Bilal Little:
Welcome to another edition of ETF Central. I'm your host, Bilal Little. I'm really excited about today's guest because the active ETF landscape is changing so rapidly. And we have Matt Camuso, the head of ETF solutions over at Baron Capital. With that, Matt, welcome to the show.
Matt Camuso:
Thanks for having me.
Bilal Little:
[Inaudible 00:00:30]-
Matt Camuso:
Good to see you.
Bilal Little:
Good to see you too, man. Is this your first time at the Exchange?
Matt Camuso:
This is.
Bilal Little:
Come on.
Matt Camuso:
Especially in this amazing room you got here.
Bilal Little:
Are you serious, this is your first time?
Matt Camuso:
This is quite the treat.
Bilal Little:
Come on.
Matt Camuso:
After all these years, this is actually my first time here.
Bilal Little:
That's insane.
Matt Camuso:
Yeah.
Bilal Little:
We got to get you some time here.
Matt Camuso:
Yeah. I mean, I need it.
Bilal Little:
The Exchange is crazy, man. It's crazy.
Matt Camuso:
Just walking in, the history behind it-
Bilal Little:
For sure.
Matt Camuso:
... is awesome.
Bilal Little:
For sure.
Matt Camuso:
Thanks for having me.
Bilal Little:
Yeah, okay. We got to jump in.
Matt Camuso:
Yeah.
Bilal Little:
So Matt, this is important to me. I think every guest should tell their own story. I just want to hear from you how you got to Baron. You're an industry veteran. Obviously you've been around at some very large shops, but it's important just to hear from you how you got to Baron and what you're doing in your role.
Matt Camuso:
Yeah. We had a session yesterday with our interns, and we kind of did a tell me about your career, and so this was timely to reflect on it. It's crazy how long it's been, and it's ... I'm just blessed to have found the ETF industry. So I started my career at State Street on the bank side. Amazing start, but quickly found my way to the SPDR ETF business in a sales job. So in 2012, roughly, that was my first kind of entrance or introduction to the ETF wrapper, if you will. Did that for a while and then got the opportunity to join J.P. Morgan and help them build their ETF business early on.
Same thing at BNY and really found my knack for not only helping our clients solve problems in their portfolios through our ETF solutions, but the knack for building a business inside of a large organization as they kind of evolve and migrate into this new wrapper. I am very excited to now have joined Baron Capital to do the same thing. Like we were talking about before we went live here. It's been about six months, so it's been a lot of fun. Time is already flying by, but the opportunity that this industry has brought to me personally, the relationships, you very much included, that I've been able to garner over that time has been amazing. And I still think, as they say with the ETF industry, we're just getting started.
Bilal Little:
We are, man. We are. Look, it's still about people, right?
Matt Camuso:
Mm-hmm.
Bilal Little:
So I think that's what's important. So talk a little bit about your role at Baron as head of ETF solutions, and then maybe expand a little bit about who Baron Capital is?
Matt Camuso:
Sure. So head of ETF Solutions, as I try and put it simply ... Actually with the help of AI the other day. Someone kept asking me. It was like this new title around the industry. I'm like, "All right, here is everything I do." And with the evolution of AI actually helped out, really driving the commercial strategy for our ETF platform at Baron. So cross-functional role across product marketing, sales, and obviously capital markets, which is very important for ETFs. This actually started when I was at J.P. Morgan for the first time that we see all these firms coming to the industry. It's very important to have that expertise within the firm, especially when we're newer to ETFs. But you don't need, as we like to say, an army of people.
So that's why I say cross-functional. It's almost a consultant for all of these existing business lines within Baron Capital that have been very successful over the years to help when it comes to the ETF product set. So if you look at Baron from a kind of firm history, 40+ years of active growth investing, very well-known. Obviously our founder and CEO, Ron Baron, just an amazing individual, started the business back in 1982 with I think $10 million, has grown it to over 50 billion today. Very well known for their mutual funds, but this was the next natural evolution. And if you talk to Ron, that's the same thing I just said about the ETF industry, he says, "We're still just getting started," right?
Bilal Little:
Yeah.
Matt Camuso:
Baron Capital's to be here for a very long time. And to do that, mutual funds are still very important, but it's about expanding our wrapper choice to clients, which includes ETFs, but also SMAs, CITs, and others. So again, 40+ year track record, active growth investing under one very simple investment philosophy. Bottoms up, research-driven, fundamental investing. As some have coined it old school, active management is what we've been known for.
Bilal Little:
Yeah. I think one of the best stories that I think I heard Ron Baron say is that you guys manage around 50 billion, but you guys have given back approximately 50 billion to shareholders.
Matt Camuso:
Yeah.
Bilal Little:
I think that's probably one of the strongest stories out there.
Matt Camuso:
I appreciate you bringing that up. Throughout getting to know the company early days when I started talking with them, it was abundantly clear from Ron, of course, is where the culture starts.
Bilal Little:
Yeah.
Matt Camuso:
But across the organization, I think a lot of folks like to say, "A client-first mindset." I will tell you, I've never seen such a client-first mindset. And one of the themes of our conferences, I think it was last year, again, I wasn't at the firm, so don't quote me on that, but I love what they coined it, which is changing lives. They take that very seriously, and that stems from Ron. But all of our portfolio managers, all of our analysts, everybody at Baron Capital has one mission that's to change the lives of our clients through, again, this very disciplined, tenured, consistent, bottoms-up, research-driven, active process.
Bilal Little:
The conference you're talking about, the client conference.
Matt Camuso:
Correct. Yeah.
Bilal Little:
So I'm going to tell you, so I got invited and I went. And I'll tell you, this was probably the best client conference that I've ever been a part of in the entire industry in my 20 years of being in this business.
Matt Camuso:
That's great to hear.
Bilal Little:
They had Tesla bots. This is six feet tall. They had every Tesla out there. They had comedians, they had lunch, and there was, I don't know, maybe 5,000 retail investors or investors of obviously Baron Capital there. And he went through material portfolio managers shared, and this was the first time I had seen at that scale end investors participate in a wealth management conference. I had never seen anything like it.
Matt Camuso:
I'll take your word for it because I haven't been to one yet, but I have heard. And that was one of the first things that I started finally being able to announce I was joining. The first thing that clients, legacy clients of Baron Capital would say, "Just wait to see the conference." But again, I think that goes back to just how much we care about that client-first mindset, sharing, transparent, giving folks the opportunity to engage with us in a setting like that.
Bilal Little:
I love this. Matt, let's switch gears a little bit. Let's talk about how Baron decides to, "Hey, let's get into the ETF business," because you just launched a little over six months ago.
Matt Camuso:
Yeah, so December-
Bilal Little:
Okay.
Matt Camuso:
... was when we launched our first five. As I said earlier, I think this is to start a natural evolution of our business.
Bilal Little:
Yeah.
Matt Camuso:
We're not the ones that will say the ETF is the wrapper of choice, even as the ETF nerd or veteran that I am. I've been coined saying that before. But coming in here, look, the ETF wrapper, as we both believe, of course, is an amazing technology-
Bilal Little:
For sure.
Matt Camuso:
... for investors, but mutual funds also serve a purpose.
Bilal Little:
Yeah.
Matt Camuso:
SMAs, again, CITs, like I mentioned. But we heard a lot from our clients, "We love your active management. We love the strategy a little bit more on the tax efficiency side." Perfect fit for the ETF wrapper, especially at this time where we see active ETF just continue to grow. Made just a lot of sense as our natural evolution next step to bring Baron Capital through the ETF wrapper. It also presented, and we're already seeing this very early days, an opportunity to engage with new investors that have never been able to access Baron Capital because they only preferred the ETF wrapper. So it was response to existing client feedback and giving clients that choice. Again, client-first mindset, as well as now this expanded opportunity to grow our market share.
Bilal Little:
Can you go a little deeper into the client feedback? How often or how do you guys consistently either survey clients or how are you getting or soliciting that feedback, "Hey, we want to hear or learn about ETFs"?
Matt Camuso:
So we do do ... I wouldn't call them surveys, but and I hate to say it's almost cliche. This is a natural part of our meetings with clients. What else can we be doing?
Bilal Little:
Yeah.
Matt Camuso:
What problems are you trying to solve that we can help solve for you? That also goes to product development. The recent two ETFs that we launched, so it started with five back in December. We've already launched another two, which I love to tell people. I hope this speaks to you like it was intentional for us. We are committed to this ETF business. This is not just a trying to catch a trend of the active ETF adoption, but we're hearing from clients, "Hey, I'd love your emerging market strategy or something similar in ETF."
Bilal Little:
Yeah.
Matt Camuso:
Launched BCEM back in April, I believe. Emerging Markets Select, kind of a more concentrated strategy of our mutual fund. Same team, process, philosophy. Our Risk Optimized Large Cap ETF, BROL, direct client feedback. "Love what you guys do. Can you do it within some sort of tracking error budget so I'm not taking too much tracking error risk?" Especially, which this one is designed for, those more institutional investors. Again, if you want to know what's going to meet clients' eyes, if you will, or get demand, just ask the client.
Bilal Little:
Yeah, yeah.
Matt Camuso:
And it's amazing how much they want to share with you. So not proper surveys, but just part of our natural engagement with our clients on a daily basis.
Bilal Little:
I think that's really important. I think I use the example of Delta. You catch a flight and before you get off the flight, you got a survey waiting for you like, "Hey, how did we do?"
Matt Camuso:
"How'd we do?" Yeah.
Bilal Little:
"How do we do?" So I love that.
Matt Camuso:
Yeah.
Bilal Little:
Keeping that sort of circle tight. Talk a little bit about what you're seeing in the ETF industry just at large and how you decide to bring these particular ETFs to market just at the high level?
Matt Camuso:
So from a trend, if you will, perspective, it used to be fun and unique to say, "Active ETFs are growing." I feel like we can't do that anymore. Let's just be honest with each other.
Bilal Little:
Right.
Matt Camuso:
So of course that one's happening. It is just truly amazing to see it continue to accelerate.
Bilal Little:
Yeah.
Matt Camuso:
Especially from us that joined back in 2012 where I remember the days walking into a meeting and saying, "I don't use ETFs. I use active management."
Bilal Little:
Right.
Matt Camuso:
That sounds like a hysterical comment at this point of our industry. Some things we're keeping an eye on, not from a product development perspective, but I think more in the ETF industry, the ETF nerd in me, if you will.
Bilal Little:
Yeah.
Matt Camuso:
We continue to test what's ETF-able. So this conversation on prediction market ETFs to me is fascinating because I think the knock-on effect to that ... No comment on if it works, should you invest it, et cetera. But you're now starting to look at what does the investor 15, 20 years from now look like?
Bilal Little:
Yeah.
Matt Camuso:
Can they do everything in their brokerage account? Do they want to access nearly everything through the ETF wrapper?
Bilal Little:
Yeah.
Matt Camuso:
I think that presents a lot of opportunity for those types of products if it were to come to market and work. But it also presents an opportunity, as I mentioned earlier, for an expanded market share of issuers like us that are very old-school active management. We're not going to change our process because it's proven, it's-
Bilal Little:
For sure.
Matt Camuso:
We have conviction in it. But if newer investors start to use things like those ETFs, do they start to use things like the old-school active management? So that to me is a trend to keep an eye on. Another one I would say, going back to that expanded market share opportunity, tokenization, which is often talked about, at least in my experience very recently, this more fast way for settlement. I recently started to engage with a few folks around the industry, and you actually have another expanded market share opportunity. So those that are buying crypto or something in their wallets can now buy something that's tokenized.
Bilal Little:
Yeah.
Matt Camuso:
Mind-blown, right?
Bilal Little:
Yeah.
Matt Camuso:
So this is obviously a technology, it's for quicker settlement, et cetera, but it also is another opportunity to reach a new investor. Last thing I would say is still early days, becoming one of those more common talking points, but I do think the ETF is a share class. How many new issuers does that bring to market?
Bilal Little:
Yeah.
Matt Camuso:
I think we see a lot in the next three to five years. Not only from a existing business like ourselves as an issuer, having now the option to adopt an ETF share class of an existing strategy. But for those that are waiting on the sideline still, this is a really interesting way to come to the ETF market, which goes back to early days, man.
Bilal Little:
Yeah.
Matt Camuso:
This ETF flow and trend is just not even close in my personal opinion to-
Bilal Little:
Yeah. No. It's just getting going.
Matt Camuso:
Yeah.
Bilal Little:
It's just get started. Yeah. Let me comment on a few of those things. I think you bring up some interesting points. The first is tokenization. The one that always sticks in my mind, and I've just thought about this for the last few years, is the need to dually cross-register globally.
Matt Camuso:
Yes. Yeah.
Bilal Little:
And then also from a market-making and sub-creation unit size, when you start thinking about fractional ownership, you're talking about really expanding the pie and that digital ledger is going to allow that to happen.
Matt Camuso:
Such a good point. Such a good point. Yeah.
Bilal Little:
So I think that was one. And then the other is thinking about the development of the retail investor or this new investor that has a financial advisor, but they also have this do-it-yourself approach to either testing out new ideas that they've heard from a friend, or they might've gone to a conference, or they might've read in the paper, there's a new strategy that's out there. I think that also expands the pie. And then lastly, bringing in legacy mutual fund managers with this ETF share class. Like, "Hey, now is definitely the time. Maybe we should have this conversation."
Matt Camuso:
Just bolt it on, right?
Bilal Little:
Bolt it on.
Matt Camuso:
I don't have to clone it.
Bilal Little:
Correct.
Matt Camuso:
I don't have to convert it.
Bilal Little:
Correct.
Matt Camuso:
Now I can just bolt it on. Still a lot ... Again, somewhat common knowledge now, but there's a lot to be figured out operationally still, which is why we are filed for exemption to do this.
Bilal Little:
Nice.
Matt Camuso:
We do not actually have any plans right now-
Bilal Little:
[inaudible 00:14:27]-
Matt Camuso:
... I would say, with confidence to do it.
Bilal Little:
[inaudible 00:14:29]-
Matt Camuso:
But again, client feedback we get, we could do it. I think once we see that adoption ... What we like to say is when we move, we move with intention.
Bilal Little:
Yeah.
Matt Camuso:
We can move fast.
Bilal Little:
Yeah.
Matt Camuso:
But we want to do it the right way.
Bilal Little:
There's a quote that I'm going to butcher, but I think Ron says he invests for decades, not days.
Matt Camuso:
Yeah. Yeah.
Bilal Little:
But not days. Something like that.
Matt Camuso:
Yeah. Yeah. Yeah.
Bilal Little:
Right?
Matt Camuso:
Yeah.
Bilal Little:
And I just always like ... He's just so smooth when he talks, so I always see that. But I want to ask you a question because you guys are known for having a very strong early investment relationship with Elon Musk, and I'll just keep it high level because the flagship RONB ETF-
Matt Camuso:
Don't you love the ticker?
Bilal Little:
It's so smooth.
Matt Camuso:
Yeah.
Bilal Little:
It's so smooth. I mean, they did that right.
Matt Camuso:
My favorite is Ron also loves it.
Bilal Little:
[inaudible 00:15:16]-
Matt Camuso:
[inaudible 00:15:17] his excitement of like, "I have my own ticker," was one of my favorite things when I joined.
Bilal Little:
That is so smooth. When I went to the conference, it was the first time obviously I heard Elon speak directly to an investor base. You guys have had a legacy relationship there, and this was one of the first ETFs that actually had exposure to SpaceX early on. Can you talk a little bit about that legacy relationship and just how unique that is for Baron Capital?
Matt Camuso:
Sure. So there was a couple ETFs around the same time that I'm not going to say they did it as a marketing play, but it was very timely in how they did it and they did it through different routes. So SPBs or others. Why I start there is we were thrilled with the adoption, the attention we got for innovating, brand new as an ETF issuer, but this was by design. RONB, the first principles ETF we're speaking about is ... From a high level, all of our ETFs are an extension of an existing strategy we have at Baron Capital.
Bilal Little:
Yeah.
Matt Camuso:
RONB is an extension of our Baron Partners Fund and our Baron Focus Growth Fund. Focus Growth managed by David Baron and Ron Baron. Partners managed by Michael Baron and Ron Baron. First Principles, we have Ron, Michael, and David on the strategy.
Bilal Little:
[inaudible 00:16:29]-
Matt Camuso:
So if you combine those two strategies together, you get First Principles, which is this more all-cap growth portfolio. Why I go into all of that is SpaceX is existing at the time in both of those strategies.
Bilal Little:
Gotcha.
Matt Camuso:
So again, naturally we're putting it in here, but it's from an investment philosophy perspective and not this will be the biggest IPO we've ever seen. Let's put an ETF for the first time. Again, very proud of how we did it. As we can tell the first ETF issuer to put direct shares of a private company up and through IPO, add shares at the IPO.
Bilal Little:
Wow.
Matt Camuso:
And we didn't see a blip in terms of liquidity execution or anything.
Bilal Little:
Wow.
Matt Camuso:
So it was a Herculean effort across all fronts.
Bilal Little:
For sure.
Matt Camuso:
And oh, by the way, it was the biggest IPO in history.
Bilal Little:
Yeah.
Matt Camuso:
But this was by design from, and you mentioned hearing Ron speak a few times, he's got some conviction in this company and it's not for today. It's not for just at the IPO. This is 10, 20, 30 years from now, going back to his comment of decades view in investing. So it was a natural evolution of the business to launch the ETF platform. It was a natural evolution of our strategy with first principles to have SpaceX in there. Again, did it with intention, understanding from a regulatory perspective and checking all the boxes to make sure if we were to do this, we can do this in the right way, which again, very proud to say we did and executed well on it. What I would just end with is from a going back to investment philosophy perspective, it's great to see that adoption early days. Now we had some big inflows and outflows. That's just natural, right?
Bilal Little:
Yeah, for sure.
Matt Camuso:
Especially with an exchange traded vehicle, anybody can access it, is to listen to not only our analysts, but Ron and other PMs that own it, listen to their conviction, as well as what else they own it alongside with.
Bilal Little:
Yeah.
Matt Camuso:
So it's a pretty volatile stock to start. That was expected. In first principles, you'll notice a very high-financials exposure. Again, by intention. It's a nice dampener to volatility for these other more speculative growth names that can bring more [inaudible 00:18:38]. So yes, it's a very big weight. Yes, now it's a public company, but it's that PM and expertise of Ron and Michael and David to know how to hold that, how to size it, and what else to put alongside it that I think is the real benefit of the strategy.
Bilal Little:
[inaudible 00:18:54] portfolio management at it's finest.
Matt Camuso:
Yeah. A longer answer to your question.
Bilal Little:
Yeah. No, no. It's perfect. It's perfect. Did you know there were over 1100 ETFs launched in 2025? How do you make sense? How do you find the tools and resources to compare, contrast strategies? That's why there's etfcentral.com. It's a website where there's tools, resources, and a way to track and monitor your portfolio. Please visit etfcentral.com. I actually want to stick with this because we're talking about transformative technology effectively. I can't let you leave without throwing obviously the AI question your way and sort of what you guys are seeing or hearing just at the macro level. You don't have to go too deep into anything, but I'm just curious what your thoughts are on it?
Matt Camuso:
So a number of our PMs, but I'll quote Mike Lippert and Ashim Mehra, who are co-PMs for our Baron Technology ETF, just brilliant, brilliant individuals, very well versed within the technology space. So I think it's really compelling to hear them say this is the fastest-moving trend they've ever seen.
Bilal Little:
Yeah.
Matt Camuso:
So we see that day-to-day. From a opportunity set, clearly it's there, but it's understanding that the mega caps that are concentrated in these indices are through passive ETFs, yes, are beneficiaries. There's a lot of other companies-
Bilal Little:
A lot of other companies. Yes.
Matt Camuso:
... that are benefiting from it as well, right?
Bilal Little:
Yes.
Matt Camuso:
So we just recently wrote a white paper about our Baron Technology ETF. Understanding passive investing is backward looking where this is not to say active versus passive. I think passive has its place, and we all believe that. But are you missing the tech leaders of tomorrow by looking or only investing in an index that's looking backward? And so we bring one company to mind as just one of many examples, Lumentum, which is an optical and photonic company. We started investing in Lumentum in BCTK back in September of last year. It just recently got added to the S&P 500 this year. In that very short timeframe, Lumentum was up over 300%.
Bilal Little:
Wow.
Matt Camuso:
So is it a sound strategy to ... Yes, again, passive at its core can work, market efficiency, all the studies and research is out there. However, is it also fit to then compliment, peel off some of that exposure, and invest in an active strategy with the expertise, intuition, research, analyst teams behind them to find other opportunities across capitalizations, market capitalizations, across geography? So BCTK is a global all-cap strategy. Up to 35% can go international.
Bilal Little:
Okay.
Matt Camuso:
Roughly today we have 20% roughly international. We have about 25% in small and mid-caps.
Bilal Little:
Okay.
Matt Camuso:
So going back to a lot of our conversations, S&P 500, NASDAQ 100, whatever that core passive might be, great opportunity to compliment some of that with the technology because of the opportunity with this very fast pace-
Bilal Little:
For sure.
Matt Camuso:
... of innovation through AI.
Bilal Little:
And how active are you guys in the portfolio? I mean, are we talking quarterly changes? What's the rotation, if you got any general view?
Matt Camuso:
So our rough average holding period I think across the firm is eight years.
Bilal Little:
Oh, wow.
Matt Camuso:
Going into an investment, kind of the check the box before we're even going to consider putting it into a strategy is do we think we can double our investment in a three to five-year time horizon? Goes back to that long-term investment philosophy.
Bilal Little:
Yeah.
Matt Camuso:
Lower turnover, but there's times like in Q1 of this year where there's opportunity across the software sell-off to add and trim names. So at times we might have a little bit more turnover, but I always like to go back to this conviction piece because you're seeing a lot of active ETF growth in these more systematic strategies that are benchmark plus or minus. That's not us. Like I mentioned, old school active.
Bilal Little:
Yeah.
Matt Camuso:
So BCTK, to stick with that one example, from a strategy perspective, 50 holdings.
Bilal Little:
Okay.
Matt Camuso:
Relative to a NASDAQ 100-ish exposure, 70% active share. Some of our strategy have 95% active share.
Bilal Little:
Yeah.
Matt Camuso:
This is active management.
Bilal Little:
Yeah.
Matt Camuso:
But it's lower turnover with a long-term investment philosophy, which can only be done, again, with expertise, but rigorous company engagement.
Bilal Little:
Yeah.
Matt Camuso:
And we're engaging with companies for years before we're making that initial investment, which I think is key to have this kind of high-conviction, high-active approach with low turnover and that long-term mindset.
Bilal Little:
I love that. I think this is a turning point for active management. Obviously the products that continue to launch are active, but what we're seeing now is active management is really starting to have its day, meaning outperformance. We've now passed this beta trade, and we're looking at really talented money managers uncovering new opportunities, especially when you start thinking about that entire AI stack or these different dimensions of tech that can really lean into driving meaningful outperformance. So I think that's important. I want to get just a quick picture from you of what does your ETF stack look like today? And then what does it look like in the next year and a half in your opinion?
Matt Camuso:
Yeah. So today, seven ETFs.
Bilal Little:
Okay.
Matt Camuso:
All active, of course. Roughly 750 million in [inaudible 00:23:57] under management. So again, fast start seeing this natural, organic adoption, which has been great. So again, natural extensions of everything that we do here at Baron Capital. We had two mutual fund ETF conversions. BCTK, the one we've been talking about, was one of those mutual fund ETF-
Bilal Little:
Okay.
Matt Camuso:
... conversions. So it does bring a longer track record. And our financials ETF BCFN was also a conversion. Again, the rest are an extension of something else that we're doing at Baron. The one kind of outlier there is this risk-optimized strategy, BROL, which by client design or demand, we designed a strategy that's very Baron DNA, bottoms-up fundamental, everything we talk about, but with some risk controls around it.
Bilal Little:
Yeah.
Matt Camuso:
So seven right now. Already having conversations. I joined Baron for a whole host of reasons. One was to move fast, especially in a fast-moving market. Again, we'll move fast. We'll move with intention. I could not believe when I joined, we're doing two more-
Bilal Little:
Wow.
Matt Camuso:
... already. And now conversations probably into next year. I think seven right now is ... We're having a lot of our categories or we're seeing demand already filled. It's kind of focus on these, start scaling these, but already having conversations of what's next. Looking maybe to start with another conversion.
Bilal Little:
Okay.
Matt Camuso:
Second idea would be expanding on this risk optimized set, so this is not it. I think it's it for this year, maybe.
Bilal Little:
Yeah.
Matt Camuso:
You never know, but certainly plans to grow into the future.
Bilal Little:
What concerns you about the growth of the ETF industry? Is there anything out there that's like, "I'm a little concerned about that. Where does all this product go"?
Matt Camuso:
So I saw a stat the other day, 1500 roughly active ETFs from the start of 2025 through June or end of Q2 this year. Guess how many of those ETFs have over a $100 million?
Bilal Little:
Out of the 1500?
Matt Camuso:
Mm-hmm.
Bilal Little:
I'd say 500.
Matt Camuso:
260. And some of those were right product, right time. It is possible.
Bilal Little:
100%.
Matt Camuso:
Others where we have a model portfolio, we're going to put this in, so I would just call it not natural adoption.
Bilal Little:
Yeah.
Matt Camuso:
Why I go to that is we both know having spent years in this industry-
Bilal Little:
Sure.
Matt Camuso:
... it's competitive.
Bilal Little:
It's hyper-competitive.
Matt Camuso:
It's only getting worse.
Bilal Little:
Yeah.
Matt Camuso:
And so but I think a lot of education's still needed. I only call out $100 million not because I believe that is scale and success.
Bilal Little:
It's a fair threshold.
Matt Camuso:
The industry does.
Bilal Little:
It's a fair threshold.
Matt Camuso:
I fundamentally disagree with putting a number on it. People look at product viability on AUM.
Bilal Little:
Yeah.
Matt Camuso:
AUM's one piece of it, right?
Bilal Little:
For sure.
Matt Camuso:
AUM times fee is revenue. How costly is it to run the product? Is it a viable product? Et cetera. Won't bore your audience with those details.
Bilal Little:
No, no, no, which is fine. It's important.
Matt Camuso:
But that, I mean, I wouldn't say concerns me. From a liquidity standpoint, what I love about our industry, we always figure it out.
Bilal Little:
Yeah.
Matt Camuso:
We're already seeing more market makers come to market. Our market-making partners are phenomenal across the board, but you need seed capital. You need liquidity providers watching your strategy. So I guess my one concern, it's not seeing huge risk of this today, but if it continues, as I mentioned at the beginning, you need expertise within your firm about the ETFs.
Bilal Little:
Yeah.
Matt Camuso:
A big function of that is capital markets. And we have our shared friend, Bryan Moore, running our capital markets [inaudible 00:27:13]-
Bilal Little:
Oh, man. Oh, we got to shout him ... I'm going to call him on camera. Bryan Moore-
Matt Camuso:
Legend.
Bilal Little:
... he is the legend-
Matt Camuso:
Legend.
Bilal Little:
... in the business. Yes.
Matt Camuso:
But you need that expertise. We watch our ETFs, we both do and back each other up, tick by tick, right?
Bilal Little:
Yeah.
Matt Camuso:
And you get to see when that's getting outside of its basket. And again, not to go into details, but the concern going back to that is, is someone going to use an ETF for the first time and have a bad experience because there's just so much product or just be so overwhelmed that I don't know what to choose from?
Bilal Little:
I think that's the bigger issue, and I think that's why we built or why the New York Stock Exchange built the ETF Central platform.
Matt Camuso:
It's important.
Bilal Little:
I think it's a very important platform just to be able to do some research on different ETFs, compare, contrast. You can obviously build watch lists. But I think just discovery. To your point, most people start with the ETF journey with S&P 500 and the Triple Qs or something like that. But you're talking about this extension of product availability, and then I think what's missing, to your point about education, is portfolio construction dynamics. Our veteran in the business, you know speaking with financial advisors, you're having that conversation. The end retail do-it-yourself investor, they're not having that conversation. They're loading up probably on one trade and they don't even know that they're loading up on one trade.
Matt Camuso:
Yeah.
Bilal Little:
So I think that's a part that's missing [inaudible 00:28:31]-
Matt Camuso:
I think the responsibility falls on us as the issuer to provide that education.
Bilal Little:
Yeah.
Matt Camuso:
That's why I always say in these settings, just again, thanks for having us on because I do think this conversation in general is very important. Reach out to us.
Bilal Little:
Yeah.
Matt Camuso:
We are eager to talk to you and help you figure out ETF mechanics, ETF trading best practices. Of course, our strategies, how they fit in a wrapper. And I just encourage everybody, take people up on that. It's not just us as an insurer.
Bilal Little:
Yeah.
Matt Camuso:
There's so many great issuers out there that offer the same, but ask the question, because it can at the surface look very overwhelming with the development of our industry right now. But I think once you can engage with an issuer, we'll help you sift through some of the noise of some products coming out there. Again, fit for some. Not fit for others-
Bilal Little:
[inaudible 00:29:12], yeah.
Matt Camuso:
... single stock, et cetera. Great tools. But if you snuff out what you're looking for from a solution, going back to client first, what are you trying to solve for? We can really whittle down that universe quite quickly and give you at least some guidance on what the next step might be.
Bilal Little:
All right, Matt, we've gotten to a point where I give you a [inaudible 00:29:33]. I say, what's the ETF underdog? What's in the lineup that it may not have received as much industry traction, AUM, people aren't talking about it, but you're like, "Hey, this is a bit of a dark horse that I think will have traction in time"?
Matt Camuso:
Yeah. I mean, with two kids, you're asking me to pick the other favorite kid. This one's tough. You say layup. I don't know. I'm probably the only one that struggles with it. So if I have to pick one that's just not seen a lot of adoption yet because it's newer, is our Baron Emerging Markets Select ETF. Michael Kass, again, absolutely brilliant mind, especially when it comes to emerging market investing. Why I love this, twofold. One, there's a huge opportunity for active management in emerging markets, right?
Bilal Little:
Yeah.
Matt Camuso:
Research just shows does not have to be your core. Another great compliment to a core passive because we're going to bring a very active approach. This one is unique in a couple senses from a Baron portfolio. It is still very bottoms up, but how Michael whittles down his universe, the very big universe in emerging markets, is finding themes he thinks are going to drive the next five, 10 years of alpha. And within those themes, find the companies that can be best positioned to capitalize on those. So I think active opportunity as well as a very experienced PM with a very unique process and intuition on finding what that next theme is going to be. Clearly right now it's defense spending, de-globalization, China value add with the AI trade. So I think that one is one to watch out for, but love all of my-
Bilal Little:
Of course. Of course. Of course.
Matt Camuso:
... seven children, and of course my two real children.
Bilal Little:
I like to ask that question because again, we have a product overload in many cases with the industry, and there are just so many ETFs out there. So I like to have a call-out every now and again.
Matt Camuso:
Appreciate that. Yeah.
Bilal Little:
And I'll wrap with this. This is my last question to you, so now we're going personal. You have no clue where this is coming from. I couldn't prep you if I told you. I just though about it.
Matt Camuso:
I love it. Yeah.
Bilal Little:
So I'm going to ask you right now. What's your earliest and fondest childhood memory?
Matt Camuso:
I would have to say being on the driving range with my dad. Still a huge golfer from him, so lost my dad when I was early 20s, but that one always comes back. Never forget smell of the grass. You remember everything, but that would definitely be the one. Don't get me choked up right now. That's a very good question, but that's definitely the one.
Bilal Little:
Thank you for joining ETF Central, man.
Matt Camuso:
Thanks for having me.
Bilal Little:
Good to see you, my man.
Matt Camuso:
Good to see you.