Speaker 1 (00:01):

Welcome to ETF Central recorded here at the New York Stock Exchange, the home of ETFs. We're diving deep with the people shaping the space, the technology's driving innovation and the stories behind the tickers. Whether you're an investor, issuer or industry insider, welcome home.

Speaker 2 (00:28):

Welcome to another edition of ETF Central where we unpack the stories, the data, and the science behind what's going on in the global investment market around ETFs. I'm your host, Bilal Little and I'm really excited about our next guest. His name is Eric Fine, global head of emerging Market debt at VanEck. What's really exciting about this particular conversation is it's one of the most complex parts of the fixed income market, and I'm really excited because he's going to unpack some of that complexity and simplify the message and maybe demystify what's going on in emerging market debt. Welcome, Eric.

Speaker 3 (00:57):

Thank you, Bilal.

Speaker 2 (00:58):

I'm glad you were able to make it down.

Speaker 3 (01:00):

It was great being here. My first job on Wall Street was right around here, couple blocks away

Speaker 2 (01:05):

Really? When the last time you were here At the exchange

Speaker 3 (01:08):

For my bootcamp. I do a summer finance bootcamp sixth year and this year NYSE gave us a Ring Belling tour, so it was very exciting. It was my first time. I've been on Wall Street for over 30 years, had never been inside NYSE until last year and thank you NYSE

Speaker 2 (01:28):

For. What was that like for you? What was that feeling like?

Speaker 3 (01:30):

It was really exciting seeing actual companies and the little lucites that you have of 'em and the issuance, just the company creation because what I do, I'm behind a desk and screens pretty much for 30 years and meeting government officials

Speaker 2 (01:45):

And

Speaker 3 (01:46):

Clients and so to see actual stocks and companies get created was very, very cool. I took a lot of pictures, sent 'em to my family.

Speaker 2 (01:54):

It's always exciting still to come to this building even for me, right? I mean you're talking about capital formation at its highest level, so it's always exciting. So I'm glad you enjoyed it. Any country in the world

Speaker 3 (02:03):

Would do anything since we take it for granted.

Speaker 2 (02:07):

Absolutely, Eric. So it's important to me for me to get a good sense of who you are and to make sure that the audience understands who you are. You have a phenomenal background. I actually enjoyed reading about you. You have a background from policy to now running emerging market debt. Give a sense of what that journey was like for you and how you became a head of emerging market debt over at Finac.

Speaker 3 (02:29):

Yes. I kind of had an unusual background, I guess for an American. I was born overseas, grew up in Switzerland, Thailand. My dad was a spy during World War ii, both for depression, grew up in the depression and a lot of things happened. My dad was born 1914, my mom 27. Evan, as I said, my dad was spy and then a career diplomat and economist, and he was MacArthur's economist for the eight years of the Japan US Occupation of Japan. My grandfather on my mom's dad, I also as with my dad depression era and worked in a bar and he had a fishing buddy named Harry Truman. And so my mom was Harry's President Truman's secretary as vice president for about six months. She got the call from Eleanor Roosevelt when FDR died and patched it through to what she calls Harry. And then she was a career diplomat. So that's grew up overseas and that was my mindset and my dad was a PhD economist and out of the personal stuff I got out of that was when I came to America, I looked at America and every country with really a great more a distance than anyone

Speaker 2 (03:56):

Who was here a little more objectively. Yeah,

Speaker 3 (03:57):

Well, objective is one word I think fair. But for my friends, my new American friends, I'd grown up in different kind of places. My reactions to things were very unique and different, but what I learned is I loved looking at countries. Now the other thing is I want to eat, and I had two depression era parents and working and having a living was my main job in life. But I did like politics was very active in politics early on in my earlier in my life. But one thing about politics that I realized is everyone thinks they're right forever regardless of outcomes. And that's very frustrating if you're kind of serious or academic, but in emerging markets. So I worked for the US government in Russia. I went and did my education, worked for the US government in Russia. The Soviet Union fell apart and a group called Harvard Institute for National Film that says we can do some stuff for the US government. And the US said, okay, and the us, this was a weird time. We're more or less colonizing Russia. There's a very unique period in history. Yeah. What year are we talking? Early nineties. Okay. So Yeltsin was the president, the key prime minister at the pinnacle of this influence, I would argue would be Yegor Gaar,

(05:21):

Big reformer, doing all sorts of great things. The Wall Street Journal praised flat taxes floating the exchange rate, independent, central bank, really, really basic stuff. Or they were trying to do that. It eventually happened decades later, but this is nineties. And one of the things that the Russian government and the US agreed with on was voucher based privatization. All these companies were state owned, so you needed an NYSE. Well, they don't have one, so how do you do it? Well, we built a system. So 33 cities, 13 time zones. We built in about three years. It was the first securities clearing system in Russia, and it's still there. I don't know if the exact tech, but this is hardware. So you just stuck software like Swift, like the SWIFT messaging system. You put that stuff on the physical but wanted to get into markets, right? I wanted because the policy and politics thing was really interesting. It's really important, but no one was ever right or wrong, and I don't know what a field like that is. And do

Speaker 2 (06:33):

You recall that exact moment that you were like, okay, I need to be on that side of the house?

Speaker 3 (06:39):

It was in school, in graduate school, and the school didn't like it. They didn't like people like me going into the private sector, but it was always my parents' advice and other folks of that generation. I got a lot of friends who come from that world and almost all of 'em said the business has changed, right in their days. You got to ahead by winning, now you kind get ahead by

Speaker 4 (07:08):

Doing

Speaker 3 (07:09):

Different things, getting a bigger budget, it's a lot more. Everything is a critical objective, so nothing really is right and during wartime, and it's a very, very different culture. And also they made the point that the private sector will give you a lot more. So if you want to go into the public sector, you'll be a lot more valuable. Great point. Great point. But yeah, so I wanted to find a place where I could maintain thinking about politics and policy and political outcomes and emerging markets is perfect for that. Everything starts with policy and politics. So you get the politics and then you get the policy outcomes and you get the economic outcomes and then get the asset price outcomes. And as a sell side economist, which I was for 14 years at, well, 10 years at Morgan Stanley than I ran prop trading there. That's your entire job is here's the policy, here's the economic outcomes, here's the asset price outcomes, and you're right or wrong, and you put a time on it and started in research at Morgan Stanley 10 years and always knew I wanted to pull triggers, but I thought, and I think it was correct, that I really needed to learn it from a research standpoint and been at VanEck for 16 years and manage a variety of strategies. And it's more or less, it's completely the same thing, doing the same type of analysis, just the world changes, the country changes all the

Speaker 2 (08:43):

Time. So unpack your current role as head of emerging market debt at VanEck.

Speaker 3 (08:48):

Yeah, so I'm responsible for managing the actively managed EM bond funds. We obviously interact with large parts of the firm, and it's a great place where idea generation is very much valued. We have a variety of strategies. We launched an ETF in Australia, exact same version of the strategy with obviously it's an Aussie dollar for the Aussie market, so it has different conventions. We have a variety of SMAs and we have an actively managed use it in Europe. Also, A number of investors have reached out to us and they've asked us to start specialized versions of the fund. And so we have a few SMAs. So we manage those and that's what I do.

Speaker 2 (09:30):

Love it. For those who are less familiar with VanEck, who would you say VanEck is?

Speaker 3 (09:36):

It's a great and interesting company that goes where the puck is going. If there would be one sentence for that. So in 1955, it started the world's first international, the United States' first international mutual fund. Remember Templeton's, a Canadian company. So it was a emerging markets equity fund. You could argue it focused on European companies after World War ii, this was managed by our CEO's, father John Vack, who as Jan likes to joke, what do you do if you're really busy at work and you have a growing family? You go and try to get a PhD in economics, which he did under Von MiSiS at NYU. And that's when the light bulb went off on the gold miners, which is another big phase of Van X development.

Speaker 2 (10:36):

Absolutely.

Speaker 3 (10:37):

And then Jan comes profoundly into the story because ETFs became a thing and VanEck had the best actively managed gold fund. So the question is, do a passive ETF that competes with this great thing that we have? And Jan's answer was yes, and the rest is history. It's biggest gold mine company in the world, and this extends to the current day with crypto and EM debt and a number of other ventures. Yian is always moving and always on cutting edge.

Speaker 2 (11:20):

Well, look, I think that's fantastic, right? Your firm should always be innovating to a certain extent, and if they've built their pedigree off of innovation as far as undiscovered markets, it makes sense, right? So the ETF wrapper is just an extension of that. So before we dive into some of that stuff, I do want to sort of take a step back and get your broader perspective on fiscal policy and the way investors should even consider and look at emerging market debt. I believe it's an area that presents a lot of opportunities, but for most people it's still nascent and a little complex in their views. So how would you simplify the message given the fiscal backdrop and the opportunity set?

Speaker 3 (12:04):

Yeah, Bilal, that's a great setup. I think you kind of gave the answer. I would set it up as a fiscal issue. What do you read about in a newspaper every day debt is too high and the interest rate is too low because the central bank has too many targets every day for not months, maybe arguably a couple of years, arguably since the G ffc. Absolutely right. So that is called fiscal dominance. Economics has an answer for this. When debt government debt is so high that the central bank either formally or practically loses its ability to solely focus on inflation because they will bankrupt the government and financial stability and common sense are obvious

Speaker 2 (12:48):

Constraints.

Speaker 3 (12:50):

That's called fiscal dominance. And that's the way to understand the world. Now, what happens if you have a high debt level and a central bank that's not maintaining high real rates to prevent inflation? Well, you're going to get higher inflation in that country. Well, has that happened? Yeah, US has maybe is risking a stagflation scenario. Now that all sounds really, really bad. There's no winner so far in the story if you're a dollar based investor,

Speaker 4 (13:23):

For sure.

Speaker 3 (13:23):

Well, but let's look at the other side of it. Are there countries with good fiscal policy whose central banks have always maintained high rail rates? Yeah, they're called ems, mostly the Asians. They're the best of the

Speaker 4 (13:36):

Best.

Speaker 3 (13:37):

But a number of the Latins and a number of the central Europeans, most of the central Europeans to one extent or another have. And so in a world worried about high levels of debt and a central bank that really can't focus solely on inflation, where most investor money is, there are countries that have low levels of debt and central banks with high real rates. So therefore low inflation. And now if you look in particular at China, China has arguably deflation, but certainly disinflation much lower than the us. Well, what does economics tell you? When two trading partners one country, the US has higher inflation than the trading partner country? Well, that currency, the US currency should weaken by the inflation differential. And the bank for international settlements measures this through their real effective exchange rate. And it says the Chinese want is 30% undervalued, undervalued. So that's also where the rubber hits the road. So conceptually, debt matters because central banks matter for the money. And that's why the biggest, and this is arguably the biggest thing happening, because if you take, let's go back to the beginning of this year, 2025, what were all the cool kids saying Trump tariffs version two means EM is destroyed, their EM FXs have to go

(15:06):

Weaken in order to keep export stimulating. What happened? The exact opposite and the market is still struggling for an answer to that question. The answer is fairly straightforward. These countries are in good shape. Largely speaking, you had Malaysian ring at rallying 7% in one day. You have Hong Kong dollar pricing in appreciation even though it's a peg,

(15:26):

Mainly because so much money was reshoring. What was up with that? What happened? What happened is I think fairly straightforward. These countries have been for 30 years accumulating massive surpluses and dollars. They're up to their nets in dollars. That's the starting point. Now you have tariffs in the tariff discussion. Do think these countries, do you think there's a currency chapter of the discussion? Yes. Do you think it's going to be emailed as a press release? No. The gist of it is going to be something along the lines of, I hope when we walk out this room, you're not going to devalue your currency 20%. Right.

(16:06):

Okay, so pretend I'm an Asian reserve manager, I'm up to my next in dollars and I know from my meeting that the dollar is going to go down. What do you do? You reduce your dollar exposure and you don't sell your securities themselves immediately. That takes longer like your actual stocks and bonds. But Deutsche Bank had a great report talking about the FX hedging that reserve managers have been doing. Bottom line is EM local currency bonds were up 15% this year, and CNY has been stronger than the economist prediction almost every week since November of last year. So that's why it matters is it's thematic. You can see it in the newspaper and it has real implications, which is central banks are not just buying gold because of this phenomena. They're buying other reserve currencies that deserve to share that status with treasuries.

Speaker 2 (17:04):

That's a very fantastic breakdown in point because you talk about opportunity and I think most investors are looking for opportunities and when they lean into attractive money managers, the goal is to identify the ones that can actually do that effectively. What have been your biggest surprises to start 2025 as we're coming to a close and possibly some of your disappointments along the EM spectrum, EM debt spectrum?

Speaker 3 (17:34):

Yeah, the biggest surprise is how most of the cool kids still aren't accepting what's going on. There is huge denial. It was in April of this year, we go to IMF meetings, been going for 30 years. And our biggest takeaway in our IMF takeaways for the spring meeting that ended in April was it is no longer taboo to talk about dollar and treasury status reserve status.

Speaker 2 (18:04):

Absolutely.

Speaker 3 (18:05):

We've been talking about it, couching it carefully and we have a view which is the dollar's not losing its status, but it will share it

(18:12):

With other deserving currencies. That's the right framing. And at that IMF meeting, I made a bet with a friend of mine that, and the market was so negative on CNY at the time and bet I meant a gentleman's bed. I'm not breaking the law bed, but I'll buy you a beer kind of be. And the bearishness, namely the consensus view was so much that CNI had a weaken. I was given even odds if CNY was below eight, it's low sevens right now, and to this day I've offered to buy the debt back, meaning let him buy it back for nine tenths of a beer or 9.9 tenths of a beer and there's refusal. So the surprise is this reluctance to see CNY as a future reserve currency. That's a big shock. My biggest disappointment is Argentina, not in us. We didn't own it. There was too much joy on it. The politics were way ahead. They needed to have floated the currency at the beginning right after they got elected and they didn't. And what's frustrating is everyone in government knew this and still just walked right into this blender. And it's really frustrating when you've seen a movie a bunch of times watching smart folks that are doing a lot of good things walk right into a blender Now we like Argentina now because the price went down a lot and it's a much more confusing trade now. So a lot of the popularity went out.

(19:57):

But yeah, Argentina would be a disappointment, but it's more just a disappointment in humanity that we keep having to go. I guess maybe one important takeaway for you, and you get it Bilal from your questions, is that if you're confused or want to know what's happening on planet earth economically and financially, the big variables talk to an EM bond person doesn't have to meet me, right? There are others, but that will help you understand that the right way to look at it is there are some over indebted developed market countries. Japan is one of them. France is obviously one of them, the US is one of

Speaker 4 (20:35):

Them.

Speaker 3 (20:36):

And then there are a bunch of others that have the exact opposite characteristics. And those are winners. That's the right framing because what most markets are focused on is Euro, dollar, Euro and dollar y. And that is not going to be information rich.

Speaker 2 (20:56):

So I'm glad you brought that up because I think it brings us to a part of the conversation where it gives you an opportunity as a portfolio manager to explain the value proposition and insight from corporate and government debt at the EM level and let that be as broad as you want to articulate this point because you're going to be able to explain growth opportunities, I believe insight to your point, as well as risks to be concerned around obviously too much debt and or not enough growth in said market. So just explain the difference and how people should consider both corporate and government debt on the EM side.

Speaker 3 (21:42):

And

Speaker 2 (21:42):

You can use a country if you want to be specific, just to give an example.

Speaker 3 (21:45):

Yeah. So I would say the right way to do emerging market bonds is along the lines that you're asking Bilal. And number one, I think it is to include all types of emerging market bonds. So EM bonds for 20 plus years have outperformed treasuries in the ag on an outright or volatility adjusted basis if you include sovereign bonds, so local sovereign bonds and dollar sovereign bonds. So, but institutional investors and investors haven't always had good experiences investing in EM bonds. Why is that? Often the decision is made, oh, I like em. Why? Because they have low debt and the yields are higher, whether it's in dollars or local. And then the conclusion is, and I'm going to do it all only through local currency, why are the yield is higher and I really like it, or only through dollar. Why? Well, some reasons And that decision, we think that there's, institutions are increasingly looking to blend funds in which they can say yes, we get it. Everything you and I just talked about, we get it and we've come to the same conclusion. You can see it in the newspapers, right? People are moving, the asset allocators are going to move in this direction, but we don't want to bet it all via one particular vehicle. For example, when the cedar for our mutual now ETF mutual fund, now ETF came to us, they wanted it to be local currency only.

(23:26):

We told them, no, you don't want that. You want a fund that's flexible. And they were obviously happy with our advice because local currency hasn't done well for most of the life of this fund. Now we like it a lot right now and it's important to note which local currency, we had a lot of exposure to Asia, which did really well in the last six years without really blinking.

(23:50):

And so it really gets into the bottom down corporates. But number one, I think the right answer to your question is it's very attractive and logical to capture all of the alpha and EM because through a blend fund where the manager decides how much local, how much dollar sovereign and how much corporate, and I'd say that's probably the most important point. I'll give you another example. A lot of Asian institutions bought the case for EM bonds. And what did they do? They overdetermined it. They said, okay, yeah, we're going to do it, but it's going to be only Asia, which worked out for their sovereign allocations. But you were asking specifically about corporates, they were up to their next in Chinese corporate bonds at a hundred cents called investment rated investment grade. That space never showed value to us. And that'll be kind of the last way of answering your question. I'll tell you about our process. And China's a really good example as you asked for an example, we were mining our own business, not hurting anyone and had nothing in China, certainly not in corporates because they didn't even show up in step one of our process, which tells us what's cheap

Speaker 2 (25:07):

Wasn't

Speaker 3 (25:07):

Cheap, we want to get paid. That's number one. Absolutely. And then the property crisis happened and a whole bunch of things came up as cheap. Now we have a second step in our process, which is the world doesn't work that way. There are elections, there are policy risks that are non systematic risks. We have three categories for them. And so we began a checklist of, alright, these are the things we get that it's cheap,

Speaker 4 (25:34):

But

Speaker 3 (25:34):

We need to see that the government has told the banks to extend lending. We had a big checklist and we'd write about it to our investors every month and we built some very diversified but small exposure to Chinese corporates, they rallied and were pretty much out. The point of the story, I hope is number one, our process is bottom up, right? It's company by company, country by country. We don't say we don't like all of local or we don't like all of China and very bottom up,

Speaker 4 (26:13):

Very

Speaker 3 (26:14):

Bottom up. We don't say we like corporates or we like local or we will say the result is that. And China's a good example. Yeah,

Speaker 2 (26:23):

No, look, I think you just actually articulated the objective component of investing in your thesis and strategy. So it's completely unbiased in that sense. So that's important. But now I want to talk about risk, right? Because the risk factors in emerging market debt seem, and you alluded to some of this, they can be systemic, can be outside factor base, they can be very nuanced in many cases as well. Can you talk a little bit about that? Because to your point, look, tariffs to start the year, everyone would've said it's terrible time to a look at emerging market debt and just emerging markets in general and they've done exceptionally well. So talk a little bit about your thesis, your process and how you guys look at risk.

Speaker 3 (27:06):

Sure. Great question. So first on the risk inherent in em, I think that is the reason why I'm so excited about EM bonds is that's more or less a myth at this stage. That is when we launched our ETF in Australia, that was the way we presented it to institutional investors was dispelling the myths. You think of em as this and it's actually this and we can show it either in performance of the asset price or we can show it in terms of the economic developments. For the last several years, em local currency bonds have had lower volatility than developed market bonds. So just outright vol forget that their carry is often higher and their correlations with G 10 rates have broken down. When you ask someone on fixed income, what do you think of duration? 99% of the people in the world will give you an answer and they'll give you an answer based on their view on dollar duration.

(28:08):

But the duration in Mexican peso bonds is different. Their currency strengthening. So inflation, inflation expectation going lower, their interest rates should go down, which is exactly what happened this year. They're 30 year rallied a hundred basis points long before ours does. It wasn't looking at that because it's a different duration. Great point. And so that's another example of the diversification you get in em. I'll say two last things. The biggest thing on earth that's happening is what we talked about earlier, which is CNY is rock solid. That's who my countries trade with, right? Brazil trades with China, Chile trades with China, Malaysia, China, and they trade with China. So if that currency strengthening, that's a massive tailwind to all those currencies. Those are the real winners right now we have very low exposure to China itself. We think the currency is going to be stronger than anyone expects, but it's going to be watching paint dry. That's the anchor. The rest of these countries are winners. The last thing I'll say, we have it coming in our latest monthly, but it's very hard to find in any of my countries political parties or institutions that think you're supposed to harness the central bank for economic objectives.

(29:29):

You just don't find that kind of stuff because, and we've written about this, they saw what that results in the nineties. Now maybe it results in that because they didn't have the right conditions, but it doesn't matter why,

(29:41):

But in Mexico you destroyed the banks, you destroyed poor, you destroyed people's savings, political parties and careers were destroyed. So this anti inflationary focus and this low-end indebtedness and fiscal orthodoxy culture is really profound and it characterizes, South Africa characterizes Thailand, it characterizes Indonesia, at least in their statements. We're not so sure whether they're going to implement it now, not every country, but it's really profound. And if you look at the popularity of these leaderships, they're all north of 60%. And look at in the developed markets, right? You're lucky to get in UK below 20 Shine Baum, president Scheinbaum of Mexico is near 80% approval and is incredibly orthodox in her economic management as many, most as her predecessor was.

Speaker 2 (30:34):

How just this is a really interesting question because you bring up so many different dynamics and it's almost like a fragmented table, right?

Speaker 3 (30:44):

Mosaic?

Speaker 2 (30:45):

Mosaic,

Speaker 3 (30:46):

I like to think of it as a mosaic.

Speaker 2 (30:47):

Yeah, it is a very unique mosaic of countries policies, possible risk, but at the same time massive development opportunities. How does your team stay on top of this global landscape given time differences, given geopolitical changes just at the speed and the rate of change?

Speaker 3 (31:07):

Yeah, great. That's a great question. First, we all grew up in Southside Research

(31:15):

And that is just, it's the hardest, most thankless job on Wall Street, but you're pretty much beaten up every day by people who know something almost as well as you do. And your job is to finally know it better than anyone you're going to question from. And so just conditions you differently. And so we each grew up waking up in the morning. For me, for example, I wake up in the morning, where's the ruble going to be? Where's the South African ran going to be? Where are credits? Is it going to be, what are the developments? All this kind of thing. But on very specific countries, what does it mean for the three-year bond? What does it mean for the 10 year bond? And so we designed a process to allow us to do that. How do we do it? We have step one, which is our favorite step. What's cheap? That's the boss.

Speaker 2 (32:00):

That

Speaker 3 (32:00):

Is the boss. Tell me what's cheap and tell me and give me the order so I know what to focus on. Once we see that I've been doing the other job for 30 years, we might fail or succeed. But the whole point is to have a good answer to your question below, which is we're focusing on specific things like the China example. We're even don't need to be experts on the property sectors is so what if we're, we are. There's no money to make, only money to be lost was what step one was telling us. So that's how we do. We got a great team and we talk 24 7 and we text and we share pretty much every single thing because something in Malaysia could affect something in Brazil, or you might meet someone who knows a lot about Brazil in Malaysia. That happens. And so constant communication as

Speaker 2 (32:52):

Well. I love that. So I want you to sort of bring it home and give a great example of not even an example, just your thought process on what's the best opportunity in your opinion to get exposure to emerging market debt one and then two, simplify why people should consider the asset class going forward and make the case for emerging market debt.

Speaker 3 (33:22):

Yeah, I would say the best opportunity is a fund like ours, a blend EM bond fund with an experienced managers that diversify their exposure to EM countries because it's em that is the place with low debt and independent central banks. I'll give you a precise metaphor for an advisor in the us. Put yourself in Portugal during one of the Eurozone crises. You're in Portugal, you've got a bunch of million dollar accounts. What are your regulators and your customers telling you to do? Own Portuguese government bonds, right? The capital charge is low, it's collateral, it's this, it's that, right? It can't go wrong. Portugal was downgraded to lower than Nigeria's rating during the Eurozone crisis. Now those advisors all survived that first crisis. They were all saying the same thing.

(34:21):

But first of all, I don't think that's the culture in the US compared to the European advisor culture. But also there was a second round after a while, the dust settled and folks said, well, I should have owned Boones or I should have owned gold, or I should have owned stocks or, so I keep that in mind as this stuff happens, it's normal. It happens to highly rated countries. So I would say the best opportunity is a fund like ours that carries 7%, yields 8%, and you can check out the rating. So that's first. How should investors consider the asset class? Well, I'll say a couple of things. First, maybe they take away, wow, I shouldn't be up to my neck in treasuries and bills and think that it's safe. That's a reasonable takeaway. Fair. But I think that the right way to look at it is there's a big message in gold. Huge message in gold. An economic historian is not going to say about 2025, oh, the dollar lost 15% against Euro. That is not going to be the headline for a historian. Historian is going to be the dollar loss, 50% against gold. And then there's a whole bunch of other stuff going on with currencies

(35:47):

And why is it central banks are buying? We all know that, and they didn't send a press release. What else are they buying? They're buying local currency bonds and they're not going to send a press release on that. That's what's happening. When you saw those headlines in earlier years about UAE, Russia, Brazil, China, Saudi Arabia, agreeing to trade in each other's currencies, which had previously been priced in dollars. What do you think these central banks are going to do with a pile of AL or Rupe? They're going to open bond lines, right? And they're not going to send a press release for it. So there's actual central bank demand for these. That's our ization. And it's similar to what's happening with Gould. Central banks want reserve assets in low indebted countries with independent central banks. And the US, especially because of sanctions, is less obvious than it used to be as that. And there's a search for alternatives. Gold was the first, but this is happening as well.

Speaker 2 (36:50):

Wow. This has been fantastic, Eric. I really appreciate you taking the time.

Speaker 3 (36:53):

I loved your questions, Beal. Thank you.

Speaker 1 (36:55):

Thank

Speaker 2 (36:55):

You.

Speaker 1 (36:58):

That's a wrap for today's conversation, but the ETF discussion doesn't stop here. For more insights, deep dives and voices shaping the market, stay connected on etf central.com from the New York Stack Exchange. We'll see you next time. Information contained in this podcast was obtained in part from publicly available sources and not independently verified. Neither ICE nor its affiliates make any representations or warranties expressed or implied as to the accuracy or completeness of the information, and do not sponsor, approve or endorse any of the content herein, all of which is presented solely for informational and educational purposes. Nothing herein constitutes an offer to a solicitation of an offer to buy any security or a recommendation of any security or practice. Some portion of the proceeding conversation may edited for the.