, in September.

120

: 00:08:17

Now, these two funds, every dollar

you give them based on their name,

121

: 00:08:21

they'll either give you a dollar

of bonds or a dollar of US stocks,

122

: 00:08:24

plus a dollar of a managed futures

trend following strategy on top.

123

: 00:08:29

Now, our approach to this trend following

strategy is a replication based approach.

124

: 00:08:35

We are trying to hit what we would

call sort of the category average of

125

: 00:08:39

systematic trend following managers.

126

: 00:08:41

So if you were to look at something

like, say the SocGen Trend Index

127

: 00:08:45

or the Morningstar systematic

trend category, that is the type

128

: 00:08:49

of return we're trying to generate.

129

: 00:08:51

We are trying to provide effectively the

beta of the managed futures category.

130

: 00:08:58

And there's two ways we do this.

131

: 00:08:59

We use what's called a top down approach,

where we're effectively looking at

132

: 00:09:02

prior returns and trying to figure out

what sort of portfolio configuration

133

: 00:09:07

would've led to those returns.

134

: 00:09:09

And then there's the bottom up

approach where we're actually running

135

: 00:09:12

a trend following process and all the

parameterization of that process about

136

: 00:09:16

trend speeds and which markets we trade

in, all that sort of stuff, and how much

137

: 00:09:20

weight we give each market in each sector

is determined to try to fit the long-term

138

: 00:09:25

return characteristics of the category.

139

: 00:09:27

And then we blend those two approaches.

140

: 00:09:30

What we're really enthused to see,

and this is unique in this quarter's

141

: 00:09:34

commentary, is looking at the

three years of live track record we

142

: 00:09:38

now have doing this in our funds.

143

: 00:09:41

and what what we're very happy about

is the original thesis we had, which

144

: 00:09:47

was each of these different replication

approaches has efficacy as on a standalone

145

: 00:09:53

basis, but process diversification

should lead us to a place of a better

146

: 00:09:58

result and a better fit absolutely

came out in the realized numbers.

147

: 00:10:03

So we run three approaches, two

top-down approaches, one with a smaller

148

: 00:10:07

universe, one with a larger universe.

149

: 00:10:08

We also run the bottom up approach,

and when we look at their correlation

150

: 00:10:13

to say the SocGen Trend Index or their

individual tracking error to the SocGen

151

: 00:10:16

Trend Index, we see substantially higher

numbers than a blended approach that

152

: 00:10:21

takes the target weight results of,

of all three and blends them together.

153

: 00:10:26

When we look at the actual three year

results here, what we have in the black

154

: 00:10:31

line over the last three plus years is the

SocGen trend index and the green line is

155

: 00:10:37

the blended net approach that we apply.

156

: 00:10:40

And then we can see the individual

gray lines actually represent the

157

: 00:10:43

individual replication models.

158

: 00:10:46

And we can see at any given time some

models are performing better than others.

159

: 00:10:50

The top down small performed

best over this full period, but

160

: 00:10:52

there were certainly sub periods.

161

: 00:10:54

It was the worst performer.

162

: 00:10:55

It arguably had one of the worst fits,

even though it was the best performer.

163

: 00:11:00

But we can see the blended result

ended up almost perfectly at the

164

: 00:11:04

end of the day at the same point

with a high degree of correlation.

165

: 00:11:08

So this is something that, you

know, again, three years isn't

166

: 00:11:12

the end all, be all of of time

periods to measure something over.

167

: 00:11:16

But given the volatility we saw in the

trends category over the period, given

168

: 00:11:21

the dispersion among managers that we saw

as well, uh, you know, we're very, very

169

: 00:11:26

happy and pleased with this result in

trying to deliver trend beta, and I think

170

: 00:11:30

we delivered upon that mandate quite well.

171

: 00:11:33

Adam Butler: I think it's worth mentioning

that, you know, three years is not

172

: 00:11:36

nearly enough time to determine whether

a strategy can can generate alpha, but it

173

: 00:11:41

is a very substantial time to determine

whether something delivers a beta.

174

: 00:11:45

And you know, I think, I think we've

done some internal analysis and we've

175

: 00:11:49

also sort of examined it against the

historical modeling that we did, right?

176

: 00:11:54

'cause we can go back several decades

to see how well this combination

177

: 00:11:59

approach has worked in the past.

178

: 00:12:02

To track the SG trend index or you know,

a variety of other index, uh, indices.

179

: 00:12:07

And so we had a lot, had a fair

amount of confidence going in.

180

: 00:12:11

First of all, that the model

was theoretically sound.

181

: 00:12:14

We'd also validated it on several decades

of historical context and is really,

182

: 00:12:20

you know, fulfilling to see this in,

in three years out a sample delivering

183

: 00:12:24

effectively the same tracking error

and, and correlation that we observed in

184

: 00:12:30

sample during testing and modeling stages.

185

: 00:12:33

Right?

186

: 00:12:33

So, you know, it's a really nice

validation over three years and, you know,

187

: 00:12:36

I continue to come back to a question

of why managers are taking benchmark

188

: 00:12:42

risk with, you know, trying to select

individual managers in this space when low

189

: 00:12:46

cost beta alternatives with the specific

objective of minimizing that tracking

190

: 00:12:52

error to the benchmark, are available

in these kinds of liquid packages.

191

: 00:12:57

Corey Hoffstein: Yeah, I, one of the

figures that I love and, and we put

192

: 00:13:00

this in every commentary, and though

it's usually on a quarterly basis, but

193

: 00:13:03

this shows the full three years, is the

relative performance of each approach

194

: 00:13:08

as well as the blended approach versus

that SocGen trend index benchmark.

195

: 00:13:12

So you can think of it sort of as

taking the green and gray lines here

196

: 00:13:17

and dividing it by the black line.

197

: 00:13:18

And so when the line is going down,

it's underperforming SocGen trend.

198

: 00:13:22

When it's going up, it's

outperforming perfect replication

199

: 00:13:25

would be a, a flat horizontal line.

200

: 00:13:26

And one of the things right,

I think we can see is that.

201

: 00:13:30

The individual gray lines, while they have

a degree of correlation to each other,

202

: 00:13:34

there are certainly periods where they zig

and zag in their own idiosyncratic way.

203

: 00:13:39

And I think that's really clear, for

example, over the last year with, with

204

: 00:13:43

what I, the top down small, which is

the top line there where you can see

205

: 00:13:48

a huge pop during the tariff tantrum

period, as I like to call it, last April.

206

: 00:13:54

This was massive outperformance, I

would argue, and as, and we wrote in

207

: 00:14:00

the commentary for that quarter, like

this was not skill, this was luck.

208

: 00:14:04

This was this, this being misallocate,

not tracking the index, but getting

209

: 00:14:09

lucky in not tracking the index and

then subsequently bled most of that

210

: 00:14:13

performance back very different than

say the what, the top down large, or, or

211

: 00:14:20

the, uh, bottom up did over that period.

212

: 00:14:22

And so in terms of just trying to

track closely to the category, again,

213

: 00:14:27

the blend allows us to average out

all that idiosyncratic noise or, or

214

: 00:14:31

a high degree of that idiosyncratic

noise to try to get closer to target.

215

: 00:14:35

uh, and I think the last three years

have been a great case study of that.

216

: 00:14:37

So we, we look forward and hopefully

over the next, you know, two years, we'll

217

: 00:14:41

we'll do a five year retrospective and

then a 10 year, and hopefully we'll,

218

: 00:14:44

we'll continue to see strong results.

219

: 00:14:47

um, co goes directly to Q1 and I'll,

I'll go through this quickly, trend

220

: 00:14:51

posted another positive quarter after

a couple of frustrating years, trends

221

: 00:14:55

returned over the last, call it, 12

months have been, uh, much, much better,

222

: 00:14:59

particularly from the bottoms of April.

223

: 00:15:01

It's had a very strong performance

driven not just by equities, but

224

: 00:15:05

driven by exposure to metals.

225

: 00:15:07

More recently, some exposure to energies.

226

: 00:15:09

So it's been, it's been, a good time

over the last, call it 10 months to have

227

: 00:15:15

trend as an overlay in the portfolio.

228

: 00:15:18

Uh, again, this we can

see in, in figure four.

229

: 00:15:21

The green line is our model

approach to replicating the category

230

: 00:15:26

black as the SocGen trend index.

231

: 00:15:28

High degree of correlation,

good degree of fit.

232

: 00:15:30

Point to point, this is

exactly what we're looking for.

233

: 00:15:33

And again, this is, these are the type

of results we're trying to deliver,

234

: 00:15:36

uh, in actually providing exposure

to this category as an overlay.

235

: 00:15:42

We can see, again, using that relative

performance, it's never a perfect fit.

236

: 00:15:47

But what we're ultimately hoping for

is that blended approach is certainly a

237

: 00:15:50

better fit over the full period than any

of the individual approaches, which again,

238

: 00:15:53

I think we see here from a positioning

and return contribution perspective in

239

: 00:16:00

Q1, what we, what we've seen is that

we entered with something like fixed

240

: 00:16:05

income, positive weights, transition

to negative weights over the quarter.

241

: 00:16:08

equities, we substantially

reduced weights over the quarter.

242

: 00:16:12

We saw a pickup in exposure to

energies, somewhat of a pullback in an

243

: 00:16:18

exposure to metals, and sort of mixed

change in what we saw in currencies.

244

: 00:16:23

One of the things I want to remind people

of here is that, lemme make sure I can

245

: 00:16:29

do this correctly, is that, we actually

have all of this live on our website.

246

: 00:16:36

So if you go to our return stacked ETFs

dot com and go to, let's say the RSST

247

: 00:16:43

ETF page every single day not only can

you download the notional weights of what

248

: 00:16:50

we're holding, this is true for every ETF,

but to make it easier to interpret what's

249

: 00:16:56

in actually in the driver's seat, we

show the actual risk allocations by asset

250

: 00:17:01

class as well as market that we trade.

251

: 00:17:05

So as of yesterday, we can

see that equities capture

252

: 00:17:11

about 32% of our current risk.

253

: 00:17:13

In the managed futures program,

energies are about 25%.

254

: 00:17:17

Metals are only about eight and a half.

255

: 00:17:19

Currencies are are just about

nothing, and bonds are negative 10%.

256

: 00:17:23

This is something that gets

updated every single day.

257

: 00:17:26

So if you are curious about how the

strategy is positioned and what's actually

258

: 00:17:32

in the driver's seat, I think this is a

great way to look at it intra quarter.

259

: 00:17:37

And what's important here is that these

are, again, risk adjusted weights.

260

: 00:17:41

When you look at the notional weights,

how much we actually have allocated This

261

: 00:17:45

can be a little bit misleading 'cause a

low volatility market, we might have to

262

: 00:17:49

have a really big position in to have it

have an impact versus a high volatility

263

: 00:17:54

market like say oil right now we might

have a very small position in, and that

264

: 00:17:58

small position in something like oil might

have the same risk as a large position in

265

: 00:18:02

something like five year US treasuries.

266

: 00:18:06

We do all the work of translating that to

put 'em on an equal basis when we, when

267

: 00:18:10

we do this risk weighting on the website.

268

: 00:18:12

So again, for anyone looking to

see what's happening on a live

269

: 00:18:14

basis, I highly recommend taking

a look at, at the actual website.

270

: 00:18:19

So now going back to the commentary, lemme

just make sure that goes up on the page.

271

: 00:18:27

There

272

: 00:18:27

we

273

: 00:18:27

Adam Butler: gonna start

talking about Carry now, or

274

: 00:18:29

Corey Hoffstein: Yeah.

275

: 00:18:29

We're gonna quickly jump to Carry.

276

: 00:18:31

There's, again, look,

keeping our eye on the time.

277

: 00:18:33

one of the things I do want to point

out though is just from a contributions

278

: 00:18:37

perspective, I think there was a

lot of people who expected that

279

: 00:18:41

equities were sort of the big driver

in over the last, call it 12 months.

280

: 00:18:46

that actually really wasn't the case.

281

: 00:18:47

We can see that over the last year,

metals were a really big driver.

282

: 00:18:51

Energy was a positive driver.

283

: 00:18:52

Yes, equities were a driver, but this

is once again the, the breadth of, the

284

: 00:18:57

markets we trade in the trend program.

285

: 00:18:59

There were a significant number of

contributors over the year and, and

286

: 00:19:02

that's why the breadth is important.

287

: 00:19:04

Uh, Adam, I wanna pause really quickly.

288

: 00:19:05

There was a question here about

the possibility of the investment

289

: 00:19:08

universe expanding into more markets.

290

: 00:19:11

Um, this is something we have looked into.

291

: 00:19:14

There's, there's sort of two answers here.

292

: 00:19:16

One, we need to make sure the impact

it has on the goodness of fit.

293

: 00:19:21

Um, there's a lot of research that

shows that when you are trying to

294

: 00:19:24

track the sort of beta of trend, you

actually don't need that many markets.

295

: 00:19:28

And as you add more and more markets,

it actually complicates the math problem

296

: 00:19:33

of trying to track the benchmark.

297

: 00:19:36

That said, there might be one or two key

markets that we might look to introduce.

298

: 00:19:41

Um, not anytime in the short

future, but it's something we've

299

: 00:19:43

been, we have been exploring.

300

: 00:19:44

And if we can get comfortable with it,

you might see one or two new markets come

301

: 00:19:49

in that we do think would improve the

goodness of fit, uh, to, to the category.

302

: 00:19:53

Adam, anything you wanna add there?

303

: 00:19:54

Adam Butler: Yeah.

304

: 00:19:54

The, the other quick thing is

that, you know, the benchmarks we

305

: 00:19:58

track, it, these are the, these

are very, very large managers.

306

: 00:20:01

The largest managers in

the world, typically.

307

: 00:20:03

In fact, definitionally, they are in this

OC gen trend index and large managers

308

: 00:20:08

are sort of definitionally restricted

to allocating a majority of their risk

309

: 00:20:14

to the most liquid markets, right?

310

: 00:20:17

So if we were to, to, to go too far

out the tail in, into more esoteric

311

: 00:20:23

markets or less liquid markets, what

we're doing is now adding a bunch of

312

: 00:20:27

markets that most of the managers that

are in the index that we track can't

313

: 00:20:33

actually allocate a lot of risk to.

314

: 00:20:34

So we're adding markets that they're

not trading in very large size.

315

: 00:20:39

And, and that also complicate

the math of, of tracking.

316

: 00:20:43

So there's definitely

a, a, a balance here.

317

: 00:20:45

I think we're pretty close to, to

the right balance, but we're always,

318

: 00:20:49

you know, reevaluating whether we're

missing something or whether there's

319

: 00:20:53

opportunities for improvement.

320

: 00:20:54

And we'll change it as

we go, as that warrants.

321

: 00:20:58

Corey Hoffstein: Yeah.

322

: 00:20:58

One of the questions here, and

then I wanna get to Carry is,

323

: 00:21:00

um, someone's surprised that we

still have a position in gold.

324

: 00:21:03

So gold is down quite a bit from the high.

325

: 00:21:05

Why?

326

: 00:21:06

Why do we still have a long position?

327

: 00:21:08

you know, look, gold's from the highs

is down about 15%, give or take.

328

: 00:21:14

But if we zoom out over a nine month

period, you know, go back to last

329

: 00:21:20

summer, late last summer, September,

it's still up about 45%, right?

330

: 00:21:26

And so when we talk about trend following.

331

: 00:21:30

and, and the type of trends

that these managers trade.

332

: 00:21:34

Intermediate trend is sort of

where things tend to fall out.

333

: 00:21:39

So the long intermediate to

long trend is still intact.

334

: 00:21:43

Now that said, our risk adjusted

weight in gold has come way down.

335

: 00:21:47

I think it's down over 50% from its high.

336

: 00:21:50

So we have seen, you know, some

of the shorter term trends that we

337

: 00:21:53

trade and just volatility adjusting.

338

: 00:21:56

Position wise, it has come way

down as all exploded as gold,

339

: 00:22:00

uh, rallied so dramatically.

340

: 00:22:02

But if you zoom out to more of a nine to

12 month trend, uh, I think most people

341

: 00:22:07

would agree that the trend remains intact.

342

: 00:22:09

And so it's no surprise in my opinion that

the model still has some gold exposure.

343

: 00:22:15

Adam Butler: Yep.

344

: 00:22:15

Nothing to add there.

345

: 00:22:16

Absolutely.

346

: 00:22:17

Corey Hoffstein: All right,

let's move on to Carry.

347

: 00:22:19

This is, um.

348

: 00:22:21

You know there, there's a lot to

digest here 'cause this is one we've

349

: 00:22:23

been writing a lot about, trying

to build intuition for people as to

350

: 00:22:27

what Carry is, with lots of examples.

351

: 00:22:29

It's frankly been a bit of a

frustrating run, but this was

352

: 00:22:33

a heck of a quarter for Carry.

353

: 00:22:35

Adam Butler: It has been.

354

: 00:22:36

And you know, the, the challenge with

carry is that you, you get caught on,

355

: 00:22:40

a, a bunch of false starts, right?

356

: 00:22:41

So Q4, 2025 was a really good

example of, we had a couple of

357

: 00:22:46

conflicts that were initiated, right?

358

: 00:22:49

We had these geopolitical events.

359

: 00:22:52

markets reacted, they got fearful,

they repriced the, the energy complex

360

: 00:22:57

and, and other market segments, right?

361

: 00:22:59

But the conflicts petered

out pretty rapidly, right?

362

: 00:23:02

The, the Venezuelan conflict

petered out almost immediately.

363

: 00:23:06

The Iran, war lasted just a few days.

364

: 00:23:09

So, you know, we, we

had this, these sort of.

365

: 00:23:12

risk events and the market sort of

tightening, especially in the futures

366

: 00:23:16

in, in the energy complex and leading

to a short term, you know, risk on

367

: 00:23:23

position and energies especially.

368

: 00:23:24

And then that reversed because the

conflict ended really quickly, right?

369

: 00:23:28

Now, in contrast in Q1, we had a, a major

conflict, emerge and it was sustained

370

: 00:23:35

and there were real, in the real world

shortages that persisted and there were

371

: 00:23:42

real consumers of energy products that

became very concerned about not having

372

: 00:23:48

enough, inventory on hand, jet fuel

or diesel for shipping or, you know,

373

: 00:23:54

for, for a wide variety of gasoline.

374

: 00:23:56

And therefore you had these consumers that

were bidding up prices on the front end.

375

: 00:24:01

And so you had this convenience

yield, this difference between the

376

: 00:24:05

front month or spot and futures

contracts that mature further down

377

: 00:24:11

the pipe, really rising substantially

right to, historically high level.

378

: 00:24:17

And that led to a very strong carry

signal suggesting that we should

379

: 00:24:21

be quite long the energy complex.

380

: 00:24:23

And this chart that we're showing here

shows how that carry signal strengthened,

381

: 00:24:30

pretty rapidly after the onset of the

Iran war and has persisted, and therefore,

382

: 00:24:36

you know, because that's persisted and

the front month energy prices actually

383

: 00:24:41

rose very substantially under that

persistent high carry, the carry strategy

384

: 00:24:47

was able to capitalize on that, right?

385

: 00:24:50

and the other markets in the portfolio,

there were a few others that contributed.

386

: 00:24:54

positively as well, but about 18% of that

22, 23% rise in the carry strategy in Q1

387

: 00:25:03

came from the energy complex, and this is

exactly the type of profile that we hope

388

: 00:25:09

to see for these types of strategies.

389

: 00:25:13

Right?

390

: 00:25:13

When do we most want these

diversifying stacks to pay off?

391

: 00:25:18

Well, when the other, sleeves in the

portfolio are having a difficult time.

392

: 00:25:26

Equities responded with a risk off

posture, When the war was initiated,

393

: 00:25:33

bonds did as well as markets began

to fear sustain inflation from a

394

: 00:25:40

potential persistent blockage or

embargo on the Strait Of Hormuz.

395

: 00:25:45

And so bonds sold off, equity sold

off, but the energy complex, which was

396

: 00:25:50

largely responsible for this risk on

posture and this inflation expectation

397

: 00:25:58

spike went on to more than compensate.

398

: 00:26:02

Right?

399

: 00:26:02

And so, you know, the, the carry strategy

more than offset the losses in bonds and

400

: 00:26:08

the losses in equities over that period.

401

: 00:26:11

At the same time, because we're, we're

paying attention to both the strength

402

: 00:26:17

of the carry signal and the expansion

and contraction and the risk of the

403

: 00:26:24

instruments that we're trading, we've

got a strengthening carry signal.

404

: 00:26:28

But because the volatility of the

energy complex also expanded pretty

405

: 00:26:33

substantially higher volatility means

that we need to contract exposure

406

: 00:26:38

to sustain our target level of risk.

407

: 00:26:41

So it, that risk expansion competes

with the increase in the strength

408

: 00:26:47

of the carry signal and, you know,

serves as a mediating factor.

409

: 00:26:52

As the carry has kind of

stabilized, but risk has, you

410

: 00:26:56

know, been, been sustained higher.

411

: 00:26:58

That overall position in, in energies

has contracted somewhat right?

412

: 00:27:03

And that's the natural ebb and flow and

the evolution of the weights in carry

413

: 00:27:08

that we expect to see and that, that we've

designed the strategy to capitalize on.

414

: 00:27:13

Right.

415

: 00:27:15

Anything you wanna

416

: 00:27:16

Corey Hoffstein: one of the things,

one of the things that's come up,

417

: 00:27:18

one of the question is, is when.

418

: 00:27:21

People's presumption is that this

situation with the Strait of Hormuz

419

: 00:27:26

is just gonna suddenly fix itself,

not fix itself, it will be fixed

420

: 00:27:31

and suddenly the Strait will be

open, oil will be flowing again.

421

: 00:27:34

And that allocating to something

like Carry right now would then

422

: 00:27:39

lead to substantial drawdowns.

423

: 00:27:42

Curious your, your thoughts on

that, that balance of, okay,

424

: 00:27:44

we've got a very steep curve.

425

: 00:27:45

What the market is pricing in, what

the carry signals say versus Right.

426

: 00:27:51

Bearing the risk of a supply crunch

and being stepping in and providing

427

: 00:27:57

the liquidity to that market, you

know, earning a risk premium for

428

: 00:28:00

that versus, you know, everyone's

expectation that, oh, this is, this is

429

: 00:28:04

suddenly going to reprice very quickly

and we're gonna be caught off sides.

430

: 00:28:07

And, you know, a big 22% return

in, in Q1 is going to become a

431

: 00:28:13

negative 20% return next quarter.

432

: 00:28:16

Adam Butler: Yeah.

433

: 00:28:16

I mean, what, what I think is most

important to realize is that the carry

434

: 00:28:20

signals are, are derived at root by what

the most experienced and knowledgeable

435

: 00:28:30

players in the markets are doing to hedge

their own supply demand dynamics, right?

436

: 00:28:38

You've got real consumers of these

products who've got actuaries, risk

437

: 00:28:44

managers, managers in various different

product lines, all making their forecasts.

438

: 00:28:51

They're as close to the metal as anybody

can be in markets in order to have the

439

: 00:28:57

best information and the, the fastest

reaction to changes information of anybody

440

: 00:29:03

in the marketplace, and all we're doing

is responding to the signals that those

441

: 00:29:08

experienced people that are closest to the

metal are sending via their own actions

442

: 00:29:15

in terms of how much they are preferring

to have, excess inventory on hand versus

443

: 00:29:21

how much they're willing to wait and pay

for cheaper crude, for example, a little

444

: 00:29:25

bit down the, down the line, right?

445

: 00:29:28

So, you know, if anything I am taking

advantage or, or I would be looking to

446

: 00:29:35

take advantage of the acute attention

that these players are paying to

447

: 00:29:41

these markets at the moment, and be

relying on the way that our, our,

448

: 00:29:47

our signals are viewing these markets

in order to capitalize on these

449

: 00:29:51

changes in views and adapt over time.

450

: 00:29:54

Corey Hoffstein: I think one of the

interesting things to also point out

451

: 00:29:56

is that if, again, if you go to the

RSBY or RSSY website pages, right?

452

: 00:30:02

You can see energy is a meaningful

contributor of our risk adjusted

453

: 00:30:07

weights, but it is by no means

like the only contributor, right?

454

: 00:30:11

We have positions in metals and equities

and bonds, and yes, energy's moved quite

455

: 00:30:16

a bit, but they weren't, they're, they're

not the, they're not in the driver's seat

456

: 00:30:21

per se, entirely of, of the portfolio.

457

: 00:30:23

Again, the idea here is that we're

constantly trying to balance risk

458

: 00:30:27

across all these different markets in

line with the strength of the signals.

459

: 00:30:32

Energies by far and away have

the most, the strongest signals.

460

: 00:30:36

but in the interest of diversification,

like their, their weight is actually

461

: 00:30:40

substantially below where their

theoretical weight could be given

462

: 00:30:43

the strength of their signals.

463

: 00:30:44

And we actually recently this

quarter added a scatter plot.

464

: 00:30:48

I'm gonna see if I can quickly

share my screen to the RSSY page.

465

: 00:30:54

RSBY as well.

466

: 00:30:57

And hopefully this is showing up.

467

: 00:30:59

And you can see this is the carry

score in the portfolio weights.

468

: 00:31:03

And you can go market by market

and see what its implied.

469

: 00:31:06

Carry score is, we're using some

math to back out a single carry

470

: 00:31:12

score in the portfolio versus

its risk adjusted target weight.

471

: 00:31:15

And you can see the

energy complex over here.

472

: 00:31:17

And despite having really high carry

scores, they are not, you know, so

473

: 00:31:22

heavily overweighted relative to other

things that have lower carry scores.

474

: 00:31:26

And this is a mix of, constraints

built into the optimizer as well as the

475

: 00:31:31

optimization process, trying to manage

diversification within the strategy.

476

: 00:31:36

And that leads to a situation where

energies are an important driver.

477

: 00:31:41

The other sectors are also contributing

a fair amount of risk, both positive

478

: 00:31:45

and negative to the portfolio

and from a directional basis.

479

: 00:31:49

So again, these are, these are all on the

website published daily, should be updated

480

: 00:31:54

daily with the most recent, scores.

481

: 00:31:57

The, this is a simplified view.

482

: 00:31:59

Again, we're using some math here to

back out sort of a single uniform score.

483

: 00:32:04

We use dozens to hundreds of different

carry measures under the hood to try

484

: 00:32:09

to find different ways of capturing

carry from these futures markets.

485

: 00:32:14

But this backs out sort of a single

snapshot view to just get a sense of

486

: 00:32:18

how these markets are being positioned

relative to the strength of their carry

487

: 00:32:22

and how we're trading off risk versus

return potential in the portfolio.

488

: 00:32:26

Adam Butler: just, just highlight a couple

of those dots that are in the lower right

489

: 00:32:30

quadrant there, which have positive carry

stores, but, but negative weights, right?

490

: 00:32:34

Corey Hoffstein: Yeah, so

natural gas is an example here.

491

: 00:32:37

you know, again, it's always

hard to, to say what an optimizer

492

: 00:32:40

is doing specifically, but this

does have a positive carry score,

493

: 00:32:43

but is being used negatively.

494

: 00:32:46

You know, I would guess that the optimizer

is using this to offset again, the

495

: 00:32:51

very positive exposures we have in the

496

: 00:32:53

Adam Butler: Yeah, that's right.

497

: 00:32:54

It's got a, it's got a slightly

positive, carry score, but it is, it's

498

: 00:33:00

a great diversifier against the general

energy risk and its diversification

499

: 00:33:06

utility now exceeds its expected

return utility in carry units.

500

: 00:33:13

And so it's, it's held short as a

diversifier rather than held being

501

: 00:33:16

held in the long book as a return.

502

: 00:33:19

As a return source.

503

: 00:33:20

Right.

504

: 00:33:21

And that's the, that's the nature

of the optimizer doing its work.

505

: 00:33:25

Corey Hoffstein: And we can see that

really clearly with the equities.

506

: 00:33:27

All of the equities have

negative carry right now.

507

: 00:33:30

But you have things like, the dax,

the NASDAQ 100 and, and the NI K 2 25

508

: 00:33:35

being held long while the Euro stocks

50 S&P 500, S&PTSX 60, the Canadian

509

: 00:33:43

market and the FS C 100 are being held

short and effectively, even though they

510

: 00:33:47

all have negative carry scores, right?

511

: 00:33:49

You're capturing somewhat of a spread

here, the spread in carry between these

512

: 00:33:53

markets and the up top versus the markets

down bottom, and you're, and you're

513

: 00:33:57

trading them against each other and

effectively, more or less, dare I say,

514

: 00:34:01

neutralizing the equity beta component

on sort of on average with these markets.

515

: 00:34:06

And this all comes out again from

the optimization process, trying

516

: 00:34:10

to find where, how it can maximize

the carry, given the amount of

517

: 00:34:18

risk it's allowed to take on.

518

: 00:34:21

Adam Butler: Yep.

519

: 00:34:21

Yeah, so that's a really good example

just to demonstrate how correlation

520

: 00:34:25

is also taken into, into account.

521

: 00:34:27

Right.

522

: 00:34:28

And, you know, so, so no surprise,

obviously the energy sector has been the

523

: 00:34:31

largest source of return attribution.

524

: 00:34:34

but, bonds have also been

contributed positively.

525

: 00:34:38

equity allocations have

contributed positively.

526

: 00:34:41

And, you know, it's just been really

nice to see how the, how the portfolio

527

: 00:34:44

has evolved in actually a fairly

intuitive way when you, when you

528

: 00:34:47

actually account for the expansion

and risk and the, the change in

529

: 00:34:52

characteristics over, the last few months.

530

: 00:34:54

So, doing its job.

531

: 00:34:57

Corey Hoffstein: Keeping

an eye on the time here.

532

: 00:34:58

I'm gonna keep moving.

533

: 00:34:59

There's a couple of questions that we

will get to at the end if people wanna

534

: 00:35:02

stick around, um, that have come up here.

535

: 00:35:04

But I wanna move on to, the Return

Stack Bonds and Merger Arbitrage ETF.

536

: 00:35:10

The idea behind this ETF is that for

every dollar invested, you're gonna

537

: 00:35:14

get a dollar of exposure to core US

treasuries, plus a dollar of exposure

538

: 00:35:18

to a merger arbitrage strategy.

539

: 00:35:21

And I would argue that sort of the

best comp to this portfolio would

540

: 00:35:26

be a, a corporate bond fund, right?

541

: 00:35:28

When you think about corporate bonds,

really what you're getting there is core

542

: 00:35:32

US treasuries plus a credit risk premium.

543

: 00:35:36

Here with something like RSBA, we're

trying to give you US treasuries

544

: 00:35:39

plus a merger arb risk premium.

545

: 00:35:42

And we think Merger ARB represents a

unique and very defensible risk premium.

546

: 00:35:47

Uh, something that tends to be less

correlated to credit, less correlated

547

: 00:35:50

to equity markets in general, uh,

and something we can argue why

548

: 00:35:54

should persist and be pervasive.

549

: 00:35:56

Um, and so then it's just a really a

question of how you're implementing

550

: 00:35:59

the merger arbitrage strategy.

551

: 00:36:01

Uh, our merger arbitrage strategy tracks

the Alpha Beta Merger Arbitrage Index.

552

: 00:36:05

This is a firm that was running a merger

arbitrage hedge fund that, uh, we hired

553

: 00:36:10

to translate their hedge fund strategy

into an index that we then use to track.

554

: 00:36:15

It's a machine learning based model

that trains on the history of US based

555

: 00:36:19

deals, all sorts of characteristics

to determine what they think both the

556

: 00:36:24

time horizon of deal closure is as well

as the probability of deal closure,

557

: 00:36:29

and uses that to figure out what

the expected return of the deal is.

558

: 00:36:33

And so long as the announced deal hits

an expected return threshold of 400

559

: 00:36:39

basis points above the risk-free rate,

we include it within the portfolio.

560

: 00:36:44

We saw a decent amount

: 2026

561

: 00:36:47

We introduced four new positions

throughout the quarter, and

562

: 00:36:51

we closed out two deals.

563

: 00:36:53

you know, again, every deal that's

closed that doesn't fall apart

564

: 00:36:56

represents, uh, an accretive

positive return to the portfolio.

565

: 00:37:00

So that's great.

566

: 00:37:01

I think one of the things I, I want

to talk about really is this figure.

567

: 00:37:07

So what figure 14 shows is the

isolated excess return of credit

568

: 00:37:17

versus the isolated excess return

of the alpha beta merger arbitrage

569

: 00:37:20

index since RSBA's inception.

570

: 00:37:25

So when I talk about the isolated

excess return of credit, what

571

: 00:37:28

I'm effectively saying is take

corporate bonds and hedge out all the

572

: 00:37:32

underlying interest rate exposure.

573

: 00:37:34

What you're left over is with return

that's purely coming from the credit

574

: 00:37:40

spread, so changes in the credit

spread, as well as the excess yield that

575

: 00:37:45

you're generating for that credit risk.

576

: 00:37:49

Then in green, right, you're

effectively, simply getting, well,

577

: 00:37:52

what are, how are deals compressing

with the, merger risk premium?

578

: 00:37:57

How, how are, what are you returning?

579

: 00:38:00

I think what we can see is,

is two very, well, I'll say

580

: 00:38:03

three very important things.

581

: 00:38:04

the first is that substantially

lower volatility in the alpha beta

582

: 00:38:08

merger arbitrage index versus credit.

583

: 00:38:10

This is something I just think, again,

when you take a basket of idiosyncratic

584

: 00:38:15

deals and you hold them together,

it's no surprise that you tend to

585

: 00:38:20

have a lower volatility profile than

something like credit, which on average

586

: 00:38:25

has much more exposure to what's

happening collectively in the economy.

587

: 00:38:30

We can see over the period that it

did ultimately outperform credit.

588

: 00:38:34

We, we've started this fund

in fairness, at a point where

589

: 00:38:37

spreads have been quite tight.

590

: 00:38:39

They remain quite tight.

591

: 00:38:40

I think, again, it's a good argument for

why you should diversify against credit.

592

: 00:38:43

If we started this fund when spreads

were very, very high, I wouldn't expect

593

: 00:38:47

to necessarily see this outperformance.

594

: 00:38:48

But, you know, again, we're, we're

happy to have delivered excess returns

595

: 00:38:52

versus credit over this period.

596

: 00:38:55

But the thing I want to address is this

question that comes up a lot, which is

597

: 00:38:58

okay, we often say that the correlation

of merger arbitrage should be low to

598

: 00:39:04

credit and should be low to equities,

and certainly lower to equities than

599

: 00:39:09

the correlation between credit and

equities because you're combining all

600

: 00:39:14

of these idiosyncratic deals together.

601

: 00:39:17

And when you combine all these

idiosyncratic deals, and these deals

602

: 00:39:20

don't really have a lot to do with what's

happening necessarily in the economy.

603

: 00:39:24

More to do with, you know, what's

the regulatory environment like?

604

: 00:39:27

is it likely that the deal's gonna go

through earlier or later than expected?

605

: 00:39:31

All of that sort of stuff.

606

: 00:39:32

Are regulator's gonna intervene?

607

: 00:39:34

And you're combining a

whole bunch of those.

608

: 00:39:36

It's, it's no, in my opinion, no surprise

that you would expect low correlation.

609

: 00:39:40

But you do see some correlation.

610

: 00:39:43

And one of the things I, I wanna

try to provide some insight into

611

: 00:39:48

is like, why do you see correlation

between merger arb and equities when

612

: 00:39:55

you wouldn't necessarily expect the

deals to have day-to-day correlation?

613

: 00:39:59

And the answer is because how

the deals are priced, right?

614

: 00:40:04

So when a deal is announced, there's going

to be the pre trading price, but prior to

615

: 00:40:10

announcement that the stock was trading

at, and then the acquisition price.

616

: 00:40:15

And the stock is going to jump up towards

the acquisition price, taking into account

617

: 00:40:20

both the time value of money for when

the deal is expected to be closed and

618

: 00:40:25

the probability that the market thinks

the deal is going to close at, right?

619

: 00:40:30

And that how far it jumps is

effectively giving you in course

620

: 00:40:36

terms like the probability that the

market thinks the deal's gonna close.

621

: 00:40:40

But the deal's not closing

tomorrow, the deal's closing in

622

: 00:40:42

six months or maybe 12 months, or

maybe even 18 months or two years.

623

: 00:40:46

And over that time, the market

is going to move up and down.

624

: 00:40:51

And in the case that the deal

does fall apart, the stock is

625

: 00:40:57

going to fall to some price.

626

: 00:40:59

Now you typically assume it's gonna

fall to the pre-announcement price.

627

: 00:41:04

And then it's the pre-announcement price

adjusted by what the market has done.

628

: 00:41:09

So if that stock has a beta of one to

the market, for example, and the market

629

: 00:41:14

is going up over time, well, you would

actually expect the price, uh, that

630

: 00:41:19

it's trading at to get closer and closer

and closer to the acquisition price.

631

: 00:41:22

'cause the price it would fall to

if the deal fell apart, is actually

632

: 00:41:25

higher and higher and higher.

633

: 00:41:26

If the deal's gotten less

risky, your downside is lower.

634

: 00:41:31

But let's say all of a sudden the market

drops 50% and you expect, well, if the

635

: 00:41:36

deal fell apart, the price that we would

be falling to would actually be 50% lower.

636

: 00:41:41

Well, it's no surprise that the spread

then would actually widen a bit.

637

: 00:41:47

Now this is all gonna take into account,

you know, again, the time value of

638

: 00:41:51

money when we expect the deal to close.

639

: 00:41:54

Um, if we're expecting the deal to

close in a week, the deal might be

640

: 00:41:57

less sensitive to what's happening

in the market if we expect the

641

: 00:41:59

deal to close in six months.

642

: 00:42:02

But there's a low probability

of it closing, right?

643

: 00:42:05

It might, may, might be much

more sensitive to the market.

644

: 00:42:07

So all that plays in, but it's not,

it's not sensitive to the market because

645

: 00:42:13

the market falling apart necessarily

means more deals are gonna fail.

646

: 00:42:18

It's not inherently true.

647

: 00:42:19

These deals are very hard to get out of,

and unless the acquirer goes bankrupt,

648

: 00:42:23

they're typically going through.

649

: 00:42:25

It's simply that it's an

adjustment of risk, right?

650

: 00:42:29

All else held equal if the market

sells off and the price at which

651

: 00:42:32

the deal would fall to goes lower

than the spread should widen.

652

: 00:42:35

For us, that actually represents

a great opportunity for

653

: 00:42:38

the way our strategy works.

654

: 00:42:40

I mentioned that we added four

deals, uh, throughout the quarter.

655

: 00:42:45

two deals closed throughout the quarter.

656

: 00:42:46

We ended the quarter about 60% allocated

at the right, at the end of quarter,

657

: 00:42:52

after quarter turn, we added two more

deals, and these were deals that we

658

: 00:42:55

had passed over previously, but the

market had been so volatile in March.

659

: 00:43:00

And because equities had sold off, the

deals had actually widened out relative

660

: 00:43:06

to the a, the takeout price and actually

covered now our required return target.

661

: 00:43:13

And so we were able to take advantage

of short-term market volatility

662

: 00:43:17

to add those names 'cause they now

met our expected return threshold.

663

: 00:43:22

Um, so you do see some correlation and

it's, again, what I wanna stress is

664

: 00:43:26

it's not the reason people typically

expect you have correlation equities.

665

: 00:43:30

It's not 'cause the deal is

necessarily gonna fall apart.

666

: 00:43:32

It's simply because the price,

the risk is changing and that has

667

: 00:43:35

to get priced into the spread.

668

: 00:43:37

Adam Butler: I think too, it's just

quickly something to emphasize here,

669

: 00:43:40

like you, you've done your best to kind

of back out some of the impacts that

670

: 00:43:45

investors would actually experience

with an allocation of credit.

671

: 00:43:49

Like you've backed out

interest rate risk here, right?

672

: 00:43:51

On the black line.

673

: 00:43:52

Right.

674

: 00:43:53

But most investors can't back,

it's hard to, to back that out.

675

: 00:43:56

Right.

676

: 00:43:56

You don't, you don't typically get that.

677

: 00:43:58

And at the moment, people are actually

relatively fearful of duration and,

678

: 00:44:03

and fearful of interest rate risk.

679

: 00:44:05

Well, we talked to a lot of

advisors who are reticent to

680

: 00:44:08

put more bond risk on, right.

681

: 00:44:11

the, I think what's the weighted average

duration of these expected deal closures?

682

: 00:44:17

You, you, you're under a year.

683

: 00:44:18

Well, under a

684

: 00:44:19

Corey Hoffstein: Yeah, well.

685

: 00:44:20

Adam Butler: yeah.

686

: 00:44:21

So, so this is actually quite a,

a, a low duration credit index

687

: 00:44:25

with very low correlation to your

other normal credit indices, right?

688

: 00:44:32

So it's, it's a very nice

diversifier and it also provides

689

: 00:44:35

another escape hatch for you to, to

provide bond-like returns without.

690

: 00:44:42

Having that sort of duration exposure that

you would typically have to get by, you

691

: 00:44:48

know, in, in most other bond-like indices?

692

: 00:44:51

Right.

693

: 00:44:51

So at this moment, I mean, there's a lot

of reasons why merger ARB is attractive,

694

: 00:44:55

but at this moment I think it's especially

attractive for that group of investors

695

: 00:44:59

who are fearful of future inflation

and, and are unhappy with needing to

696

: 00:45:05

go out and have to allocate to duration

to get their normal, bond allocation.

697

: 00:45:12

Corey Hoffstein: Yeah, I

mean, this allows you to swap.

698

: 00:45:14

If you have duration, you're

gonna maintain your duration

699

: 00:45:17

and add the merger ARB on top.

700

: 00:45:19

But I think for us, what we're

particularly excited about is, is

701

: 00:45:22

in the short period we've had it

that sort of year and a quarter

702

: 00:45:25

that this fund has been live.

703

: 00:45:27

it has delivered excess returns relative

to both US treasuries and US corporates.

704

: 00:45:32

And, and I don't think the opportunity

to continue diversifying risk away

705

: 00:45:37

from corporates has diminished at all.

706

: 00:45:39

Spreads remain quite tight in US

corporates relative to history.

707

: 00:45:43

And so, uh, for folks who are looking to

diversify into another very defensible

708

: 00:45:48

risk premium, but have, you know, a

strategy that's going to look at around

709

: 00:45:53

the same risk in total volatility

as that corporate bond portfolio.

710

: 00:45:57

I think this is a very

compelling offering.

711

: 00:46:00

Adam Butler: Yeah, if you don't

want stack duration, this is

712

: 00:46:02

a really nice diversifier.

713

: 00:46:04

Corey Hoffstein: Yep.

714

: 00:46:05

All right, Adam, let's talk about RSSX.

715

: 00:46:08

Our, our newest ETF.

716

: 00:46:10

Adam Butler: Yeah, so

we've got, this is great.

717

: 00:46:12

This is a hundred percent

allocation to US equities and then

718

: 00:46:15

a risk adjusted or risk weighted

allocation to both gold and Bitcoin.

719

: 00:46:21

And, we love this because, you know,

equities do respond reasonably well

720

: 00:46:26

to moderate levels of inflation, but

historically, once inflation expectations

721

: 00:46:32

tick substantially above kind of 4%,

and especially if they tick materially

722

: 00:46:36

above 6%, then equity's also begin to

suffer right alongside bonds, right?

723

: 00:46:41

But that's right around the time

that historically hard assets like

724

: 00:46:46

gold and potentially Bitcoin might

really into kick into gear, right?

725

: 00:46:51

So you've got this really nice both

empirical diversification stocks,

726

: 00:46:57

gold and Bitcoin historically have

kind of, on average, about a zero

727

: 00:47:00

correlation to one another if you kind

of look back over a regional horizon.

728

: 00:47:04

But also they provide like a nice,

a nice structural diversification.

729

: 00:47:08

And when you risk balance the allocation

between gold and Bitcoin on average,

730

: 00:47:14

historically you'd be looking at

kind of somewhere between 70 and

731

: 00:47:18

80% gold and then 20 to 30% Bitcoin.

732

: 00:47:22

And that adapts over time as the,

the volatility of Bitcoin evolves

733

: 00:47:27

and the volatility of gold evolves.

734

: 00:47:30

And actually this quarter was a really

nice case study for that because the

735

: 00:47:33

gold volatility expanded so substantially

that even though we use a relatively

736

: 00:47:38

long-term lookback to measure the

relative volatilities, that vol

737

: 00:47:43

expansion gold was still substantial

enough to actually have an impact.

738

: 00:47:48

And so the allocation of Bitcoin

crept up a little bit in the

739

: 00:47:51

portfolio, the allocation of gold.

740

: 00:47:53

came down a little bit and that was really

helpful because, you know, there was a

741

: 00:47:58

bit of a narrative violation that happened

on the onset of this war in the Gulf.

742

: 00:48:04

I think probably the logical expectation

going in was a gold would rally and that

743

: 00:48:09

Bitcoin might sell off because Bitcoin

has been a bit of a risk on risk off

744

: 00:48:13

asset, over the past couple of years.

745

: 00:48:16

But the opposite happened.

746

: 00:48:18

And actually gold really had quite a

steep sell off, but Bitcoin started

747

: 00:48:23

to really, bounce higher and that,

that, that bounced kind of accelerated

748

: 00:48:27

as the, as the war proceeded.

749

: 00:48:29

And I'm not gonna try to explain

that, but it's just really nice to see

750

: 00:48:33

that, you know, we can tell ourselves

stories, and have expectations, but

751

: 00:48:39

really what we want to emphasize

is structural diversification.

752

: 00:48:42

And while the story didn't play out

the way we might've expected, the

753

: 00:48:46

diversification potential played out

exactly as we might've hoped, right?

754

: 00:48:52

And so the, the move in Bitcoin

higher offset to a meaningful

755

: 00:48:56

extent the sell off in gold.

756

: 00:48:59

And we saw a much smoother, line right

than we might expect from the fact that

757

: 00:49:04

we've got three assets, each of which has

quite a bit of volatility on their own.

758

: 00:49:09

But because of that diversification,

they do a nice job of smoothing return

759

: 00:49:14

when they're held together, right?

760

: 00:49:16

I mean, an expectation, if you were to

hold these three assets and they were

761

: 00:49:20

perfectly correlated, you'd be looking

at a volatility of about 40% on the

762

: 00:49:24

portfolio, but in expectation because

those three assets are, have about a zero

763

: 00:49:30

expected correlation with one another

that 40% volatility comes all the way

764

: 00:49:35

down to sort of 20 to 25% volatility.

765

: 00:49:37

Right.

766

: 00:49:38

Much more manageable.

767

: 00:49:40

And that's exactly what you see.

768

: 00:49:42

I mean, look at the, the black line

there relative to the experience of the

769

: 00:49:47

yellow, the green, and the blue lines.

770

: 00:49:50

Right.

771

: 00:49:50

I just think it's remarkable to

actually see that diversification

772

: 00:49:55

play out in real time and attenuate

that volatility experience.

773

: 00:50:00

This is really the, the, the

portfolio being much better than

774

: 00:50:04

the sum of its individual parks

because of that diversification.

775

: 00:50:07

Playing out.

776

: 00:50:10

Corey Hoffstein: There's the

narratives we tell ourselves versus

777

: 00:50:11

what markets actually do and, and I

think a lot of people would've said

778

: 00:50:16

the flight to safety in gold would've

been the obvious trade in March.

779

: 00:50:20

And maybe because it was obvious,

that's why it fell apart, right?

780

: 00:50:24

People were selling their gold perhaps

to shore up the dollars they needed or,

781

: 00:50:29

you know, to fund the exposure elsewhere.

782

: 00:50:34

I don't think anyone would've guessed

that Bitcoin would've been flat up

783

: 00:50:37

over that meaningful risk off period.

784

: 00:50:40

But, you know, again, this is why having

humility in, in enjoying long-term

785

: 00:50:45

structural diversification and trying to

balance the volatility of these assets

786

: 00:50:50

as in the overlay, um, I think is a, is

a great way and, and particularly why we

787

: 00:50:55

designed this strategy the way we did.

788

: 00:50:58

Adam Butler: Yep.

789

: 00:50:59

Corey Hoffstein: Despite all that

volatility, you know, again, compared to

790

: 00:51:01

just an s and p benchmark since inception,

and take these numbers with a large grain

791

: 00:51:05

of salt because it is less than a year.

792

: 00:51:09

you know, since inception still over

700 basis points annualized on the s

793

: 00:51:14

and p, it's been a good period for gold.

794

: 00:51:15

A bad period, horrible

period frankly, for Bitcoin.

795

: 00:51:18

Peak to trough had a

50% drawdown just about.

796

: 00:51:22

But still that risk weighted balance

between gold and Bitcoin more

797

: 00:51:25

than offset that drawdown with,

with the rally we saw in gold.

798

: 00:51:28

And that's exactly, you know, we designed

this that way so that neither asset

799

: 00:51:33

was completely driving the portfolio.

800

: 00:51:36

All right, we're hitting 50 minutes.

801

: 00:51:38

One of the things we want to do before

we go, and there's a whole bunch of

802

: 00:51:41

questions here Adam, so hopefully you

got some time to stick around after the

803

: 00:51:44

hour turns and we can talk about this.

804

: 00:51:46

But I wanna, I wanna share one more

thing that we published this quarter,

805

: 00:51:52

which is on our returnstacked.com

806

: 00:51:56

site.

807

: 00:51:57

We introduced a new tool, so

if you go to returnstacked.com

808

: 00:52:01

and go to tools, we launched what's

called the Portfolio Visualizer.

809

: 00:52:06

And if you launch the visualizer,

you'll be taken to a widget that

810

: 00:52:10

allows you to explore basically

return stacking concepts.

811

: 00:52:16

What you can do in a fairly isolated

manner is choose some sort of base

812

: 00:52:20

ranging from a hundred percent stocks, 0%

bonds, all the way to 0% bonds, a hundred

813

: 00:52:25

percent stocks, and then you can choose

some sort of allocation for your stack.

814

: 00:52:32

So let's say I wanted to explore what

a 50% managed futures, 50% merger arb

815

: 00:52:38

stack look like on top of my 60 40.

816

: 00:52:42

And I was willing to go

up to a 30% stack size.

817

: 00:52:46

We can see what the equity curves

would've historically looked like.

818

: 00:52:50

We can look at some

performance statistics.

819

: 00:52:52

These are nice to have.

820

: 00:52:53

But I think what's more useful from

an experience perspective is looking

821

: 00:52:58

at things like the rolling returns.

822

: 00:53:00

How, what periods would the stacked

portfolio have an outperformed

823

: 00:53:05

the strategic benchmark?

824

: 00:53:07

What does it feel like

over any 12 month period?

825

: 00:53:11

What does it feel like over a.

826

: 00:53:13

You know, longer horizon,

period, call it five years.

827

: 00:53:17

Right?

828

: 00:53:18

Let's look at the drawdowns.

829

: 00:53:19

How do these things compare?

830

: 00:53:20

How long would they have been?

831

: 00:53:21

When would you have had a bigger

drawdown in the stacked portfolio

832

: 00:53:25

versus the stock bond blend?

833

: 00:53:27

How long was the longest drawdown

in each of these portfolios?

834

: 00:53:31

You can look by calendar year, right?

835

: 00:53:33

How many years would it have

underperformed in a row?

836

: 00:53:36

How many years would've

it outperformed in a row?

837

: 00:53:38

What years that you care about that you

remember, like: 2018

838

: 00:53:43

for me, that diversification just did not

work in: 2018

839

: 00:53:48

bad would your relative return have been?

840

: 00:53:50

Is that something that you could stomach?

841

: 00:53:52

And then the opportunity to just look

at sort of the, the stacked blend in

842

: 00:53:56

isolation to look at the equity curve.

843

: 00:53:58

What would that have looked like?

844

: 00:54:00

How, how did it correlate to your stock

bond mix over a given period to get a

845

: 00:54:05

sense of, you know, how does, how stable

were those correlations over time?

846

: 00:54:10

All this, you know, again, in

a fairly isolated manner, but

847

: 00:54:14

to build the intuition, I think

it's a pretty powerful tool.

848

: 00:54:17

And then there's two things you can do.

849

: 00:54:19

There's a link to share if you want to

basically copy this and send it to someone

850

: 00:54:23

or send it to us to, if you're trying

to explore an idea, whoever loads that

851

: 00:54:28

link, we'll get this exact stock bond mix.

852

: 00:54:31

And the other thing you can do is you

can generate a summary PDF, that's

853

: 00:54:34

gonna take your exact blend, put it

into a PDF, take all these graphs and

854

: 00:54:38

charts and build out a really nice

looking PDF that you can walk away with.

855

: 00:54:43

Explore a little bit later.

856

: 00:54:44

Of course, you can always

discuss the stack you're building

857

: 00:54:46

with one of our consultants.

858

: 00:54:48

If you click on this, it'll send the

exact stack you've built so they know

859

: 00:54:51

what you're talking about, and you

can set up a meeting with them to

860

: 00:54:54

discuss what you're working on and,

and the goals you're trying to achieve.

861

: 00:54:57

So this is something we published

a little over a month ago.

862

: 00:55:00

We've seen a really big pickup in usage

and adoption, which we'd love to see.

863

: 00:55:05

Again, we're just trying to provide

the tools to help people build some

864

: 00:55:08

intuition as to how these things look

and the trade-offs that come in when

865

: 00:55:12

you choose different bases versus

different stacks and different stack

866

: 00:55:16

sizes and different stack combinations.

867

: 00:55:18

It all leads to different outcomes

and, and what stack size and what

868

: 00:55:23

blend is appropriate for you or your

clients, or a particular client is

869

: 00:55:27

gonna be very based on their risk

appetite, risk tolerance, and their

870

: 00:55:32

ultimately their goals and objectives.

871

: 00:55:34

And so this is a tool that lets us

explore some of those degrees of freedom.

872

: 00:55:38

We have to get an idea of how

things would've played out.

873

: 00:55:41

Adam Butler: We should also note

that there's an even more flexible

874

: 00:55:45

and robust tool coming down the pipe

that we'll be launching imminently.

875

: 00:55:48

And so we would encourage you to go to

the site and sign up for that now, and

876

: 00:55:53

we'll let you know when that's available.

877

: 00:55:55

And, we're pretty excited about it.

878

: 00:55:58

there's a lot of new tools

that we've got on the burner.

879

: 00:56:01

This one is just extraordinarily

helpful and useful.

880

: 00:56:05

And, so come to the site,

sign up and, and get access to

881

: 00:56:08

all the future tools as well.

882

: 00:56:10

If you're an advisor.

883

: 00:56:11

Corey Hoffstein: Yeah, the more

advanced version will basically

884

: 00:56:13

allow you to build any base stack,

any base portfolio you want using.

885

: 00:56:18

I think it's like three

dozen different indices.

886

: 00:56:21

Any stack you want using three

different dozen different indices.

887

: 00:56:25

really powerful.

888

: 00:56:26

Uh, so, so stay tuned for that.

889

: 00:56:28

We'll have, you know, obviously varying

levels of trying to build intuition.

890

: 00:56:31

Sometimes a little bit of constraint.

891

: 00:56:32

It does is helps you build that base

intuition before you really dive

892

: 00:56:36

deep and, and customize and explore.

893

: 00:56:39

Alright, Adam, we have

a lot of questions here.

894

: 00:56:41

I'm gonna start by saying

thank you everyone for, for

895

: 00:56:44

sticking with us this long.

896

: 00:56:45

we have probably maybe a dozen, half a

dozen questions I, I want to get to here.

897

: 00:56:51

But for those of you who have to

leave, thank you for your time.

898

: 00:56:53

We really appreciate it.

899

: 00:56:54

If you do have any questions,

please go to return stack.com,

900

: 00:56:56

go to the contact section.

901

: 00:56:59

Um, you can fill out a contact form

or get in touch directly with your

902

: 00:57:02

regional consultant and they can

answer any questions you have, whether

903

: 00:57:05

it's about our products or anything

else, return stacking related.

904

: 00:57:09

and again, thank you for your time.

905

: 00:57:10

We're just gonna stay here

and try to get through as many

906

: 00:57:12

of these questions as we can.

907

: 00:57:14

And if you have to leave, this will have

a replay eventually and you can tune

908

: 00:57:17

in and hear the q and uh, afterwards.

909

: 00:57:20

So again, thank you Adam.

910

: 00:57:22

I wanna start uh, the very first

question we got was, uh, I know you

911

: 00:57:24

can't give specifics, but do you guys

have plans to expand the ETF lineup?

912

: 00:57:30

really it is tough to talk about because

we are technically in the quiet period.

913

: 00:57:34

We have an ETF that we have

filed for that filing is public.

914

: 00:57:40

So I can say that we have filed for an

international equity and managed futures,

915

: 00:57:46

ETF I cannot state our exact plans on

when we intend or hope to launch that

916

: 00:57:52

fund, but we did file for that, call it,

I don't know, 65 days ago, 60 days ago.

917

: 00:57:59

Um, so that is public.

918

: 00:58:00

You can go find that filing, uh,

in the SEC's Edgar database and,

919

: 00:58:04

and look up all the details there.

920

: 00:58:06

Again, it is not an effective filing.

921

: 00:58:08

I cannot tell you if or

when it will go effective.

922

: 00:58:11

Um, but that is a product we have

intentions to launch and we do in

923

: 00:58:15

intend to continue to build out the

suite in different combinations of,

924

: 00:58:19

of bases and stacks so that we can

provide maximum flexibility to people

925

: 00:58:23

building return stacking portfolios.

926

: 00:58:25

Adam Butler: Right.

927

: 00:58:26

We've got another question here

about the introduction of grain

928

: 00:58:29

markets in the, the futures lineup.

929

: 00:58:32

So grains have more rigid CFTC limits.

930

: 00:58:36

We can't trade them in the

same size at front month.

931

: 00:58:40

A lot of managers do trade back

month contracts in order because

932

: 00:58:44

they have much larger, limits

than the front month contracts.

933

: 00:58:47

And that would typically be what

you'd find maybe in, in some, hedge

934

: 00:58:51

fund style two and 20 products.

935

: 00:58:53

We have investigated that.

936

: 00:58:55

and we, we do some back month

grains in, in some other products.

937

: 00:59:00

The reality is when we look at the

replication suite, they don't add,

938

: 00:59:06

they don't explain a lot of, extra

variance of the benchmark index.

939

: 00:59:11

and so, you know, adding them

doesn't add a lot of extra margin,

940

: 00:59:14

but it does add a substantial amount

of extra operational complexity.

941

: 00:59:18

And so it's not something that we're,

clamoring to do at the moment, but

942

: 00:59:23

it's definitely on the research agenda.

943

: 00:59:26

And, you know, for consideration

sometime down the line.

944

: 00:59:29

Corey Hoffstein: Yeah.

945

: 00:59:29

I think to add to that, we, we

found, I think soybean was maybe

946

: 00:59:32

of the AGs the largest traded and

maybe having the largest impact.

947

: 00:59:37

But when you consider it would be

the 28th market we trade, it doesn't

948

: 00:59:41

suddenly become a huge position.

949

: 00:59:43

It, it stays like a one 28th risk

position and from there it's just, it

950

: 00:59:49

has a marginal impact, but it's hard

to really extract whether that's.

951

: 00:59:52

Noise or true value.

952

: 00:59:55

when we look at really what is the

major factors that are driving the

953

: 01:00:00

beta, it's no surprise, it's, it's

things like gold oil, equity, beta, the

954

: 01:00:07

10 year US treasury, euro dollar, yen

dollar, like those are the big drivers.

955

: 01:00:13

And in, and the reason they're the

big drivers is because when you have

956

: 01:00:17

a really big crisis, most of the

long tail stuff ends up correlating

957

: 01:00:21

with the big macro drivers, which

get picked up in those markets.

958

: 01:00:24

And so when you look at, like, when the

category really moves, you don't have a

959

: 01:00:30

lot of, it's not a tremendous number of

like factors that are driving things.

960

: 01:00:34

It's one or two factors that are

picked up by just a couple of markets.

961

: 01:00:37

And so, continuing to add markets tends to

make I think what research, which suggests

962

: 01:00:44

more of an absolute return product and

less of a product that is convex to macro

963

: 01:00:48

environments, which is what the beta sort

of category return tends to look like.

964

: 01:00:55

very specific question here.

965

: 01:00:56

Do you have a document that shows

how much of the bond component or

966

: 01:00:59

government obligations for tax purposes?

967

: 01:01:02

Uh, yes we do.

968

: 01:01:03

Uh, please send us a message

directly and I can send you a PDF.

969

: 01:01:06

We don't have that on the website

at the moment, but that is something

970

: 01:01:10

I can send to you directly.

971

: 01:01:12

Uh, hoping to improve our tax reporting

in: 2026

972

: 01:01:20

this stuff available on the website..

973

: 01:01:23

Adam Butler: Corey, as Convergent herb

strategies can have nonlinear fat left

974

: 01:01:27

tails during liquidity crisis, how do

you expect RSBA to behave in a GFC or.com

975

: 01:01:32

style crisis?

976

: 01:01:33

That's a

977

: 01:01:34

Corey Hoffstein: Yeah, so I think, again,

it depends on the, on the type of crisis.

978

: 01:01:37

Dot com is very different than GFC, right?

979

: 01:01:39

But regardless, you know, if you have a

deal that's closing in a year and over

980

: 01:01:44

that year the market sells off 50%, or

it sells off 50% very quickly and spends

981

: 01:01:51

its time down there, like the spread is

going to blow out meaningfully for any

982

: 01:01:56

deal, even if the probability of that

deal getting closed doesn't change.

983

: 01:01:59

That gets exacerbated in like a true

liquidity crunch like the GFC where

984

: 01:02:03

people have to sell out of every position.

985

: 01:02:05

They have to fund positions

elsewhere, come up with cash.

986

: 01:02:10

And so you see spreads

blow out wider and wider.

987

: 01:02:12

So there is some left tail.

988

: 01:02:14

Some of it again, is just.

989

: 01:02:15

The repricing effects.

990

: 01:02:16

I discussed that in a big drawdown, right?

991

: 01:02:21

you're going to have certain

deals just get wider and wider.

992

: 01:02:23

But again, these deals are,

tend to be somewhere between six

993

: 01:02:27

months and two years in length.

994

: 01:02:28

The deals we've had on, I think, have

been much closer to six to nine months.

995

: 01:02:32

Some of them have been as short as three

months, if I'm not mistaken, right?

996

: 01:02:37

If you have a market sell off over a

two year period, but you have a bunch of

997

: 01:02:41

deals that keep closing in six months,

they, they're gonna be fighting that, that

998

: 01:02:46

need for the deal to approach the deal

price versus, you know, the spread being

999

: 01:02:51

forced wider by the market going down.

: 1000

01:02:53,507 --> 01:02:58,307

It's not as big an impact versus

a very sudden sharp sell off.

: 1001

01:02:58,337 --> 01:03:00,977

You would expect to see all deals widen.

: 1002

01:03:01,407 --> 01:03:06,687

GFC again being the liquidity crunch

element of that is, is unique.

: 1003

01:03:06,777 --> 01:03:09,417

And when you have a liquidity

crunch market wide, yes, you're

: 1004

01:03:09,417 --> 01:03:11,037

gonna see deal spreads blowout.

: 1005

01:03:11,397 --> 01:03:13,347

Again, not necessarily because

the probability of the deal.

: 1006

01:03:13,347 --> 01:03:14,037

Closure change.

: 1007

01:03:14,067 --> 01:03:18,297

Closure change is just maybe with the bath

water, people need to come up with cash.

: 1008

01:03:18,517 --> 01:03:18,937

Adam Butler: Yeah.

: 1009

01:03:18,937 --> 01:03:23,197

And, and also I think you'd

probably expect the, the deal

: 1010

01:03:23,197 --> 01:03:26,737

frequency to slow down substantially

during, during recessions or

: 1011

01:03:26,737 --> 01:03:27,847

during liquidity events, right?

: 1012

01:03:28,387 --> 01:03:30,291

Just, capital gets more expensive.

: 1013

01:03:30,291 --> 01:03:36,727

People begin to, to, to pull in their

risk budgets and, so that might limit

: 1014

01:03:37,147 --> 01:03:39,157

expected returns over those periods.

: 1015

01:03:39,267 --> 01:03:42,777

that's less of a risk exposure

and more of just a, you know,

: 1016

01:03:43,017 --> 01:03:44,907

lack of return opportunities.

: 1017

01:03:45,387 --> 01:03:48,987

But what happens then is, is

typically that those same acquisition

: 1018

01:03:48,987 --> 01:03:53,572

targets have the same strategic

accreative value to the acquirers.

: 1019

01:03:53,962 --> 01:03:59,362

So there tends to be like a, a cluster

then of, of major deals that happens

: 1020

01:03:59,362 --> 01:04:04,542

as, as those credit spreads close and

as the the liquidity event, moderates,

: 1021

01:04:04,612 --> 01:04:07,912

which makes more, that makes up for

what happened during that interim time.

: 1022

01:04:08,822 --> 01:04:10,022

Corey Hoffstein: Adam,

we got a question here.

: 1023

01:04:10,232 --> 01:04:10,622

We get.

: 1024

01:04:10,982 --> 01:04:12,422

One of the things I love

about these quarterlies is

: 1025

01:04:12,422 --> 01:04:13,712

we get really into the weeds.

: 1026

01:04:13,772 --> 01:04:16,512

Uh, we got a question here about the

trading costs differences between

: 1027

01:04:16,512 --> 01:04:19,452

the three trend systems and are there

differences in liquidity that drive

: 1028

01:04:19,452 --> 01:04:26,132

higher trading costs for, between the

top down, say small universe and the

: 1029

01:04:26,132 --> 01:04:32,282

top down larger universe where we're

trading 27 contracts versus a much

: 1030

01:04:32,282 --> 01:04:35,612

smaller amount of contracts and those

contracts tend to be more liquid.

: 1031

01:04:35,612 --> 01:04:38,882

So I dunno, if you want to, if you

want to comment there, I, all I will

: 1032

01:04:38,882 --> 01:04:43,112

say is like measuring trading costs.

: 1033

01:04:43,532 --> 01:04:48,692

I know this is, this has been a topic on

a lot of trend following podcasts lately.

: 1034

01:04:49,532 --> 01:04:54,002

I think people make measuring trading

costs sound a lot easier than it truly is.

: 1035

01:04:55,172 --> 01:04:57,512

Because when you talk about

measuring trading costs, there's a

: 1036

01:04:57,512 --> 01:04:59,642

lot of what if that goes into it.

: 1037

01:04:59,642 --> 01:05:02,522

There's obviously the very explicit

trading costs that you can easily

: 1038

01:05:02,522 --> 01:05:07,172

measure, which is, you know, what are

the actual like commissions you pay?

: 1039

01:05:07,922 --> 01:05:11,612

And those are things you can negotiate and

try to get better rates than other people

: 1040

01:05:11,612 --> 01:05:13,892

and, and the way you work with brokers.

: 1041

01:05:14,221 --> 01:05:19,532

But then there's the question of, if I

choose to say, implement my trade as a

: 1042

01:05:19,562 --> 01:05:26,702

twap over intraday, I might have lower

market impact, but my actual price of

: 1043

01:05:26,702 --> 01:05:33,602

execution may be worse than if I had

just had a higher impact and dumped

: 1044

01:05:33,602 --> 01:05:34,502

it all at the beginning of the day.

: 1045

01:05:35,522 --> 01:05:35,942

Right?

: 1046

01:05:36,422 --> 01:05:38,312

Is that good or bad execution?

: 1047

01:05:38,312 --> 01:05:41,732

Well do, if you don't have a view

as to the beginning, the market

: 1048

01:05:41,732 --> 01:05:45,242

where the market's going, intraday,

like, you know, it might just be

: 1049

01:05:45,242 --> 01:05:47,642

the cost of the trade sometimes.

: 1050

01:05:47,642 --> 01:05:49,712

For example, I've heard people talk about.

: 1051

01:05:50,552 --> 01:05:53,012

Running what's called a taker

versus a maker algorithm.

: 1052

01:05:53,012 --> 01:05:55,562

Are you crossing the spread

to implement your trade?

: 1053

01:05:56,162 --> 01:05:59,102

Well, if you cross the spread,

that's an explicit cost.

: 1054

01:05:59,402 --> 01:06:02,312

People might say, well, I

run a, I'm, I'm patient.

: 1055

01:06:02,642 --> 01:06:03,992

I let people come to me.

: 1056

01:06:04,471 --> 01:06:08,612

Well, if you let people come to you, but

the real price of the asset has moved

: 1057

01:06:08,612 --> 01:06:12,452

and they're, you know, sort of quote

unquote taking through you, yes, you

: 1058

01:06:12,452 --> 01:06:16,232

didn't have to cross the spread, but you

got traded at a price that's incorrect.

: 1059

01:06:16,232 --> 01:06:19,862

And if you look at the ticks after

your trade, you've actually lost

: 1060

01:06:19,862 --> 01:06:21,392

money relative to where you traded.

: 1061

01:06:21,902 --> 01:06:22,982

It is in Incredi.

: 1062

01:06:22,982 --> 01:06:26,642

And these are, I know some of this might

not make sense to many people listening,

: 1063

01:06:26,642 --> 01:06:34,232

but the point is measuring trading costs

is incredibly difficult and nuanced.

: 1064

01:06:34,232 --> 01:06:37,742

And I think a lot of the conversation

that's been going on in some popular

: 1065

01:06:37,742 --> 01:06:41,702

podcasts around the trading costs of

trend following are just substantially

: 1066

01:06:41,702 --> 01:06:43,742

missing the details of some of this.

: 1067

01:06:44,072 --> 01:06:48,782

Um, and I, I don't think it's

easy to say, like one system

: 1068

01:06:48,782 --> 01:06:51,677

has more or less trading costs.

: 1069

01:06:51,677 --> 01:06:54,377

You generally expect higher liquidity

instruments to have lower trading

: 1070

01:06:54,377 --> 01:06:58,187

costs, but if you're trading them in

larger size, 'cause you have fewer

: 1071

01:06:58,187 --> 01:07:01,817

instruments, you might have more

impact because you're making bigger

: 1072

01:07:01,817 --> 01:07:03,557

trades even though they're more liquid.

: 1073

01:07:03,887 --> 01:07:09,287

So it's, it's not easy to say and it

requires a ton of detailed analysis.

: 1074

01:07:10,082 --> 01:07:13,412

Adam Butler: I mean, look,

execution matters a lot.

: 1075

01:07:13,742 --> 01:07:18,466

And, you know, we've been trading

tures for, well, since, since: 2017

: 1076

01:07:18,736 --> 01:07:21,076

and we learned a lot over that period.

: 1077

01:07:21,076 --> 01:07:27,736

And we have renegotiated with our, our

service providers, and we've improved

: 1078

01:07:27,736 --> 01:07:29,686

our execution algorithms over time.

: 1079

01:07:29,686 --> 01:07:33,496

And that continues to be an ongoing

battle that is well worth fighting.

: 1080

01:07:33,706 --> 01:07:37,966

There's also some averaging

that goes on, right?

: 1081

01:07:37,966 --> 01:07:40,396

So we don't trade those three

models in three different accounts.

: 1082

01:07:40,396 --> 01:07:41,716

We trade them all in the same account.

: 1083

01:07:41,716 --> 01:07:46,396

So you might have the, the medium sized

model might be saying we should be

: 1084

01:07:46,396 --> 01:07:50,566

adding to our two year treasury position.

: 1085

01:07:50,986 --> 01:07:55,306

The the nine asset model might

be saying we should be lowering

: 1086

01:07:55,306 --> 01:07:56,836

exposure to the two year treasuries.

: 1087

01:07:57,136 --> 01:08:01,156

And our bottom up model might be

saying, you know, no, no change today.

: 1088

01:08:01,396 --> 01:08:06,226

So, you know, while both those models

may be arguing for a change because

: 1089

01:08:06,226 --> 01:08:09,736

they're arguing for a change in opposite

directions, they average out and it

: 1090

01:08:09,736 --> 01:08:13,666

ends up that there's actually no, no

trade in that market today, right?

: 1091

01:08:13,966 --> 01:08:15,676

So you do get a lot of

this trade averaging.

: 1092

01:08:16,095 --> 01:08:23,386

We also do a lot to, stabilize

our, our estimates for our models.

: 1093

01:08:23,996 --> 01:08:27,626

And we also do, impose some

smoothing, the smoothing.

: 1094

01:08:28,241 --> 01:08:29,651

Actually does two things.

: 1095

01:08:29,770 --> 01:08:35,681

Obviously it lowers the amount of

daily trading, but also empirically

: 1096

01:08:35,770 --> 01:08:37,901

it improves the fit, right?

: 1097

01:08:37,961 --> 01:08:41,621

So it has this kind of, you know,

you don't actually, you don't see

: 1098

01:08:41,621 --> 01:08:45,640

this very often, honestly, where

you make a decision to try to slow

: 1099

01:08:45,640 --> 01:08:49,541

down your, your trading, you're not

gonna be as reactive to the signals.

: 1100

01:08:50,031 --> 01:08:54,020

that actually helps in terms

of, of your performance from

: 1101

01:08:54,020 --> 01:08:55,191

a tracking year perspective.

: 1102

01:08:55,551 --> 01:08:57,470

And it also lowers your trading costs.

: 1103

01:08:57,711 --> 01:09:01,491

So, you know, this is kind of

a happy, coincidence with the

: 1104

01:09:01,491 --> 01:09:03,151

tracking, models that we run.

: 1105

01:09:03,151 --> 01:09:04,951

So there's a lot going on.

: 1106

01:09:05,011 --> 01:09:06,901

We take execution very seriously.

: 1107

01:09:07,441 --> 01:09:10,557

There are some beneficial ways to

the way that we model things and,

: 1108

01:09:10,607 --> 01:09:12,227

we'll continue to improve over time.

: 1109

01:09:13,051 --> 01:09:16,721

Corey Hoffstein: We do have some actual

hard numbers that we think we can sort

: 1110

01:09:16,721 --> 01:09:20,711

of back out as to what our trading costs

have been over the last three years.

: 1111

01:09:21,131 --> 01:09:25,152

but again, I, I'm not, I don't wanna

share those hard numbers with, without

: 1112

01:09:25,152 --> 01:09:28,692

the caveat of, like other people talking

about hard numbers might be measuring

: 1113

01:09:28,692 --> 01:09:31,332

them entirely differently than we are.

: 1114

01:09:31,542 --> 01:09:35,082

And you can be, someone can say their

trading costs are 10 basis points.

: 1115

01:09:35,261 --> 01:09:38,022

Someone might say they're 200 basis

points and they're just measuring

: 1116

01:09:38,022 --> 01:09:39,702

completely different trading costs.

: 1117

01:09:39,702 --> 01:09:44,711

And so to me it's, it's a conversation

that unless everyone at the table agrees

: 1118

01:09:44,711 --> 01:09:48,642

as to how trading costs are measured, it's

not a conversation, frankly, worth having.

: 1119

01:09:49,022 --> 01:09:49,232

Adam Butler: And a

: 1120

01:09:49,631 --> 01:09:51,822

Corey Hoffstein: Good news is all

of those are baked into returns.

: 1121

01:09:51,852 --> 01:09:53,051

Just look at the returns, right.

: 1122

01:09:53,682 --> 01:09:54,372

It's all in there.

: 1123

01:09:55,052 --> 01:09:55,292

Adam Butler: Yeah.

: 1124

01:09:55,292 --> 01:09:57,962

I mean, a manager that gets access

to a strategy via swap, you don't

: 1125

01:09:57,962 --> 01:09:59,402

even see the, the, the trading costs.

: 1126

01:09:59,402 --> 01:10:01,532

They all happen behind the

scenes, you know, like it's,

: 1127

01:10:01,532 --> 01:10:03,362

there's, it's complicated.

: 1128

01:10:04,286 --> 01:10:06,446

Corey Hoffstein: one of the questions

here, Adam, is can you tell me how often

: 1129

01:10:06,446 --> 01:10:10,406

RSBT and RSBY correlate with equities?

: 1130

01:10:10,406 --> 01:10:15,476

Do you find that the futures normally

level off when the market runs higher?

: 1131

01:10:15,716 --> 01:10:17,006

Sort of two questions there.

: 1132

01:10:17,246 --> 01:10:18,326

Um, you wanna address this one?

: 1133

01:10:19,711 --> 01:10:25,951

Adam Butler: So the correlation with

equities tends to be about zero on

: 1134

01:10:25,951 --> 01:10:30,451

average over the long term for both the

trend strategy and the carry strategy.

: 1135

01:10:30,931 --> 01:10:36,901

It's worth mentioning that carry and trend

correlate on average of about kind of 0.2

: 1136

01:10:36,901 --> 01:10:37,891

to 0.3,

: 1137

01:10:38,141 --> 01:10:40,871

historically over the,

over the long term, right?

: 1138

01:10:41,471 --> 01:10:49,901

But by their nature and the ability for

the entire portfolio to adjust to changes

: 1139

01:10:49,931 --> 01:10:56,981

in trends in the, in the equity complex,

in changes in carry in the equity complex,

: 1140

01:10:57,311 --> 01:11:04,866

there will be time varying correlation,

to equities across both carry and trend.

: 1141

01:11:05,406 --> 01:11:10,746

Now, conveniently and we continue to

say that, you know, in our opinion,

: 1142

01:11:11,046 --> 01:11:15,666

the best way to allocate to trend and

carry is to allocate to both together.

: 1143

01:11:16,326 --> 01:11:22,806

And that's because they view the markets

from very different angles and oftentimes

: 1144

01:11:23,376 --> 01:11:28,116

for the very reason that that equities are

rising a lot and therefore the dividend

: 1145

01:11:28,116 --> 01:11:31,536

yield on equities is, is often declining.

: 1146

01:11:31,536 --> 01:11:36,076

If that, rise is, is relatively,

happens to a relatively short

: 1147

01:11:36,106 --> 01:11:41,626

horizon, well, because then the

dividend yield is, is shrinking,

: 1148

01:11:42,016 --> 01:11:44,056

the carry signal is also shrinking.

: 1149

01:11:44,056 --> 01:11:48,856

At some point, if equities

rise enough, and especially if

: 1150

01:11:49,246 --> 01:11:52,486

short-term interest rates are f

are also falling at the same time.

: 1151

01:11:53,071 --> 01:11:58,051

The dividend yield relative to the

funding cost may flip negative, at

: 1152

01:11:58,051 --> 01:12:02,971

which point you've got carry showing

a negative allocation or certainly a

: 1153

01:12:02,971 --> 01:12:06,511

negative signal relative to equities.

: 1154

01:12:06,511 --> 01:12:10,501

While, while trend has a positive

signal relative to equities and you,

: 1155

01:12:10,591 --> 01:12:12,931

you often have one offsetting the other.

: 1156

01:12:13,201 --> 01:12:16,921

And what's great is that often happens,

you know, during especially strong

: 1157

01:12:16,921 --> 01:12:19,321

spikes, higher inequities, right?

: 1158

01:12:19,621 --> 01:12:24,871

The carry strategy is kind of moderating

the equity allocation that would

: 1159

01:12:25,021 --> 01:12:29,581

you'd otherwise be getting from that,

that that major move in equities.

: 1160

01:12:29,881 --> 01:12:35,731

And so it, it mediates that the, the,

the give back that you get on the

: 1161

01:12:35,881 --> 01:12:40,351

equity holdings and the trend strategies

when that trend reverses, right?

: 1162

01:12:40,591 --> 01:12:44,581

So they're just very complimentary

in mechanically the way they work.

: 1163

01:12:45,571 --> 01:12:45,861

Corey Hoffstein: Yeah.

: 1164

01:12:45,866 --> 01:12:49,766

One of the things I often hear, and maybe

where this question is coming from, is,

: 1165

01:12:50,306 --> 01:12:53,966

especially as an overlay, people are

uncomfortable with the idea of trend or

: 1166

01:12:53,966 --> 01:12:57,626

carry trading equities where they already

have so much equity exposure in their

: 1167

01:12:57,626 --> 01:13:02,006

portfolio and they sort of have this idea

that they're adding more equity risk.

: 1168

01:13:02,006 --> 01:13:04,736

And there have certainly been periods

over the last three years that trend

: 1169

01:13:04,736 --> 01:13:07,316

has been very equity correlated.

: 1170

01:13:08,096 --> 01:13:08,396

Right.

: 1171

01:13:08,666 --> 01:13:12,576

Um, what you find, and this is I think

we published some blog posts about

: 1172

01:13:12,581 --> 01:13:16,716

this, Quanta has a great research paper

about this, is that if you take equities

: 1173

01:13:16,866 --> 01:13:22,626

out of trend it or, or you cap equity

exposure or you do things to, you know,

: 1174

01:13:22,626 --> 01:13:28,356

maybe only trade equities negative for

example, it has a very strong impact on

: 1175

01:13:28,356 --> 01:13:30,966

the total return profile of trend, right.

: 1176

01:13:30,966 --> 01:13:34,896

Equities have been a good contributor

trend, has worked on equities

: 1177

01:13:34,896 --> 01:13:36,726

over the last 20, 25 years.

: 1178

01:13:37,206 --> 01:13:42,966

And so you are in theory lowering

the excess return as well as

: 1179

01:13:42,966 --> 01:13:46,266

lowering the internal diversification

within the trend program.

: 1180

01:13:46,266 --> 01:13:50,736

So, you know, again, where our objective

is to, to track the beta of the category.

: 1181

01:13:51,336 --> 01:13:53,496

The beta of the category

clearly has equities in it.

: 1182

01:13:53,916 --> 01:13:56,376

You know, for us to meet that

objective, we have to trade equities.

: 1183

01:13:56,706 --> 01:14:01,386

But I would also argue that those

equities, right, again, if you believe

: 1184

01:14:01,386 --> 01:14:06,306

trend signals work on average over the

long run, like when those, you have

: 1185

01:14:06,306 --> 01:14:10,086

that extra equity beta, that's precisely

when you want it in your portfolio.

: 1186

01:14:10,146 --> 01:14:11,376

That's what trend is telling you.

: 1187

01:14:11,736 --> 01:14:12,476

Same with Carry.

: 1188

01:14:13,291 --> 01:14:18,266

Adam Butler: And historically it's

kind of a 50 50 bet about whether

: 1189

01:14:18,476 --> 01:14:24,416

carry might be the best diversifier to,

to an equity allocation in a certain

: 1190

01:14:25,406 --> 01:14:28,886

risk off environment for equities or

whether trend is gonna act as that,

: 1191

01:14:29,356 --> 01:14:31,336

meet, you know, nice diversifier, right?

: 1192

01:14:31,546 --> 01:14:37,606

It really is kind of 50 50 over time

and it's nice to have two potential

: 1193

01:14:37,666 --> 01:14:43,486

opportunities as a risk offset in the

portfolio instead of relying on just one.

: 1194

01:14:43,871 --> 01:14:46,466

Corey Hoffstein: Well, I think this

is a great point, Adam, because a lot

: 1195

01:14:46,466 --> 01:14:50,876

of people I think might presume that

the offset to equities is coming from

: 1196

01:14:50,876 --> 01:14:53,996

the ability to short equities and

the reality is like what we just saw

: 1197

01:14:53,996 --> 01:14:58,826

in Q1 is the offset of equities in

carry was just long energy positions.

: 1198

01:14:59,366 --> 01:15:01,196

We reline line the clock to: 2022

: 1199

01:15:01,976 --> 01:15:05,156

You know, none of our, our funds rely,

but this is just sort of empirically true.

: 1200

01:15:05,156 --> 01:15:10,136

If you look at man futures funds, it

was shorting bonds and long the dollar

: 1201

01:15:10,556 --> 01:15:16,436

that was driving performance, offsetting

equity losses, not the ability to short

: 1202

01:15:16,436 --> 01:15:18,926

equities or or in that environment be long

: 1203

01:15:19,041 --> 01:15:22,071

Adam Butler: I go back to the dot

com bubble, you know that when, when

: 1204

01:15:22,081 --> 01:15:29,416

dot com rolled over in mid: 2000

was long energies, long metals that

: 1205

01:15:29,696 --> 01:15:34,906

carried the portfolio for, you know,

the next five, six years actually.

: 1206

01:15:35,176 --> 01:15:36,826

so yeah, a hundred percent.

: 1207

01:15:36,826 --> 01:15:40,786

It's not the ability to short

equities that that often gives you

: 1208

01:15:40,786 --> 01:15:42,616

that equity bear market offset.

: 1209

01:15:42,616 --> 01:15:44,686

It's the ability to be long other markets.

: 1210

01:15:45,356 --> 01:15:47,281

Corey Hoffstein: Adam, one of the

questions we have here, and this is

: 1211

01:15:47,281 --> 01:15:49,771

the, maybe the final question we'll

address is do we have any idea what

: 1212

01:15:49,771 --> 01:15:52,321

the capacity is for each strategy?

: 1213

01:15:52,891 --> 01:15:56,071

There's a lot of ETFs, but what I'll

say something like our stocks and

: 1214

01:15:56,071 --> 01:15:58,771

bonds ETF as a massive capacity.

: 1215

01:15:58,801 --> 01:16:04,831

We're effectively trading passive

global equities and US treasuries.

: 1216

01:16:04,831 --> 01:16:09,811

I mean, there's just the capacity there

is in the tens of billions, if not more.

: 1217

01:16:10,241 --> 01:16:15,011

when you talk about the trend products,

right, I think you can probably talk

: 1218

01:16:15,011 --> 01:16:22,616

about in the, you know, five to 10 billion

before you really get to impact concerns.

: 1219

01:16:22,616 --> 01:16:25,286

And there's things that can be

done there to alleviate impact.

: 1220

01:16:25,286 --> 01:16:29,416

And then you're having a trade off of

impact versus goodness, affair, right?

: 1221

01:16:30,816 --> 01:16:33,986

Carry, it's gonna be similar, you're

trading the same markets, carry

: 1222

01:16:33,986 --> 01:16:35,366

tends to move a little slower.

: 1223

01:16:35,366 --> 01:16:38,096

I don't know if you disagree with

with that, but I, in my experience,

: 1224

01:16:38,096 --> 01:16:41,846

when I look at trend weights changing

over time, they tend to be move

: 1225

01:16:41,846 --> 01:16:43,286

faster than the carry weights do.

: 1226

01:16:43,376 --> 01:16:46,196

Carry weights can still move

at a rapid pace as we saw.

: 1227

01:16:46,286 --> 01:16:49,256

You know, like with energy, if

the, if the curve reprices quickly,

: 1228

01:16:49,256 --> 01:16:52,766

you're gonna get a very, meaningful

change in, in weight shortly, but

: 1229

01:16:52,766 --> 01:16:54,356

on average they tend to move slower.

: 1230

01:16:54,356 --> 01:16:56,336

So there's lower impact potential there.

: 1231

01:16:56,336 --> 01:17:00,656

So you might say, you know, maybe

another 25, 50% capacity there.

: 1232

01:17:01,556 --> 01:17:01,976

Merger

: 1233

01:17:01,976 --> 01:17:02,846

arbitrage.

: 1234

01:17:03,191 --> 01:17:08,211

Adam Butler: we could 10 x at least the,

the, the lineup and, and yeah, I mean,

: 1235

01:17:08,511 --> 01:17:13,481

we, we would just use more sophisticated

execution strategies, but it, the,

: 1236

01:17:13,586 --> 01:17:15,116

the capacity is, is there no question.

: 1237

01:17:15,925 --> 01:17:18,786

Corey Hoffstein: Merger arbitrage,

you're probably talking about a billion

: 1238

01:17:18,786 --> 01:17:20,856

capacity in the strategy as designed.

: 1239

01:17:20,856 --> 01:17:25,686

There are some, there's some

flexibility to adjust the index to

: 1240

01:17:25,716 --> 01:17:30,096

include more names, force liquidity,

constraints a little tighter.

: 1241

01:17:30,096 --> 01:17:33,846

Our objective with all of these is

that they run at size the same way

: 1242

01:17:33,846 --> 01:17:36,096

they run it 10 million or $50 million.

: 1243

01:17:36,096 --> 01:17:39,096

We don't want a prior track record

to not be relevant to someone

: 1244

01:17:39,096 --> 01:17:43,146

evaluating its size, but we're

not unaware of capacity issues.

: 1245

01:17:43,196 --> 01:17:46,316

you know, I think around a billion

dollars merger, arb, we'd really have to

: 1246

01:17:46,736 --> 01:17:48,506

make some decisions about some impact.

: 1247

01:17:48,956 --> 01:17:53,276

And then, equities and gold

and Bitcoin, RSSX, huge amount

: 1248

01:17:53,276 --> 01:17:54,536

of capacity there as well.

: 1249

01:17:54,925 --> 01:17:57,326

you know, again, those are highly,

highly liquid markets that we're

: 1250

01:17:57,326 --> 01:18:01,766

trading in and we're not making

huge, substantial day-to-day changes.

: 1251

01:18:02,341 --> 01:18:07,061

Adam Butler: Importantly, you know,

we engineered these stacks to scale.

: 1252

01:18:07,946 --> 01:18:11,966

the, the merger arbitrage strategy,

we could have made decisions

: 1253

01:18:11,966 --> 01:18:14,906

that allowed for much smaller

deals to go into the portfolio.

: 1254

01:18:14,906 --> 01:18:17,966

For example, we deliberately

excluded them, right?

: 1255

01:18:17,966 --> 01:18:25,196

So, so we have made design decisions that

we think are on that Pareto frontier that

: 1256

01:18:25,196 --> 01:18:33,026

gives us the maximum diversification and

portfolio execution efficiency at enough,

: 1257

01:18:33,086 --> 01:18:37,166

capacity to scale these so that they

can be, you know, products that can be

: 1258

01:18:37,166 --> 01:18:39,236

held in any portfolio for the long term.

: 1259

01:18:40,211 --> 01:18:40,601

Corey Hoffstein: Yep.

: 1260

01:18:41,171 --> 01:18:41,501

All right.

: 1261

01:18:41,501 --> 01:18:42,941

I think we hit just about every question.

: 1262

01:18:42,941 --> 01:18:46,581

If we didn't get to your

question, I apologize.

: 1263

01:18:46,861 --> 01:18:49,321

it's just because I merely overlooked

it, not because I was avoiding it.

: 1264

01:18:49,621 --> 01:18:53,431

Please, uh, uh, if you have any other

questions, send a message to us.

: 1265

01:18:53,701 --> 01:18:54,961

Go to return stack.com,

: 1266

01:18:54,961 --> 01:18:55,981

go to the contact page.

: 1267

01:18:55,981 --> 01:18:58,141

You are gonna get in touch with

your regional consultant, or you

: 1268

01:18:58,141 --> 01:19:00,241

can send an email in directly.

: 1269

01:19:00,241 --> 01:19:04,141

And, uh, it's always all hands on deck

answering any inbound questions we have,

: 1270

01:19:04,141 --> 01:19:06,300

so we'll jump on it as quickly as we can.

: 1271

01:19:06,361 --> 01:19:08,371

Uh, I wanna thank everyone for

their time, especially if you

: 1272

01:19:08,461 --> 01:19:09,536

stuck around for the q and a.

: 1273

01:19:09,866 --> 01:19:13,741

Again, we really appreciate your interest

in the return stack, ETF suite, as

: 1274

01:19:13,741 --> 01:19:15,241

well as your patronage of our products.

: 1275

01:19:15,461 --> 01:19:18,550

and until next quarter, this

has been stacked unpacked.