>> from new york city, i am jonathan ferro with 30 minutes dedicated to fixed income. this is bloomberg "real yield." ♪ jonathan: no real change of the fed, why the old boss sounds like the new bus. -- why the new boss sounds like the old boss. the prospect of tax cuts. and a wall of demand meets a flow of supply. $46 billion in orders. we begin with a big issue, why the new boss sounds like the old one. >> the labor market and economy are not significantly overheated. >> there is no sense of an

overheating economy or a tight labor market. >> wage increases are modest. >> we don't see wages signaling tightness. >> it has been below the 2% objective the last 2-5 years. >> is a transitory or are there more fundamental things that work? i think were watching carefully to see. >> we think it is important to gradually move our policy rate to a neutral level. >> the economy is strong, unemployment is low, growth is strong, it appears to have picked up. it is time to be normalizing interest rates. jonathan: joining me is cohead of global portfolio management at goldman sachs asset management. and coming to us from london, 16 -- fixed income portfolio manager at j.p. morgan asset management. it is great to have you guys with us. i want to begin with you, what

will change at the fed given the two individuals sound precisely the same? >> not a lot, but i think over time there are subtle differences. first on the similar side, i think they're both consensus builders. i do think you're not going to see anything extreme out of powell, but they are subtle differences. number one, powell is more focused on markets and will listen to markets. i think if you continue to see an equity market that continues to run the way it is run, i think he will do it as a signal of overheating. i think on the margin come he may be hawkish in that regard. the second is regulation. chair yellen was focused on conservative approach toward the banking system and the regulation in the obama administration was constraining for a lot of banks. i think powell will be more practical and that will potentially lead to more lending. eric: diana, those things that might put on the table, is that enough to stop us out of what we are currently seeing?

>> i don't think it will be a significant destabilizing for markets. ultimately we have an environment where groups are well anchored, there's a lot more certainty. for long-term investors, it is a good situation. we know the fed will gradually hiking rates and powell is sending the same message. for smaller banks, he has approached regulations saying this is an opportunity for a more tailored approach. he is supportive for this institution. for investors on fixed income and credit, this is a positive outcome. eric: robert, for the treasury market, it has been a flight -- a flat yield curve, as might be anchored and inflation is still soft, the fed is still moving. bearish the front end and bullish the long end seems to be the story. >> i think there's less room for the bullish the long end part. looking in the last year, there's been very little movement in long-term yields. that is going to be the case

going forward. the front has full of quite a bit, but there are differences compared to a year ago. the first is they have hiked, basically once they get done with december, 100 basis points. and inflation is measured by the core, it has come down from a 1/8 to one fourth. you're not sure what it will do. they are expecting it to go up. the economy is doing fine. you keep chipping away at it, i think there will be increasing friction surrounding these hikes the closer they get to 2%. eric: mike? >> i don't think this will be a goldilocks scenario for bonds, whether it is fixed income generally in terms of treasuries or credit. i think 2018 will be a challenging year. jonathan: what changes? >> i don't think the differences .ho is the chair said the difference is fundamentals. we have been in this one way cycle of easy money and low

inflation and modest level of growth differentials across countries and very little volatility. we think in 2018 the picture changes. what changes it? i think there will be a normalization of a risk premium over all. when you start to see central banks remove this accommodation, the u.s. is started, the ecb is starting, there is talk of potential changes in japan, it changes the game. when you look at the yield curve right now, everyone is talking about it will flatten invert, it would only invert if we thought we would have a recession in the u.s., or a high probability. there is a very low probability. the opposite is happening. there are animal spirits released in the economy right now. we think it will introduce a a steeper curve. some interesting things to look at, one is the yield curve and what is happened recently in the yield curve, you have seen it significant flattening, some people calling for an version, we are not calling for that. look at the tips market. tips are seeing some level, this is the one above where you start

to see inflation getting priced back in. what we think is going to happen is with the strong economy, with physical stimulus right now, we think you will see inflation not get up to 2% or 2.5% next year, but to the point where you will see rates rise and curve steepening. jonathan: diana, what you say to that? we could get a big change in the regime year. diana: i think next you'll be a positive outlook for growth but i agree with mike's sentiment on duration. i think the outlook on duration is less clear-cut next year, partially because of the normalization he is talking about an absolute rate levels. that said, we have to take a broader global look when you're thinking about what is happening. there is a huge demand coming in from the rest of the world or risk assets. that will not change overnight or in the next few months, we think it will be a story that plays out for longer while the ecb is stepping back. they're not talking about rate hikes.

you still have a huge output cap in europe. it is coming from an elevated position. the same story out of japan. jonathan: robert, for you, you have been sailing the inflation story throughout 2017. will it change for you in 2018? robert: yes and no. you cannot paint it with that broad of a brush. what has worked for us to is being short the front end in the u.s.. being long on the backend, but especially short on the front end. as we go through the east -- through the ecb taper, we will have to see if there are opportunities for trades in europe. i think it could be too early to get cautious. the fed in contrast to the earlier cycles is much more careful on raising rates, a much slower pace. we are a ways away from target. bank of japan printed cbr last -- they printed cpi last night,

euro is on core inflation 1.1%. the euro is a shooting up, that will forestall aggressive reduction of accommodation from europe. their interest rates have not even risen over the last several month to a year, even as they are tapering. i think there is a super low, long rate environment that will anchor our backend here and will be very positive for risk markets. jonathan: robert is here from ptm and diana. coming up next, alibaba holds the biggest corporate offering 2017. that is next. this is bloomberg "real yield." ♪ jonathan: i want to head to the

auction block, we start in the united states with the treasury, the sale with a yield of 2.3%, indirect is missed by the lowest share in 16 months. in the u.k., the smart money went long. the university of oxford sold $1 billion of bonds due in 2017 with a yield of about 2.5%, maybe the first 100 year obligation to be sold by a debut issuer. the big highlight this week, alibaba has the biggest chinese offering of 2017, attracting $14 -- $46 billion in orders, the longest portions of the order, 1.58 percentage points over comparable government debt.

from new york, mike from goldman sachs, robert and diana. what an offering, $46 billion of demand just comes in. the wall of demand meeting the flood of supplies. your thought on that? robert: i think the markets are open, there is a ton of liquidity. the craziest manifestation of that is bitcoin. but there is a spectacular amount of money in places where the rates are incredibly low, whether it is japan, coming out of china, coming out of korea, the rates are very low, there's not a lot of product. the dollar markets are open, a wide range of products. the spread, given where we are in the cycle, i'm not sure we will have some kind of event, they are more than adequate. jonathan: was it the fact that it is the chinese come of the fact it is a tech company or just that it is a single-a issuer is a better yield? michael: i think it is the latter. i don't think it being a chinese

company is attractive to too many people. there is an enormous amount of capital and asia. it is really earning nothing right now. we have concerns, particularly around china, even though you have a high-quality company that is issuing, maybe china continues to grow moderately over the next 1-3 years, their one-year debt or three-year debt might be fine, but lending for 30 or 40 years when there is a massive debt problem in the country, we have a significant challenge with. also the structure of some of these deals, there are questions about as a bondholder, your rights to the actual intellectual capital of the firm. we are not big fans and are significantly underweight on chinese credit. jonathan: but those concerns have not bled through to the

alibaba issue, the have not let through to other things. was that happening? michael: we have a chart that goes over where we see opportunities and china is a bubble type of market from a credit perspective and many perspectives. it's not likely to ended today. -- it is not likely to end today. the government has significant reserves, but you have a debt problem that is likely going to come to roost over the next few years. if you look at emerging markets, emerging markets away from china, particularly economies that are not directly tied to chinese growth, which we think will decline significantly in the next few years, there is a huge rate differential, huge opportunity. you have very strong growth. you have significant adjustments occur in a number of economies, you are pretty early stages of recovery first is the u.s., where we are later stages. if you look at the differential on the chart, there is a massive differential between developed market rates and emerging-market rates.

one, we think will lead to potentially rates coming down in emerging markets. more importantly in the area we are exposed to, currencies. we think with stronger economic growth in the emerging markets x china, you will see appreciating currencies relative to developing market currencies. jonathan: diana, do you see a reason to stay in there with em? diana: yes, emerging markets look positive. up -- obviously at this point in the cycle, you have to be careful. i think the last two years, we've seen some big recovery, but i think investors have to be a little more discerning now. look for the markets where you have higher yield rates, robust growth not too explosive to idiosyncratic shocks, and stronger balances. jonathan: a two-part start here with alibaba, one is em, and the others is what is happening with credit more broadly. morgan stanley saying, it is not a coincidence that fundamental problems are becoming more apparent in the sector as the

fed continues to withdraw liquidity, according to strategist. as is often the case these risks , are mistakingly being a rationalized as surely idiosyncratic problems. robert, this happened a few weeks ago when there was a little bit of a pullback in credit and people said no, this is about sprint and t-mobile, it has bled out a little, but really they are specific issues. what do you say that the morgan stanley? robert: i think the drop in health is corollary. i think you see it in equities, you see it in credit to some degree at any given time, there is some area getting bombed out, whether it is retail, energy, looking back ways. and in emerging markets, some of the sovereigns were in tough shape. 6-12 months ago, looking even in brazil and argentina. i agree, you need to be selective in emerging markets. i think sovereigns and general look attractive relative to corporate, whether you are looking at european peripherals,

emerging markets. on the corporate side in emerging markets, we tend to buy on a shorter maturity because of difficulty in assessing the credits long-term prospects. jonathan: i am trying to understand what getting defensive in credit means this time around. what going up in quality means this time around. if you look at what is happened in the last couple of years in credit, leverage has been picking up across most ratings, with maybe the exception of the very top, say single-a and elsewhere. what is your view on what going defensive means? michael: i think alibaba is a good example to talk about. if you wanted to get more defensive and go up in quality, you buy a high-quality, pristine company, but that doesn't change the fact that alibaba will be exposed to china risk and credit risk overall. i don't think the answer is to go up in quality, i think the answer to getting more defensive

is to have a relatively neutral position in portfolios, even moving toward potentially somewhat underweight. i know this is an idiosyncratic argument, and when it becomes systemic is an interesting one. my grandmother used to teach me if you have a series of five pennies, and become cynical, and so on. eventually it matters. i don't think we are quite there yet, but there are a number of industries that have been hit with significant issues and the bottom line is the risk is higher. this is why volatility matters to credit investing. the higher the volatility, whether it is equity volatility or rate volatility, the more you need to get compensated for this. you want to make sure you get compensated for the valuation issue. jonathan: is it time to be defensive? we have talked about this before, try to express that more clearly, where you would go. michael: yes is the answer, very modestly. not to completely remove spread

exposure in portfolio. what we have been doing in portfolios we have started to , underweight high-yield investment and we have bought securitized assets we think offer an attractive carry, they have a positive correlation to credit, but they are better protected in the event we see credit events in the corporate sector. that's will we have been doing, things like clo's, and spreads that are more attractive. jonathan: robert, your thoughts? robert: to that, on the structure, i think that is a defensive product, good spread, i agree with that. on the cycle of volatility, i think what we've seen a historically is when the spreads begin to blowout is after the fed is further along in tightening and they break the system. right now and in prior cycles, there is a lot of anxiety that can kick in one, 2, 3 years too early. jonathan: everyone is sticking with me.

i want to get a check on where the markets have been throughout the week, twos, tens and 30's. we finally broke out of the tight range on the tenure. -- tight range on the 10 year. we cannot read quebec and again. front end up three, long and down one. coming up, a potential government shutdown and the jobs report. this is bloomberg "real yield." ♪

jonathan: this is bloomberg "real yield." it is time now for the final spread. in the next week, canada's prime minister travels to china to meet with the chinese president. in the u k, the prime minister

theresa is scheduled to meet may with the eu's chief brexit negotiator. michel barnier. germany will have a social party convention. in the u.s., a potential government shutdown as well as the u.s. jobs report. still with me, michael, robert and diana. diana, let's begin with you. looking forward to next week, payroll is friday. best case? diana: i expect we will see pretty much 200,000 new jobs added. employment rate steady. nothing really that will derail the market too much. jonathan: we talked about breaking out of the goldilocks regime. any reason to believe unemployment rate will go lower and wage growth will start to squeeze in a material way? michael: we have been right on the unemployment rate continuing

to decline, that it has been challenging to predict the wage side. we think we will continue to see the unemployment rate declined. we expect to see probably be a couple tenths taken off next year. we expect to see, where we are in terms of tightness in the labor market and the amount of hiring we are talking about, it is likely to lead to some level of inflation. the bottom line is it doesn't have to be out of control to get rates to start to price it in even if the fed is not as aggressive. jonathan: do you anticipate a conversation with us next year, where i say to you, unemployment is really low, the data is terrific, why are treasury yields still at 240? michael: it is possible but i would bet you lunch we will not have that conversation. jonathan: would you take that bet, robert? robert: i would take the other side. jonathan: would you, why?

robert: wages are rising, they are about the level they have been at in past sessions. i think this is an instance of fighting the last war. the last war in the 1970's of breakaway inflation, a totally different environment. it was very contained. i think japan is a good example of a place where the unemployment rate, they are not producing inflation. jonathan: i have to book a table for 2018. diana, we can invite you, as well. time for the rapidfire round. three quick questions and three quick answers. payrolls report, 200,000 is the median estimate is a bloomberg survey. of site or downside? michael: upside. robert: modest downside. diana: upside. jonathan: goldilocks or the start of a new regime? michael: new regime. robert: goldilocks. diana: goldilocks.

jonathan: to keep you all out of trouble, this is your personal view, would you hold bitcoin or the 30 year alibaba issue through the end of 2018? michael: alibaba. robert: alibaba. diana: alibaba. jonathan: there we go. i guess that is sensible. michael, robert and diana from j.p. morgan asset manager. guys, i appreciate your time. from new york, that does it for us, we will see you next friday at 12:30 p.m. new york time. this was "real yield," and this is bloomberg. ♪

>> this is "etfiq," where we focus on the risk and rewards. ♪ scarlet: new incoming federal reserve chairman, say monetary policy could outsized stakes in real estate companies. republicans clear another hurdle in the quest to cut taxes. what is the tax reform etf play? and how the surgeon e-commerce is benefiting the timber and for street etf. whether you embrace or fear etf, there is no getting around their influence. our in-house expert is here to

get us started with a snapshot. >> you mentioned the fed and rates. this is a big deal, it has had a big effect on etf flows. we have seen what has gone on the bottom side of things, but it has also affected etf flows in other sectors. you would think tech would be number one, that it is real estate. rates yield is 5%, 6%, so the thirst for yield has pushed money into interesting places. our etf's taking over the world? if you look at the sectors, it is way more owned by passive than other sectors. 25% of real estate etf's are owned by passive funds, very high. if we look at which stocks in likearea, we see a company

some of the stocks are like a canary in the coal lines -- in the coal mines. if we continue to see rates staying low, some of these will be majority owned by passive funds, and if rates rise, look out. scarlet: just a matter of time. let's bring in the chief investment officer of caruso investment. -- investment officer michael caruso. he has a decade of experience in etf investment. great to speak with you. as eric was showing us, real estate is the most owned sector by passive funds. is this a problem? what concerns might this present? >> i think it is. there are a lot of headlines about the etf bubble. call it a red hearing, there are tons of etf bubbles, but it is -- there may be bubbles in the overall market, but not caused by etf's.

where it is causing a bubble are places like rates. the fact that vanguard owns 14% of simon property group makes no sense. the big headlines are distracting us from the real bubbles. scarlet: would you assume the passive ownership would drop off once interest rates normalize? >> i think it is more about the demand. people want the yield and these things hit normal on multiple areas. if you look a stock like national retail properties, the biggest holders from vanguard, then you have sdy, then it hits the mid-cap sectors, and vanguard calls it a small-cap stock. it hits so many different areas. if it gets hurt in one of those, kicked out in one of those, you could see the dominoes fall rapidly. you could have a macro fall or a structural fall. eric: to turn a little bit to the tax plan.

big issue this week, and i love the etf you picked for tax reform. michael is the classic etf master, he is an advisor and he picks a little out-of-the-box. tell us about the etf's to play tax reform. michael: sure, there is a lot about what tax reform will do for individuals. there seems to be a leveling, robin hood tax plan for individuals, but for corporate industry forward. -- for corporate it is pretty straight forward. if you asked me about an etf we have used for years, it takes the s&p 600, free weights it to to revenue. net margins when you waited for revenue, 1%. slight increase in profitability from tax reform, method earnings enhancement. -- massive earnings enhancement.

scarlet: it's not just looking at small caps, but small caps based on revenue. michael: the revenue idea is interesting itself but in the world of tax reform, they can make a big difference on a net margins. scarlet: talk a little bit about btal, which goes along low beta volatility. how and when do you use it? i think you have to tread carefully. michael: it's my etf for protection. the reason i like it is normally when you buy an inverse product, your upside and downside are one to one, two to two or 66, 6.6 to what makes btal different is the structural factor, by having the ones be low data stocks and the shorts behind it is not that high data stocks, the margin is about 100% when it goes down. when the market goes up it is about -50. it pays you 50% for one dollars worth of protection. that is asymmetric risk reward.

it is the type of thing you can have strategic in a smaller position but build up as you have concerns. eric: one thing interesting about you is you use etf's but you have launched one. which is unusual. when it came out, everybody freaked out. they thought it was like cdo squared. scarlet: let's be clear, this is an etf's holdings are directly involved in the growth of etf industry. michael: thank you for that clarification. eric: there are stocks in the financial sector that will gain from the passive trend. tell us about what it holds and why you think it is a winner. michael: my partner and i got involved in etf's as private equity investors. we said, how can we make this publicly available? we started the concept of an index that captures the ecosystem. the ecosystem is not just the issuers. jeremy was here a couple of weeks ago.

it is also the exchanges, the index providers, the backup. msci is a great example. msci has reinvented their business model. you have the back offices, liquidity providers, you take all five and put them together and capture the growth of the industry. scarlet: it is a little meta for our liking. but we like it. thank you for being here. new etf's need patrons and money backing ideas. so enter the seed capital provider. how does an early investor decide which etf's to back? our guest shares his decision-making process. and one etf that caught our attention this week, this etf took in a record $40 million last week, the largest in inflows and it began trading in 2009. it has a double focus on ian's 's and tech. it is the best performing non-leverage etf in the united states. ♪ ♪

scarlet: this is "etfiq," if time for the etf lifecycle where we run through the three main stages of etf's. first, filing, vanguard registered three factor funds to begin trading in the first quarter of 2018. the funds come with the firm's signature low fees, undercutting competition. a programming note, we will speak with vanguard founder next week. then you have the launch, the jpmorgan event etf will package a traditional hedge fund strategy. it goes by the ticker jped. event driven funds speculate on potential events like bankruptcies and m&a. those etf that don't get enough interest, the final stages liquidation.

the restaurant leaders fund closed last month just shy of its first birthday. it invested in the restaurant industry and failed to attract enough assets to be cost efficient for its provider. the goal is to avoid liquidation. a critical part of the lifecycle is how a new etf finds traction. that is where mark esposito, founder and ceo of esposito securities comes in. thank you for being here. >> thank you. scarlet: you provide seed capital to new etf's, kind of capital to new etf's, kind of like a venture capitalist for etf. talk about your role. mark: we are a broker-dealer. we have gotten calls from clients on etf's to bring to the market. and to help grow the industry overall. that's what we provide, you need products and services and where the big firms have left off. scarlet: do you take the place of a market maker? mark: indirectly. sometimes we do that when there is not a lead market maker, and there have in more and more

cases with no lead market maker in etf space. scarlet: if you look at the back drop, we see a pick up on etf closures. it is an interesting time. why is seed capital drying up when there is more than one new etf launching every day in the u.s. and more than three a day globally. mark: i think there are many reasons for that. one is the cost to seed is expensive. it takes a lot of capital on the balance sheet. i think competitors have made a conscious choice to back out of the space and leave, and therefore that has played into our hands well, we can grow the etf space with new and existing issuers, and that's what we love to do, help clients grow. scarlet: you have independent insurance but also you have vanguard and seed tree, do they struggle for seed capital? mark: i don't think it is an issue for them with their size. they can do it themselves.

a lot of issuers have decided to sell seed. that is ideal, but when they can, they will come to a sell side broker or the open market defined seed capital. scarlet: let's talk about process. what are your criteria? do you have red flags where you say no thank you? mark: really it is based on relationship and who we are working with. there are some firms we have chosen not to work with. it is really on a case-by-case, we have an investment committee that looks at that, senior management of the firm. putting out capital is expensive and time-consuming. we look at that quite closely. we have a 40 point grid that we look at with each new issue in order to see it. scarlet: that is due diligence. what sort of things are investors seeking right now? mark: a lot of thematic place. aieq, and artificial intelligence fund has done well and is already over $70 million. scarlet: but it underperformed last month.

mark: i think it will catch back up on the performance side. i think you're seeing high demand for that and they are first to market. scarlet: do you think media buzz plays a role? there is a lot of excitement over the ibm watson platform making a pick. mark: on the launch, ibm had earnings of 10%, i think that helps a lot. thematically, that's what you need to grow with etf's, that buzz. scarlet: how important is a catchy ticker here? it is kind of like a vanity license plate, it is good for building buzz. mark: i think brand recognition of the symbol is huge. that is the discussion we have had with issuers before lunch. we launched txr as well, a tax reform etf, and that has traction just by the very simple. -- by the very symbol. we find that a lot. you cannot underestimate the ticker symbol. scarlet: do the ticker symbols come first and then the idea?

or do they generate ideas? mark: sometimes. it could go the other way, too, where you have an idea and you have to back into a ticker that is available. ofot of takers -- a lot tickers are taken. scarlet: i was thinking about solar etf's that launched the same day, and one did much better in part because the ticker was so smart. mark: i think it is an important part of the branding process. i think issuers understand that more and more every day. scarlet: there are 750 as it managers in the u.s., but only 100 issuers. there is a pretty big gap there. think more will get into the etf game? mark: we are a strong believer in the space. i think you will see the active managers jump on the etf train in the form of an etf wrapper. scarlet: will they need the seed capital? mark: they will, but the bigger firms will find themselves because of their size. traditionally, we are working

with big, but also small and medium-sized asset managers. scarlet: good stuff. mark esposito, founder and ceo of esposito securities. coming up, we go inside the etf wood. it is up 30% this year. all this is the tip of the iceberg. we drill down into all of bloomberg etf content, you will want to check us out. ♪

♪ scarlet: welcome to "etfiq." for every etf that offers exposure to an asset class or style, it's not long before others promise the same. socially responsible investing is generating a lot of interest. here with us is the ceo of impact shares, the first and only nonprofit etf platform. before we speak with him, eric is back to give us the drill down. eric: esg is a popular area, at least in terms of media attention. i have a ratio i keep where i look at media hype to assets. some get no media attention but a lot of assets, the opposite extreme is something like esg, tons of media but no assets.

it looks like a good run of assets here, but let's overlay a chart of low volatility etf assets, that's just one category. you can see how dwarfed it is. if i did all etf's you would not be able to see it. esg is struggling for a couple of reasons. we look at products that have done well, the etf that have taken in money, you have to dig into what they do. they are not that clear. these two are doing good works, these to go along and index and then carved out companies that have a big carbon footprint. this is the gender diversity, committees that have a lot of presence of women in executive positions. esg has a lot of potential, but the assets are yet to follow. scarlet: we've heard that there is a lot of demand or interest in esg.

back with us is the ceo of impact shares. you filed to etf's along with the naacp and why. ywca.d the how do they come about? ethan: i think eric hit the nail on the head when he talked about the lack of asset growth. a lot of strategies that retail investors have access to fall into one of two buckets, exclusionary where they screen out certain companies, or the asset manager is the arbiter of what a good corporate citizen is. i think that's where the strategies fall down. if you look at the naacp and ywca, these organizations have been fighting for the rights of constituents for hundreds of years. they bring a great deal of credibility to the space and have very specific social outcomes they have in mind from a company perspective when determining what metrics to

track and how to gauge corporate responsibility. that is what we're doing, we are bridging capital to caused by partnering with leading nonprofits and allowing the investment public to co-invest alongside these leading nonprofits. eric: one thing i felt was interesting about your firm is that you are a nonprofit. beside vanguard, which is argue is somewhat of a nonprofit, that is very rare. it is a for-profit business. tell me why you decided to start a nonprofit in this industry? ethan: it is really about credibility. for us, we view impact shares almost as if utility, we are bridging capital to cause. whenever you introduce the element of profit margin and, let's face it, wall street has already been painted with a broad brush as being greedy. whenever you introduce that element, you lose a lot of confidence from the perspective

of nonprofits, and from our perspective, we thought it was the right thing to do and it resonates with the nonprofits we were working with. scarlet: it's almost like aligning your interests in many ways. let's go under the hood of some of these etf. how is it going to be different? ethan: if you look at she, it was effectively underwritten by calpers, who gave them significant seed capital. they used three perfectly valid social screens. it is a great organization, i'm not sure they're the best arbiter of what a good corporate citizen should look like when it comes to woman empowerment. for us, it was harnessing the expertise of the ywca and a

gender diversity firm out of the netherlands. and creating a strategy that focuses more on appropriate social outcomes relative to company policy and products and services, versus, you know, having what i would say is having thin expectations from social outcomes and were they marginal employees. it's important we are aligning our interests with the ywca, the leading nonprofit in the space. eric: you talk about ywca and you have the naacp. you planning to work with other nonprofits? ethan: yes. as i said, we are a utility to be used by nonprofits, and we would like to have every social issue represented a leading nonprofits accessible in a separately investable etf, so

the investing public can create bespoke socially responsible investment portfolios that are reflective of your individualized values. we are working on affordable housing, affordable health care, arts, and lots of other health related issues. there is more to come. scarlet: are you working with the american heart association on an etf? ethan: we've had some conversations. scarlet: we'll wait to see have -- we will wait to see how that shakes out. what is the ticker going to be? ethan: i just heard mark esposito talking about the importance of the ticker. i like hart, there is lots of potential. scarlet: good stuff. ethan powell joining us remotely. thank you. etf industry has something for everyone, and this week there is an etf for that, we highlight a paper etf that keeps on shopping. the ishares global timber for

history -- foror estry etf is known simply as wood, up 30% this year and 70's percent since launch in 2008. it is driven by the band for timber. supply disruptions from wildfires are factor. two thirds are linked to force products and paper, including warehouses and paper. north america makes up half of the etf, followed by brazil and japan. wood has about half of its holdings in small caps, which could result in volatility. it will have wider trading spreads than typical etf. scarlet: the ticker is memorable, wood. eric: there is also cut. scarlet: be sure to catch us each wednesday at 12:30 new york time.

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