The transcript from this week’s, MiB: Samara Cohen, CIO, Blackrock ETF & Index Investments, is below.
You can stream and download our full conversation, including any podcast extras, on Apple Podcasts, Spotify, YouTube, and Bloomberg. All of our earlier podcasts on your favorite pod hosts can be found here.
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Bloomberg Audio Studios, podcasts, radio News.
This is Masters in business with Barry Ritholtz on Bloomberg Radio.
Barry Ritholtz: This week on the podcast, I have an extra special guest. Samara Cohen is, wow, what a career. She has Chief Investment Officer of ETF and Index Investments for BlackRock, the investing giant that manages $10 trillion. She’s responsible for about 6.6 trillion of that. She sits on the BlackRock Global Markets Executive Committee. She leads a team of portfolio managers and traders and platform architects and market structure developers. Really a unique insight into how markets operate, how money flows, what investors are looking for. Just an absolutely fascinating set of positions at the largest investing firm in the world. I found our conversation about passive versus active, about the Bitcoin ETF, and about changes in market structure, really to be absolutely intriguing. With no further ado my discussion with BlackRocks Samara Cohen,
Samara Cohen: Thanks so much. It’s great to be here in person with you, Barry.
Barry Ritholtz: Yes, it’s great to have you. So, so last time we went pretty in-depth into your education. You have a BS in economics from Wharton and a BA in theater arts from the, from their College of Arts and Sciences at the University of Pennsylvania. As a refresher, how do you go from theater to finance? What, what’s the relationship?
Samara Cohen: Well, I started with theater, as you said, because when I was in high school, I loved it. And now I am the parent of two high schoolers, Barry. So I, I think back to how important it was to me to go all in on something that I loved, and that’s my hope for them, that they find something they’re passionate about. For me, it was theater, not film, not entertainment. It was bringing people together in a live way, in an audience to have some sort of experience that would maybe change them a little bit…
Barry Ritholtz: Big theater nerd?
Samara Cohen: Big total, big theater nerd, right? And so I went to college wanting to pursue that as a major. Now in high school, I was also very good at math, but it, it didn’t feel like something I loved, but it was something I was good at. But when I got to college, I had all of this credit so that I didn’t need to take another math class. And to my surprise, I found that I missed it. So I discovered economics. I heard about a professor, he was supposed to be good and felt like, like learning about markets and economics felt like math with purpose to me. And so I started pursuing that in parallel. That made my parents really happy, of course, because I was spending my summers working for regional theater companies. So they felt secure in the idea that I had a backup plan. And I felt like I got to live in these two different worlds, which really kind of widened my aperture on lots of things. And then when it was time to graduate, I wanted to, to take my backup plan out for a test drive and make some money so that I could support myself and be financially independent. And I found that I really loved markets.
Barry Ritholtz: Huh, that, that’s really interesting. I, I’m kind of intrigued by something you told Fortune magazine not too long ago. 90% of directing is casting, right? Fascinating conversation. Lots of film directors have said similar things to that, and the world has changed so much that they’re even a now adding a casting director, Oscar, which amazingly hasn’t existed for years. But I’m curious how youthink of casting in the job you have now where you’re managing so many different teams and so many different people. Is 95% of index management casting,
Samara Cohen: I think 95% of leadership, Barry is putting the right person in the right job and assembling teams that build trust and can work together and maximize their individual strengths. So I guess what felt so specific to theater to me when I was doing it, and especially when I was directing now feels like a pretty profound lesson in leadership.
Barry Ritholtz: It’s less a specific idea to theater and, and instead is really a very broad principle.
Samara Cohen: I think it’s absolutely true. Look, when you’re a leader, your job is to make the most, to get the most out of, out of people and organizations. It’s not what you yourself can do, it’s how you position other people to do their best work. That’s pretty much what casting is.
Barry Ritholtz: So you mentioned you spent summers doing regional theater. There’s a lot of technical work that goes into that direction. Lighting design, set design. There’s just a ton of background work that goes to staging a show. What parallels can we draw to asset management? How much of the daily block and tackling that goes into putting on a show goes on to managing assets?
Samara Cohen: So I’ve often been asked about the theater part of my background. I’ve never been asked that question, so thank you because I love bringing back those memories of being in theater, being in tech week of a show. And I would start by saying, there’s lots of different types of theater and there’s lots of different types of asset management. So the place that has the most relevant parallel for me was putting on large scale musical productions during theater festivals where you had multiple stages going at the same time. In the business that I’m in right now, which is the ETF business at BlackRock, I would say that work is similarly orchestral. We like to say it takes an ecosystem for our ETFs to really deliver to investors, which means really being sensitized to all of the different places, how they work together and how they work together, especially during moments of high velocity in markets.
Barry Ritholtz: So let’s talk about a moment of high velocity. We’re recording this 2024. 2022 was one of those years where velocity picked up, volatility picked up, it was a big negative for equities. It was a double digit loser for fixed income. Unusual, both of those in one year. How did ETFs hold up and and what did we learn in that rough year of 2022 about the ETF complex?
Samara Cohen: Well, as you said, 2022 was a remarkable year for markets around the world because we had declines in both equity markets and bond markets. It was the worst bond market in 50 years. I will say, as someone who has really had the bulk of of my career in the bond market markets overall, and the bond market in particular are much more resilient, transparent, and accessible today because ETFs are in them. So ETFs have contributed in a very important way to market structure growth and development. And what we saw in 2022 is first a lot of really important portfolio reallocation decisions being made. All of a sudden, investors really had to think the role of bonds in their portfolio, how they were gonna position for higher interest rates, what inflation would actually look like, what was the meaning of this new regime. And the first place that they turned to to do this was often ETFs. So we saw ETF trading pickup, and that’s not flows, that’s just people using ETFs, buyers and sellers to manage their risk and reallocate their portfolios. And we did also see etf inflows, particularly in fixed income ETFs. So fixed income ETFs gathered really over $200 billion in 2022. And the reason for that is the bond market has historically really lacked transparency and been harder to access for individual investors who all of a sudden were realizing they probably needed a much more significant allocation to fixed income than they’d had before. So they turned to ETFS
Barry Ritholtz: You know, it’s funny, we’re talking about this now, looking back at 2022, when you and I spoke in the spring of 2022, we talked about the volatility of 2020 and you pointed out ETFs held up splendidly. If anything, there were certain stocks that were halted, other parts of the market had structural issues. ETFs came through that with flying colors. Is that a fair statement?
Samara Cohen: That’s exactly right. And during these stressed markets, high velocity markets, investors need some outlet for risk management and for transparency. And so if ETFs have matured in the market, which has been over the past 30 years in the us, it has actually improved markets broadly.
Barry Ritholtz: You mentioned flows. I think people assume there are flows into a particular fund and the prices go up, but that it’s not always correlated that easily. What we saw into the rally in 2023 were outflows and the market went up regardless. How do you at BlackRock and you overseeing all these ETFs, think about the role of money flows into and out of various funds and what it might mean for the health of those funds and the subsequent performance of those funds and, and the market.
Samara Cohen: Across the ETF complex, as you pointed out, there are, you know, at iShares we have 1300 different ETFs. So being able to provide ways for investors to quickly change their exposures, move out of one fund into another fund, it’s a healthy thing for markets. It’s a healthy thing for portfolios. I don’t know if your question is more around the role of ETFs and price formation and markets just generally…
Barry Ritholtz:. So, you know, I, I’m always astonished when I flip on the TV and I hear someone say, oh, there are a lot of out flows from mutual funds and ETFs that bodes poorly for the market. We saw outflows pretty much right into the, from the lows in 2022 in October straight up to the, you know, recent highs. It’s only recently they started turning positive. It seems like people are drawing the wrong conclusion by tracking flows. I, I dunno if I’m getting into the weeds too much. This is too, too much arcana. It just seems that whenever I hear people discuss flows, the context doesn’t always tell the full story.
Samara Cohen: I think that’s right with respect to direction of markets. Now we actually love talking about our investment strategists actually have a piece that they publish called a flow and tell where they look to flows, which give lots of different types of information, but not necessarily directional information. So one of the things about ETFs is because they are trading intraday, they’re super transparent, they’re measurable on exchange, they actually give us some pretty useful measures around investor sentiment, also around positioning, around allocation decisions. And so there is lots of information that can be extracted from the transparency and availability of fund flow data, particularly with ETFs. But to your point, that doesn’t necessarily translate into direction of markets. And just as an example, there’s a statistic that I love to look at. We call it the imputed flow statistic, which tells you how much flow into or out of ETFs was present in a particular stock. And if I look across the entire US stock market, that statistic is usually about five or 6%. It actually goes down during times of market stress that there’s actually less market flow attributable to ETFs. So I think there’s a lot of other things going on with respect to price formation, but there are really important, I think, sentiment conclusions you can draw from, you know, flow intel type data. I,
Barry Ritholtz: I love that name “Flow & Tell,” you should use it. Sentiment is obvious. I think if you suddenly see people selling value funds and flowing into anything that’s tech heavy, clearly there’s been a a shift in investor sentiment when that happens. What other data points do you look at in flow and tell that might surprise people?
Samara Cohen: Definitely asset allocation decisions. So how people are shifting portfolios around,
Barry Ritholtz: Is that from stocks to bonds or is it even within the equity market? What sectors are dominating?
Samara Cohen: It can be from stocks to bonds and it also can be very interestingly within the fixed income complex. And that’s been important particularly lately given kind of all of the focus and you know, potential surprises coming out of the Fed and direction of monetary policy. See, you’ve seen a lot of kind of implicit curve positioning happening across the fixed income ETF complex
Barry Ritholtz: Though since the last time we spoke two years ago. The ETF space has definitely evolved. What do you see as some of the bigger changes since we last spoke?
Samara Cohen: So I feel like Barry, if you have me back in two years, I’m probably gonna say the last two years have been the most, you know, exciting years…
Barry Ritholtz: We’ll talk about, remember that volatility right after we had the recording like two years…?
Samara Cohen:. But the point is this has been a fast moving stream. A lot has been happening in the ETF space and in markets. What I would say to me has really defined the last two years since we spoke are two things and they’re both really exciting. The first is the move that we are seeing around the world with what we call self-directed investors. But more and more invest more and more savers becoming investors. And we can measure that globally. There were about 40 million individual investor accounts that have been open in the last two years. That’s more than the past decade combined. Wow. 40 million individual investors coming to the market. Now when I te when I say, and I will say this, everywhere markets are better today, it’s because to me a healthy capital marketplace is one that has the transparency, resilience, and agility to bring more people off the sidelines so that they can save for retirement or whatever financial wellness looks like to them. So that’s theme number one. And the second one is the ongoing convergence between index and active.
And you will never hear me use the word passive Barry. In fact, if I ever have my own podcast, it’s going to be called, there is nothing passive about ETF and index investing because we’ve really obliterated that concept. There are so many different types of strategies and outcomes that are available now through index strategies, which investors buy through ETFs that it gives them, again, much more agility with respect to their portfolios and their goals.
Barry Ritholtz: And even the S&P500 is, there are a lot of active decisions. It’s market cap weighted, that’s a choice. There are rules that determine who can and can’t be in there. Companies get added and subtracted all the time. There’s a decent amount of active within passive. But I want to come back to the 40 million new accounts. When I think of new accounts, I kind of harken back to 2020 and the pandemic lockdown and all the kids playing on Robinhood and that sort of stuff are, are these small fun accounts or are these people really saving for things like paying for college or retirement or buying a home? Like when, what are those? The constitution of these 40 million new accounts.
Samara Cohen: I think it’s both of those things. So when people had their stimulus checks and there was commission free trading and to your point they were home and learning about all of the things they could do with technology, maybe some people got involved more to just check out the ecosystem and what it felt like. But when you look at the data, despite all of the headline excitement that meme stock mania generated, right? More people were actually buying ETFs than we’re buying meme stocks. So I think it has been a really important moment for investors who are coming into the market and coming in maybe because they’re starting with a single stock decision, but actually moving and learning about ETFs and, and then participating in a more diversified and long-term way.
Barry Ritholtz: I would like to see the flow and tell piece that looks at potential investors looking at some of the crazy meme stocks and saying, you know what? I’m just gonna buy a broad index and put it away for a few decades and not get sucked into this mania. Do you guys track that closely?
Samara Cohen: We Do. We do track it closely. And a few people have done really interesting work. Particularly NASDAQ has done some interesting work on individual stocks versus allocations to ETFs and to index. And this trend that we’re talking about, the individual investor trend is absolutely across the market. We’ve seen it in options as well, which is why ETFs that have some sort of embedded options outcome are also seeing a lot of interest, particularly from the self-directed investors. ,
Barry Ritholtz: Hmmmm Really, really intriguing. So let’s talk a little bit about some interesting news recently. Low cost index ETFs and mutual funds now make up more than 50% of the fun complex, put a flag in the ground and declare victory. Does, does this mean that it’s the end of active? Is there a ceiling for passive? What does that 50% line mean?
Samara Cohen: First of all, Barry, I am a huge fan of active managers and what they can achieve. My disclosure here will be that I’m married to a brilliant active manager. So I like to say that we are an alpha beta couple, but increasingly active managers use have beta allocations. They always have, of course they might use S&P Futures for example, as part of their strategies. And increasingly really all of the biggest active asset managers in the world use ETFs for some part of their alpha-seeking strategy.
So let’s look at two things. Number one, the statistics that you gave. That’s just really about the, the fund market. It’s important to realize that what is available through an index strategy has evolved massively over the past few years. So we’re really not just talking about traditional cap weighted strategies, which are kind of what you would get in a, in a future type strategy like with, you know, Russell 2000 or S&P500.
There are factor strategies, there are increasingly diverse range of bond market strategies across the different sub-asset classes of fixed income. So increasingly for us, we like to think of that whole new genre of, of index ETFs as almost active risk benchmark. Anything that’s not cap weighted represents a decision by the investor to take some active risk versus the the standard cap weighted benchmark. So that’s why I really think of index and active as a really broad continuum with index being able to take on more and more types of strategies that importantly were never accessible to individualinvestors before. And that’s why I maintain that today’s markets as a function of index and ETF technology are simply better because they’re more accessible and diversification and more sophisticated strategies. For example, like target date funds for the 57 million Americans that actually don’t have a workplace savings account, they can now through an ETF access target date investor investing where they basically make one decision, which is when do I think I’m going to retire? And then they can allocate to the ETF and the ETF will manage their, you know, risk exposure, their stock/bond proportion over time. Time exactly.
Or automatically adjust it. And since it’s an ETF wrapper, there’s no capital gains to pay until you finally cash that in. So It’s a victory for investors and it’s a victory for those, you know, millions of people who are moving from being savers to investors, which is incredibly important in today’s world as we think about, you know, retirement and, and what and, and people being able to retire with dignity.
And then the other important part of your question though, and I know you agree with me on this’cause I’ve heard you talk about it, is we have to look at the equity market overall, right? So that 50% stat, you know, is a little bit misleading with respect to the denominator ETFs are probably about 12 or 13% of the equity market, not 50%. And that gets back to these questions about, you know, is there a ceiling, like there is mostly active management happening, right? In price formation in global equity markets. The,
Barry Ritholtz: The broadest interpretation of passive indexing that I’ve seen is of the total equity market, about 17% can be described as managed through a broad index, not active stock selection. People have argued that, well, you can look at flows and foundations and sovereign wealth funds are, are managing stuff passively, quote unquote. But some of the numbers, 35, 40% seem kind of fabricated. You wanna say it’s 20% okay back of the envelope. We can pretend, but there’s just no data, no evidence showing that it’s even that big. And when we look at we can add up what’s in ETFs, we can add up what’s in mutual funds and it’s a relatively small part of the total asset management world. — Unless you think I’m overstating this,
Samara Cohen: I think you’re exactly right. And I think additionally, if we agree that as a gut check 20% of the equity market is indexed right ETFs or otherwise, it’s important to remember that that is often by active managers who are, who have beta as some component of their alpha seeking strategy. So their decision to make a beta allocation through some sort of index strategy is, is an active one and is part of the, you know, broader setup of their portfolio and potentially given the technology and, and you know, indexing has risen alongside computing power. It actually required actually the, the first kind of commercial microchip came about around the same time as as index investing. ’cause you needed computing power to be able to do that. And now that asset managers can make beta allocations, they can focus their attention and resources on their highest conviction, single stock or bond opportunities.
Barry Ritholtz: And, and let’s put a little flesh on that ’cause I, I don’t know if lay people are aware of how fund managers behave. You’re running a concentrated portfolio, you have 30 or 40 stocks and suddenly this stock generates a sell signal and you remove it from your portfolio and that stock gets taken over by another company and it’s achieved 99% of your price target. Now suddenly you have a five or a 10% slug of cash, which if it’s sitting around in cash, you’re gonna be under-performing an upmarket. So instead you turn around and say, my benchmark is this, here’s the ETF that tracks that. I’m gonna park this cash here so I don’t fall behind my benchmark. And when I’m ready to actively select a, areplacement for these stocks, I’ll swap out of one to another. Again, fair description of of how it works in the real world.
Samara Cohen: Totally fair description. But I would say it’s a relatively modern one because even five years ago those managers might buy futures instead of ETFs. And what we found when we engaged with a lot of them, one of the things we did was we built technology to help asset managers evaluate the relative value between an ETF and a futures contract. It really mattered what they were earning on their cash. You had to be earning something in order to make it worth the price of the futures. Otherwise the ETF looked quite cheap and as it turned out, remember where rates were five years ago, right? It was much more economic for them to move into the ETF. So using the ETF for the cash equitization has become a really standard active use of of an ETF strategy. But it is a more modern one.
Barry Ritholtz: So let’s talk a little bit about, you’ve mentioned market structure and we’re talking about active versus passive. Last month I had hedge fund manager David Einhorn of of Greenlight Capital on and he said, I view the markets as fundamentally broken. Passive investors have no opinion about value. They’re gonna assume everybody else has done the work, caused a big stir. Everybody kind of freaked out about it a little bit, but it raises the question, what has been the impact of this shift towards indexing and passive investing? I know you don’t love that word on overall market structure and the resiliency of our modern market economy.
Samara Cohen: Markets are more transparent and resilient as a result of ETFs being in them than they have ever been in history. Barry and I reject the notion that a transparent, resilient, and more accessible market, again, look at these 40 million investors that are coming into the market and are only able to do it through diversified strategies because of ETFs and index. I reject the notion that there’s anything broken about that, that is a healthy market and that is a market that is better positioned for the next decade of growth than ever before.
Barry Ritholtz: So let’s talk a little bit about index and ETF technology. What is it specifically about that approach that wrapper around a stock investment that provides transparency and resiliency? How is this different than the way we used to manage assets 20, 30 years ago?
Samara Cohen: Well first ETFs are literally transparent. You always can see what’s in the holdings of a particular ETF that’s available on a daily basis. But even more critically ETFs trade on exchange all day long and provide price formation in that way. So one of the things we often see, for example, in country fund ETFs, perfect example of it is looking at ETFs with China equities underlying them over the lunar new year. They are providing price formation by trading on stock exchanges. So investors can exchange risk on exchange while those underlying equity markets are actually closed. The bond market, by the way you probably know this, I’m a bond market veteran. Like the bond market has a lot of closure days where equity markets aren’t open, right? So bond ETFs are providing a price transparency to fixed income markets all of the time. And we really saw that profoundly over the covid volatility period where bonds, because you know, the bond market had largely traded and you know, still trades big parts of the bond market trade in a very bilateral voice over telephone way. And these traders were literally packing up their desks and having to go home and reconstruct their workstations at home. And so there were days where if you took an investment grade ETF, it’s top 10 holdings might trade 35 times in the day in the bond market. We can see that through trace reporting while the ETFitself traded 90,000 times, right? So that’s an example of real time price formation that just wasn’t available in the bond market before the ETFI
Barry Ritholtz: I think a lot of lay people don’t realize the Russell 5,000 is what, 3,400 stocks today? There are millions and mul millions of CUSIPs of specific bonds, different credit ratings, different vintages. Every municipality has a run of bonds. Every state, every city there are tons of bonds, hundreds of thousands, maybe even millions of bonds. So pricing is opaque and it’s not al always current. That’s not true on the fixed income side for, for ETFs it’s all day long and you get a price whenever you, you look at the ETF.
Barry Ritholtz: Yeah, so that’s totally true. But one of the things that gets me super excited ’cause I am just a career markets modernizer, is that there’s been a virtuous cycle and effect back on the bond market because investors have really demanded and wanted to participate in fixed income ETFs, bond dealers and trading desks have had to develop algorithmic pricing capabilities so that they could make markets in those ETFs. And that has had the effect of increasing electrification and transparency in the underlying bond market. Which is why again, there’s been this, you know, introduction of ETFs as a new bond tool has actually had an important modernizing effect on that underlying market ecosystem.
Barry Ritholtz: Samara Cohen: 00:28:58 [Speaker Changed] So you guys have been one of the larger bond fund managers over years
and, and in old Wall Street there were hundreds of shops that were managing individual bond
portfolios. What’s it like when you wanna put together a, a bond E-T-F-I-I would imagine your desk has
to revert to some form of old school, you know, picking up the phone and hey, who has these bonds?
We wanna, we’re a buyer. What, what can you get us? How do you marry the old with the new? How do
you marry the phone with the algorithm?
00:29:35 [Speaker Changed] Well one of the things we talked about before are the challenges of cash
management in a portfolio and certainly in a bond market portfolio, that’s a challenge for a manager
who doesn’t want to underperform the benchmark but has
00:29:47 [Speaker Changed] To put, especially when you have some yield these
00:29:49 [Speaker Changed] Days. That’s right. Who has to put cash to work. Now, one of the most
exciting aspects of the ETF innovation is the fact that portfolio managers of ETFs don’t have to manage
the cash they can if they want to, but they can also do what we call in kind trades with, with the street
or with liquidity providers. So if, so first, if people are buying the ETF number one difference just to take
a step back is that you can go and buy the ETF on exchange through your brokerage account. You don’t
have to write a check and send it into a mutual fund company. You are buying the ETF on exchange,
somebody is selling it to you. And if they have the seller on the other side, then there’s nothing that the
portfolio manager has to do, right? The buyers and sellers match off on exchange.
00:30:37 And that’s important because on average it’s about six to eight times as much trading happens
on exchange as in the actual ETF. But let’s say that there is an imbalance of demand, more people
wanna buy that ETF than sell that ETF. So we start to see the price of the ETF actually what we traded a
little bit of a premium to those underlying bonds. So then what the market maker can do is create more
ETF shares to meet that demand by buying the underlying bonds, delivering it to me. I will be the
portfolio manager in this case, and then we give you the ETF shares so I don’t have to put the cash to
work. The market has done that for me. They’ve been incentivized to do that because this marketmaker, she has captured the, the arbitrage spread that was available and I didn’t have to incur
transaction cost drag for the shareholders in my fund. So that’s one of the mechanisms that have made
ETFs deliver so effectively for investors.
00:31:40 [Speaker Changed] So let’s talk about who are the holders of, of ETFs. How granular can you
get in identifying here’s who, who owns our ETFs for the this fixed income product, this equity product
as a mutual fund company, you know exactly who, who owns that fund? Is it the same thing with ETFs or
is it a little fuzzier? It’s
00:32:05 [Speaker Changed] A little bit harder with the ETFs, but our ability to capture and analyze data
just as there’s much more information on everything, even if it’s just looking at the nature of prints on
exchange, we are able to derive much more data to make assumptions and really educated guesses
about who owns the ETFs. And increasingly we actually do have end user information. So really
important and exciting announcement we made, and we’re the first to do this is to, in our s and p 500
ETF, to for certain investors, individual investors give them the ability to decide if they wanna vote their
shares. Hmm. And that’s been a really important dialogue in the market because as an asset manager,
we don’t own the shares, but for our ETFs, often the laws say we need to vote the share, but our job is
to be asset managers. And so if clients want us to vote their shares for them, we can, but we prefer, and
with our institutional clients, we give them voting choice so they can tell us, BlackRock, we wanna vote
our own shares or we give them a menu of options and they direct us.
00:33:10 And so we have been, until now really unable to offer that to individuals. But as we get better
data and information, we’re able to expand choices to, to our clients.
00:33:22 [Speaker Changed] So there’s so many things to unpack with that. There’s been a lot of
pushback to the concept of indexing generally as well. Look at its BlackRock, Vanguard and State Street,
they control almost, you know, x percent of the market and therefore they’re running the world. And we
should break this up. It it seems to be a fundamental misunderstanding of who owns this stock and, and
what the role of the big index providers and big ETF providers are in this space. You are owning these
shares not on behalf of you or Larry Fink or BlackRock. You’re owning these on behalf of millions of
investors.
00:34:04 [Speaker Changed] Yeah, you’re spot on. So the number one misunderstanding is who owns
them? We are a fiduciary. The investors own those stocks. And then beyond that, it’s more of a
regulatory and technology problem to fix the regulations say that the asset manager votes the shares.
And so what we started to do on our institutional accounts were regulation permitted and it was just
technology and operations was to create a program of voting choice that other asset managers actually
then went and copied to say to institutions, let’s, let’s separate the two and if you wanna vote your
shares, go ahead and vote your shares. But it’s been much harder to do that for individual investors. So
being able to take a first step towards that is a really exciting progress.
00:34:47 [Speaker Changed] I I kind of feel like I’m cheating. Like I, I I brought in a ringer ’cause this is
just an exercise in confirmation bias for me.
00:34:55 [Speaker Changed] Well you’re
00:34:56 [Speaker Changed] Welcome. ’cause you know, it, it’s, you know, I have read over the years
that indexing is un-American, it’s Marxist, it’s a communist plot. There’s gonna be price fixing just everycrazy theory that you could come up with as to why indexing is so bad. And when you trace these
arguments back, they invariably are coming back to people who are the ones who are losing market
share to indexing. And it, it’s hard to have a legitimate discussion where, hey, you know, you are talking
your book and, and again, full disclosure for both of us, I’m talking my book because I’m a big believer in
indexers, but you guys, of the 10 trillion you have in assets, how much of this is indexed and how much
of this is more active management?
00:35:51 [Speaker Changed] Well, remember even within the index category, it’s becoming increasingly
active. So there are index strategies that take a lot of design principles around how to algorithmically
provide a strategy, right? And those are like everything, as we talked about these active risk
benchmarks, anything beyond market cap weighted. But also importantly in 2023 in the United States,
25% of new money going into ETFs was in active ETFs. So in 2019 actually the SEC passed a long awaited
ETF rule that made it much easier for any type of asset manager who wanted to distribute their strategy
in the ETF wrapper to do so. And there was actually a lot of questioning at the beginning, well because
ETFs are transparent, would they do that? Would they actually want to have to publish their holdings on
a daily basis or would they resist thinking that that was giving up some sort of secret sauce?
00:36:51 And as it turns out, a lot of managers were comfortable with the transparency. There was
some experimentation with non-transparent active ETFs. But as it turns out, I think those were pretty
easily reverse engineered. So going through the trouble of making it non-transparent didn’t help that
much given how much they trade. But investors still want active strategies. The question is, is that
manager delivering alpha or excess return such that the incremental fees justify it? And the
transparency of return that traditional ETFs give investors really holds those alpha seeking managers
accountable. But when they can produce it, people will pay for it and they’ll pay for it in an ETF wrapper.
00:37:34 [Speaker Changed] Hmm, really interesting. So let’s talk a little bit about the bitcoin ETF. What
are your thoughts on the process of, of getting here? What do you think is happening in that space now?
00:37:47 [Speaker Changed] It’s been a journey for markets, Barry. I think when I first started getting
asked about Bitcoin ETFs, it was about five years ago. And when I first heard about Bitcoin, it was
probably about 10 years ago. And for us, the question of whether we should provide access to Bitcoin in
an ETF is something that came about really in the last few years. There were issuers that filed for Bitcoin
ETFs before we did. There were issuers that actually launched futures based Bitcoin ETFs right before we
did. And I think that journey for the industry showed us a few things. First, it showed us with respect to
the futures ETFs, that that wasn’t really delivering what investors were looking for. Meaning for a whole
bunch of reasons, particularly position limits, the futures ETF actually underperformed spot bitcoin,
which is what investors wanted. Now, full disclosure, when I first got asked a few years ago about
Bitcoin ETFs and, and remember I am a bond market veteran, right?
00:38:47 So I thought to myself, look, I will come into the office like all day long. I get excited about
bringing access and transparency to markets where it didn’t exist before. So the high yield market, high
yield bond market for example, that’s a no brainer to put into an ETF wrapper, but to me it seemed like
it was pretty straightforward to just buy some Bitcoin using your mobile phone. And so for us to really
be convinced as to the value proposition of an ETF really took hearing from investors, all types of
investors over the subsequent years. And this is what we heard, number one we heard they wanted
access for to Bitcoin, many of them for different reasons, were interested in as as kind of an emerging
asset class that they wanted some access and they were trying to get access in a variety of ways, none ofwhich were fully satisfying. Whether they were buying it in a trust structure where they didn’t have a lot
of liquidity and high fees if they were buying a, you know, futures based product, which really wasn’t
delivering Bitcoin. If they were buying actual Bitcoin, they were having to deal with a whole new set of
infrastructure and pipes and custody questions, right? That weren’t transparent and hard to understand
00:39:56 [Speaker Changed] Passwords and anti-hacking and what’s easier than an ETF and what could
be harder than buying Bitcoin for the, you know, average mom and pop investor. It seems like a natural
marriage.
00:40:09 [Speaker Changed] And we heard from advisors too who were getting asked by their clients
and they wanted to provide whole portfolio solutions to their clients. So I think we really became
convinced, first of all that investors wanted access. And second, that the ETF would actually provide a
better access path than was currently available out there in the market.
00:40:33 [Speaker Changed] Why do you think it took so long for this ETF to get over the finish line? I
mean the SEC has been talking about this and having hearings and listening to investor input on this. It
seems like it’s been years, five years.
00:40:48 [Speaker Changed] Well first I think the narrative from investors really grew over the past few
years. The infrastructure in the crypto world was also evolving, but regulation and policy has been
evolving as well and still has a a long ways to go. So I think regulators needed to, and the SEC in
particular needed to hear from investors needed to work through the operating model. And then also
remember, I mean you and I have talked about what the past three years have looked like this SEC has a
very ambitious equity market structure agenda on their plate and that’s really been their priority. But I
think ultimately investor demand and desire for access in an ETF went out.
00:41:32 [Speaker Changed] I never had any doubt that it would eventually happen. I just had no idea if
it was this decade, next decade. But I’m curious as to your experience. What was it like going through
the process of applying for approval? BlackRock is such a giant participant in the market. I have to
imagine that you were one of the key firms the SEC was consulting with about things like security and
password protection and anti-hacking issues and all the custody issues that go with that. What was it
like processing the, oh, here’s a new ETF application. We’re just gonna sneak this in with a big pile of
other ETFs.
00:42:11 [Speaker Changed] Look, I think for all types of, of ETFs, as we talked about, it takes an
ecosystem to make them work. Given our experience as a market’s risk manager in all types of markets,
we engage frequently with all types of regulators who are a key part of the ecosystem on how things are
working with our observations around ETFs, around markets, around trading and around liquidity. So
with respect to the SEC, our engagement was much less about the if and much more about the how
here are the ways to provide robust and resilient access to investors in an ETF.
00:42:51 [Speaker Changed] So you guys came out much less expensive than just about every other
provider. Where do you think the Bitcoin ETF can go? Can this scale up to something along the sizes of
any sort of large index or is this gonna be a little niche product?
00:43:10 [Speaker Changed] I don’t know yet. Barry, I’m, I’m definitely curious your thoughts on that as
well. We know that there was demand for access. We know that there were, and are a lot of holders in
Bitcoin in vehicles that investors view as less preferable to the ETFs that are now out there. So in termsof the flows that we’re seeing, unclear, is that net new demand? Is that just wrapper switching demand?
For sure. So I think this is like early stages of, of how this story is gonna play out. I would say, by the way
though, I, I think we’re kind of middle of the pack When we think about what investors will look for in
terms of costs of an ETF, we really encourage people to look at what we call total cost of ownership,
which is not just the expense ratio but the liquidity, the spread, the access on exchange, the resilience of
the operating model. So all of those things contribute to total cost of ownership, which isn’t necessarily
all captured by the expense ratio.
00:44:06 [Speaker Changed] So there’s so many different ways to go with that. First, there’s some crazy
stat, 2020 5% of all bitcoin ever mind is lost, has been go lost, right? The passwords lost. The hard
drivers are so, so I think people, especially Main Street investors are looking for a familiar name.
BlackRock clearly is that. The other thing is all of the interim solutions that have come out, you
described that as wrapper migration. I have to think that the, the futures bitcoin products are all gonna
move to ETFs along with the various trusts and mutual funds. It seems this is the ideal structure to, to
put that in. Other than that, I have no guess as to where this, if you were to tell me five years from now,
it’s a hundred billion dollars, I would shrug and if you said, oh you never really caught on, it’s just a, a
couple of billion dollars, I I maybe I’m more surprised by that outcome. But it certainly in the range of
possibilities, it could be a giant smash, it could be pretty good or maybe it goes nowhere. I I, it’s hard to
judge if you are decentralizing finance. If that narrative about crypto is we are gonna take finance away
from the big banks, well then the whole concept of an ETF doesn’t make
00:45:25 [Speaker Changed] Any sense. Exactly. That was initially what we thought when people
approached us. Like there were a lot, we got defi so many calls from, you know, various crypto players
who wanted us to list an ETF. And the question we asked, the first question I asked was, why do you
even want this isn’t, this whole isn’t the whole point like disintermediation defi, like I’m pretty CFI with
this, with this, you know, ETF wrapper thing going. But I guess, you know, as it turns out it really is that
desire by investors for whole portfolio risk management. So for me, I guess I think about what is the best
long-term outcome for investors. And it’s probably an integration of these ecosystems as opposed to
them living separately so that you can manage risk holistically, but like you, we need to see how it plays
out.
00:46:15 [Speaker Changed] And the other thing that is obvious in hindsight, the whole concept of
trustless transactions where you don’t need to have a trust relationship with the opposite party. How
has that worked out? We’ve seen all the big crypto exchanges implode. It seems there’s just between
the criminals and the blackmailers and the, you know, just crazy run of crypto criminals doing it yourself
seems so fraught with risk. But if I could say to BlackRock, Hey, I’m gonna outsource all of my risk
management to you take care of the custody, take care of the passwords, I don’t want to deal with any
of this stuff. Just seems to be so much easier. I guess it’s laziness. I want the most friction-free approach
to making a a purchase and I don’t want to have to engrave a password that’s 97 letters long on a piece
of metal and bury it in my backyard. That that doesn’t appeal to me. So what are you hearing from
others in the space in terms of what they’re looking for in, in a crypto ETF?
00:47:26 [Speaker Changed] The convenience of ETFs is incredibly compelling for investors. They
understand the ecosystem. Now, importantly with the Bitcoin ETFs, the institutional grade custody is
really important for investors as well. Now you know, to your question about the, the crypto ecosystem
separate from ETFs, I think there’s a lot of questions there around how that evolves in terms of whatwe’ve seen so far. Is it the technology that’s created it or is it really the fact that there’ve been no
guardrails around the ecosystem that is built around it? I would say the technology has a lot of promise
in terms of its transparency and auditability. This is a technology that presumably could actually
decrease the utility for illicit finance. However, we would really need a regulatory and policy
environment supporting it. And I think that’s where there’s a lot of questions, particularly in the US
around future directions. So
00:48:23 [Speaker Changed] We have a Bitcoin ETF, what about other coins like Ethereum?
00:48:26 [Speaker Changed] We’ll have to watch this space I think. I think there’s really, with respect to
what we hear from investors, there’s one other coin right now and then a whole lot of coins that we’ll
just call them alt coins, right? But the question is to whether investors are interested in an Ethereum
ETF. Yes, we’re definitely hearing that They are, I think we’re early days of bitcoin, ETF trading. There’s a
lot of, you know, policy and regulator change that will probably happen in 2024. But we’ll have to see
what happens from here. And
00:48:57 [Speaker Changed] And the BlackRock I shares bitcoin ETF is Ibit right? That’s right. That’s the,
the stock symbol. What have the asset flows looked like? Where is this, is this thought of as a successful
launch? Where have you gone so far in assets under management there?
00:49:14 [Speaker Changed] So ibit is a little bit over $5 billion in really assets.
00:49:19 [Speaker Changed] That’s pretty quick to 5 billion considering how new this is.
00:49:22 [Speaker Changed] It is, and remember this dynamic that we talked about with respect to
wrapper switching. So we do know that there were a lot of, you know, bitcoin holders that were in
wrappers that they felt were less convenient, less transparent, maybe didn’t offer them the same sort
of, you know, custody that they have. And also maybe holders who are also interested in, in being able
to lend out et f shares where it was harder to deploy securities lending type trading in underlying crypto.
So I think this, this question that we were talking about before in terms of where does the long term
demand come out, it really depends on, on how investors and how advisors think about this in the
context of portfolio allocation.
00:50:02 [Speaker Changed] So I’m gonna assume BlackRock doesn’t take Bitcoin or do you, if a client
calls up and says, hey I have a million dollars in at at my bid X custodian and I want to transfer it into an
ETF, is that something a broker can do, a custodian can do? Or are we not quite at that point yet? Oh
00:50:21 [Speaker Changed] We are absolutely holding crypto on behalf of our clients in these ETFs. I, I
would think of it very similarly to gold where an investor who buys our gold ETF or our silver ETF, we
have a custodian who is storing silver bars or gold bars in their vault physically it’s the same thing in
Bitcoin. So we work with a custodian who is storing the actual Bitcoin for our investors in cold storage.
And on a daily basis we are sweeping actual coin into that cold storage and that custody and the fact
that they are actually owning the crypto, that’s an important part of the value proposition. That’s
00:51:03 [Speaker Changed] Really interesting. Since all bitcoins are created equal, I assume it’s not like
this fund manager or that stock screener or that index at a certain point it has to come down to cost.
Given your guys’ expertise scale, the ability to drive costs down. Is this just gonna become a a, a race to
the bottom in terms of fees or how do you see this evolving over time?00:51:32 [Speaker Changed] Investors care about total cost of ownership areas we were talking about
00:51:36 [Speaker Changed] Before. It’s not just the fee, it’s everything that’s involved with,
00:51:38 [Speaker Changed] It’s not, it’s the liquidity, it’s the on exchange access, it’s the diversity of the
counterparty ecosystem. All of these things you can measure broadly in thinking about market quality. Is
there an options ecosystem on the ETF and importantly the operating model matters as well. How is the
custody working? Is it you know, institutional grade custody? And if you really wanna get into the
details, you will start to see differences in some of the operating models as you would with commodity
ETFs as well.
00:52:08 [Speaker Changed] So it’s not strictly gonna be a competition based on fees there. There are
other factors there. ’cause you guys have the ability to dominate in terms of fees versus smaller
competitors. You know, my instinct is, oh we can dominate this market share by just undercutting
everybody else. It sounds like you’re taking a more holistic approach than that.
00:52:31 [Speaker Changed] We do take a more holistic approach and I think that’s what investors ask
us for. We’re certainly seeing this in the fixed income ETF complex, particularly in treasury ETFs where
there’s been a lot of interest and attention lately in the longer part of the curve. And what we will see is
as is ETFs that have much more liquidity options, ecosystems will actually maintain higher price points.
But from an investor’s experience perspective, probably a lower total cost of ownership and they’re
bigger.
00:53:03 [Speaker Changed] Hmm, interesting. I haven’t seen a whole lot of marketing for ibit. In fact, I
haven’t seen a whole lot of marketing for many Bitcoin ETFs, although they’re starting to bubble up
online. Is this a product that requires a lot of marketing muscle or is this something that hey, if you
wanna buy a Bitcoin ETF, you know where to go find one.
00:53:25 [Speaker Changed] This is a product that was launched in answer to investor demand for
access. So it really is a journey of education in terms of what access we’re providing and for investors
who want to learn more, not just about Bitcoin, but also it’s an opportunity to teach investors about
ETFs to get them to participate in a markets ecosystem that allows them to get diversified exposures
across lots of different types of asset classes. So for us it’s an opportunity to talk about access to
markets in a broader way. And that’s exciting. It’s gonna bring us the next, you know, a hundred million
of of savers into equity and bond markets
00:54:05 [Speaker Changed] And, and this is still really very early days, right? How, when did the Ibit
come out? Second
00:54:11 [Speaker Changed] Week of January.
00:54:12 [Speaker Changed] I read somewhere you were like the fourth or fifth largest flows for Bitcoin
ETFs without doing a whole lot of marketing. What does that say about where investors wanna manage
their risk, who they’re comfortable with, who they’re familiar with?
00:54:27 [Speaker Changed] I think that looking at the Bitcoin ETF flows, you do have to be very
sensitive to the wrapper switching dynamics and what’s driving it right now. But
00:54:35 [Speaker Changed] But you weren’t running well you running a futures Bitcoin ETF.00:54:41 [Speaker Changed] No, we weren’t running a futures.
00:54:42 [Speaker Changed] So it’s not like it was coming from internally. This is flows from outside.
00:54:46 [Speaker Changed] Oh, absolutely. Yeah. No, when I say wrapper switching, I’m talking about
all different types of, of wrapper switching. Whether it’s from a trust, whether it’s from a futures ETF or
whether it’s somebody who is holding Bitcoin who actually, you know, would prefer to hold their Bitcoin
in any tip because they’re worried about losing their key or whatever it is for the reasons
00:55:03 [Speaker Changed] That we, it seems much talked about. Right? It seems much such a way to,
to do it.
00:55:05 [Speaker Changed] So, so we were talking earlier Barry about flow and tell, what do you read
into from flows? So the point that I’m just making here is a month in it’s a little early to extract anything
about demand for Bitcoin. It’s very clear what investors are saying about ETFs and their desire to
manage whole portfolio risk and the convenience of the wrapper for the exposures that they want. The
ETF is the first choice and I think you’re gonna have to just have me back in a couple of years to see what
the Bitcoin journey is.
00:55:36 [Speaker Changed] So, so I don’t wanna put words in your mouth and I’m gonna say what you
are not saying. We already know Vanguard came out and they said they’re not gonna do it. State Street
seems to be lagging. I can easily see BlackRock being the dominant bitcoin ETF 12, 18 months from now.
Especially ’cause you don’t have those internal flows that some of your Bitcoin competitors do and
you’re still kicking butt. So I’m being complimentary and you’re kind of being coy about it and I
understand what, what your corporate charge is, but I think it’s a really fascinating story and it’s gonna
be interesting to watch what happens with Ethereum. But really it’s come down to a couple of coins that
serve slightly different technological purposes and then the rest of the technology around it. It feels like
we’ve been talking about a Bitcoin ETF for years and years and, and now it’s here and, and $5 billion in a
month is, you know, just kind of bonkers. Let’s leave the, I bit story behind and jump to my favorite
questions that I get to ask all of my guests. Starting with what are you streaming these days? Tell us
what you’re watching or listening to.
00:56:51 [Speaker Changed] I know you always ask this Barry. So, so here’s the secret with me in
podcasts, I do listen to them. I’m not a regular on any, my trick is that if there’s a topic I wanna learn
about or a person that I’m interested in, I search for that and just listen to recent podcasts. So I’ve been
interested in hearing how people are covering Bitcoin ETFs and, and I also actually currently am listening
to a podcast with a woman named Randy Braun, who we are having speak at BlackRock, but she just
wrote the New Playbook for Women at Work and I’m excited to meet her. I’ll be interviewing her. So
that’s how I listen to podcasts.
00:57:23 [Speaker Changed] What, what about Netflix, Amazon Prime, anything like that?
00:57:27 [Speaker Changed] So my husband is the curator of family shows and right now he’s going
through like a zombie series phase. Okay. So, so I don’t have a current show that I’m, that I’m super
00:57:37 [Speaker Changed] Excited about. Not a zombie fan, not a big zombie fan. I’m
00:57:39 [Speaker Changed] Not a big zombie fan either. Either. Yeah,00:57:41 [Speaker Changed] Everybody talked about Walking Dead and it’s not what I wanna see
00:57:45 [Speaker Changed] To relax. I love Buffy the Vampire Slayer,
00:57:47 [Speaker Changed] But that’s a whole D first of all, it’s got an element of humor and wit in it. It
inverts the whole model of, instead of the pretty cheerleader being killed by the monster, it, it’s
00:57:59 [Speaker Changed] A exactly
00:57:59 [Speaker Changed] It, it turns it on its head and she’s the, the Vampire Slayer from its
inception. It has a certain snarky knowingness that I, I just didn’t pick up in the Walking Dead. The
Walking Dead was just Awar
00:58:12 [Speaker Changed] Fest. But very, I’m really happy to hear you’re a Buffy fan.
00:58:15 [Speaker Changed] I’m a big sci-fi geek, so Me too. And it’s always funny when you discover
people that you would never in a million years guess are like deep sci-fi nerds. So it kind of comes with
the math territory. Yeah, there’s a big, you know, the Venn diagram has a big overlap with that. I’m still
have an image in, in my mind of, I I, I don’t remember if it was the series of the movie where it’s Peewee
Herman at the end, where he’s impaled on the stake and the death scene of him just going, ah, ah, just
slowly dying it, like that sort of hilarious parody of the genre. If you’re a, a film buff or a sci-fi, you have
to really appreciate that. It’s just, it’s classic. Most people, you know, don’t make movies that way. But
it’s really interesting. I don’t remember if last time we spoke about my two favorite streaming sci-Fi
recommendations.
00:59:11 I don’t think so. So one is Altered Carbon, which is this short two season series that if you’re
like a hardcore sci-fi geek, it’s amazing. I’ve heard of it. And then second on Amazon Prime was The
Expanse, which is insane and just, it morphs over time and goes in all sorts of crazy places. But the
universe, it creates, that’s not a million years in the future. It’s not radical technology. It, it’s far enough
in the future that people live on the moon. People live in Mars. People live out in the work in the
asteroid belt and they live out on, I think Titan, one of the moons of Jupiter. And then what are the
geopolitics of the Belters, the Earthers and the Martians? So the technology is close enough to today
that it’s very believable and the world that it creates is just, it’s completely mayhem. Really, really
fascinating. You don’t have to build weapons if you have the ability to just heave asteroids towards your
enemy. It’s just wild. So it definitely takes a couple of wacky turns in the latter seasons, but the whole
ride is, if you’re a sci-fi geek, you may, you may appreciate
01:00:28 [Speaker Changed] It on my list.
01:00:29 [Speaker Changed] Let’s talk about your mentors who helped shape your career.
01:00:33 [Speaker Changed] My earliest mentors were actually in theater. I had my first real backstage
experience being a stage manager. The head of the drama department reached out to me. He wrote me
a note afterwards and he let me follow him everywhere and just taught me a lot. But he wrote me a
note that said, and I kept this note for years that said, you’ve got what it takes, Samara. Thanks for
sharing it with us. And I remember I saved that note. And even when I was doing things that had nothing
to do with theater, it gave me a lot of confidence. So I would say that was kind of my first real
mentorship experience.01:01:06 [Speaker Changed] You mentioned some books earlier. Let’s talk about some of your favorites
and what, what you’re reading now.
01:01:10 [Speaker Changed] Well, now that you said the sci-fi thing, I will share my favorite book that I
read in 23. I dunno if you’ve read this. It was called Cloud Cuckoo Land, which is no a really cool book.
It’s I think six or seven different intertwined stories that range from ancient Greece to sometime in the
future. But it’s a story about hope and resilience and space and time and connections. And I thought it
was just gorgeously written and I read a lot of fiction and I like things that just kind of expand how I
think about the world. So I would definitely recommend Cloud Cuckoo land. And then I’m also a markets
history nerd and I always will be. So I am reading right now the Bitcoin standard, which is less about
Bitcoin, I think, and more about the history of money and the ways civilizations have sought to find
different ways to transfer value across space, across time. That’s fascinating to me. And I think really
instructive in thinking about the future markets.
01:02:16 [Speaker Changed] Did you happen to read either of the two big crypto sand Bankman, freed
FTX books, either going Infinit or number go up? They’re both delightful in different ways. Number goes
up is a little more horrifying. ’cause you see the CD Underworld of how criminals, yeah.
01:02:36 [Speaker Changed] You know,
01:02:37 [Speaker Changed] And human traffickers use Bitcoin, use all sorts of crypto, but it’s really a
great work of journalism and, and, and revealing and going infinite. Anything Michael Lewis writes is
always gonna be delightful. So our last two questions. What sort of advice would you give a recent
college grad interested in a career in investing, ETFs indexing any of the work you do at BlackRock?
01:03:03 [Speaker Changed] If they are interested, my advice would be to go for it. I talked to a lot of
college grads who are wondering, will I be good at this? Should I try it? And look, I had a theater
background and I gave it a shot. There are so many different ways to be successful in investing in
markets, and I’ve heard people say, you know, know your strengths and lean into your strengths. And
sure, that’s true in the long term, but I think college and learning, and again, I’m saying this as a parent
of teens, it’s about uncovering your passions and leaning into those. You have no idea what you’re
gonna be good at until you try. So if you are interested in investing and in markets, there’s so many
different jobs and types of ways to get involved, whether it’s at an asset manager or a trading firm, or a
broker dealer or a wealth manager. So get your foot in the door, start to see if it is, you know, what you
want it to be.
01:03:57 [Speaker Changed] And finally, what do you know about the world of investing today? You
wish you knew 30 years or so ago when you were first getting started?
01:04:05 [Speaker Changed] The moments that feel the worst in markets, the scariest, the most volatile
are the moments where you can define the outcomes that you’re delivering investors and, and define
your career. I look across my career at these moments that I thought, oh my gosh, we never thought,
you know, this, this sort of flash crash, this sort of dislocation, this sort of black swan event would
happen. But over the course of a 30 year career, which I’ve had, there have been many of those. And
what we learn in those moments, how we stay close in those moments, manage risk for investors, and
what we learn coming out of them are the biggest contributions we can make from a portfolioperspective. And, and I think from a market’s perspective. So it would’ve been interesting to have been
told that on my first day of work, which was about 30 years ago,
01:04:56 [Speaker Changed] I I love that answer. I I have a vivid recollection in the middle of the
financial crisis of saying to one of the traders, a line from Apocalypse Now, the Deval character, you
know, someday this war is gonna end. And he says, with a, a, a bit of longing and bittersweet recognition
that it’s a unique moment in time and drink it all in. ’cause you’re not gonna see anything like this again.
And I, I think people sometimes don’t appreciate that, at least in the mayhem of the moment. Exactly.
Real, really fascinating take on this. Samara, thank you so much for being so generous with your time.
We have been speaking with Samara Coh. She is Chief investment officer of ETF and Index Investments
for BlackRock. If you enjoy this conversation, check out any of the 500 previous discussions we’ve had
over the past 10 years.
01:05:52 You can find those at iTunes, Spotify, YouTube, wherever you get your favorite podcast. Check
out my new podcast at the money short, 10 minute conversations with experts about issues that matter
deeply for your earning spending, and most importantly, investing money at the money wherever you
find your favorite podcasts. And in the masters and business feed, I would be remiss if I did not thank
the crack team that helps us put these conversations together. Paris Walt is my producer, Juan Torres is
my audio engineer. Sean Russo is my researcher. Atika Al Bru is my project manager. I’m Barry Ritholtz.
You’ve been listening to Masters of Business on Bloomberg Radio.
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