The ETF Show - Accessing Smart Income And Alpha & Emerging Markets EX China Through ETFs

04 mins 33 secs

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Jonathan Forsgren:    Welcome to this edition of The ETF Show. I'm joined by Darren Schuringaa, CEO of ASYMmetric ETFs.
    Darren, thank you for joining us.
Darren Schuringa:    It's a pleasure to be here. Thank you for having me.
Jonathan Forsgren:    So you just rung the bell. What was that to commemorate?
Darren Schuringa:    It was to commemorate the launch of our two new ETFs: MORE, M-O-R-E, and ZSPY, Z-S-P-Y.
Jonathan Forsgren:    And what are the strategies behind those two ETFs?
Darren Schuringa:    Okay. So MORE is giving investors more of what they're looking for. It's part of our Smart Income category of ETFs. Smart Income are designed to produce greater income with less risk than the overall market. ZSPY is part of our Smart Alpha series of ETFs, and what it's designed to do is produce greater returns with the same risk profile. So greater income with less risk, greater returns with similar risk, we consider that pretty smart.
Jonathan Forsgren:    Sounds like it to me. And why now? Why are you launching these now? What about this marketing environment makes those funds relevant?
Darren Schuringa:    Okay. So ZSPY, if you've lost a lot of money on the downside and you want to recoup your losses coming out of it and you believe we're coming into a bull market, ZSPY makes a lot of sense. It addresses some of the weaknesses of traditional leverage product. Its period returns, if you hold it for a year and the S&P is up 20%, you'd expect ZSPY to be up 40%. But it has downside protection. Very different. Investors don't want leverage in both directions, they want upside leverage. That's what ZSPY offers. And MORE, it's a source of alternative income. It gives you high current income with a potential for price appreciation as well. So if you're looking for income, if interest rates come down again, you say, "Well, how am I going to get an income in my portfolio?" check out MORE.
Jonathan Forsgren:    Well, Darren, thank you very much for joining us this morning.
Darren Schuringa:    It's a pleasure to be here. Thank you for having me.
Jonathan Forsgren:    I'm joined by Anson Frericks, Co-founder and President of Strive Asset Management.
    Anson, thank you very much for joining us.
Anson Frericks:    No, Jonathan, thank you so much for having me here. This is great, being on the New York Stock Exchange floor.
Jonathan Forsgren:    Can you tell us a little bit about the most recent ETF you launched?
Anson Frericks:    Yes. Last month, we launched our Strive Emerging Market EX China fund, ticker symbol STXE.
Jonathan Forsgren:    And can you tell us a little bit about the strategy behind it?
Anson Frericks:    Yeah, definitely. We think that China risk is one of the most underappreciated risk in the investment universe right now. One of the reasons is if you go back to last year, when Russia invaded Ukraine, you've had anybody that had exposure to Russian assets, they effectively lost all of their capital. And no one really even a year ago was talking about Russia's incursion of Ukraine. We think that there's actually a chance that China, due to, you have Xi Jinping, who just took an unprecedented in third term as Chinese [inaudible 00:03:11] effectively has made him the emperor of China, there's a couple different things that he's doing to creating additional risk in China.
    One, he's partnering with Russia in terms of arming them in the Ukraine invasion. He's also ratcheting up pressure on Taiwan. And he's even sending spy balloons, as you know, across the entire United States. So there's real risk, and especially if China would actually invade Taiwan or China ratchet up pressure militarily within Russia, within Ukraine, within the US. Therefore, you could have all of a sudden a lot of rattling in the emerging markets. So that's why we created our fund that gives exposure to 27 emerging markets, but just takes China out of it due to those risks that are underappreciated by, I think, other large asset managers.
Jonathan Forsgren:    And who's this fund created for? Who's your target investor?
Anson Frericks:    Yeah, so our target investor, what was seeded with a hundred million dollar investment from a large institutional client that did have emerging markets exposure with China, but for some of the explicit reasons I just stated, they wanted to remove that exposure from their portfolio. So that's who initially seeded our fund. But I think this is really for retail investors as well that want sort of low fee passive exposure to emerging markets, but just take out that China risk from this.
Jonathan Forsgren:    Well, Anson, thank you very much for joining us today.
Anson Frericks:    No, Jonathan, thank you so much. Really appreciate it.
Jonathan Forsgren:    And to our viewers, thanks for watching. For Asset TV, I'm Jonathan Forsgrenen. We'll see you next time.


Darren Schuringa, CFA, CEO of ASYMmetric ETFs discusses the launch of ASYMmetric’s most recent Smart Income (MORE) and Smart Alpha (ZSPY) ETFs for investors looking for outsized returns with abated risk, and Anson Frericks, Co-founder & President of Strive Asset Management discusses the launch of their most recent ETF (STXE), allowing investors to access emerging market yields, while hedging against China risk.