Interviews: ETFs Bring Answers

Covid has made everyone in the world take a step back and re-evaluate their priorities and goals. This means that as the economy recovers, with unemployment now at a 16-month low of 5.4%, many folks are reviewing how they interview new employees and job seekers are dusting off their resumes. As a result, there is going to be a metamorphosis around a corporate culture. Companies that do not adapt will see loyalty dilution at the corporate level along with the brand level. Ironically, this aligns well with the culture at Toroso. Our founders envisioned a culture that drives business growth from a spirited group of independent thinkers and self-starters. Philosophically, it is the belief that independent thinkers embrace disruption and entrepreneurship and generally have a willingness to cater to customer demand. With this in mind, in this week’s blog we share some interesting articles about interview techniques. Note that as a company, we are now about 32 people, which is triple where we were 2 years ago.

People often make the mistake of not thinking of themselves as CEOs. This is a mistake because a person’s career is unquestionably their largest asset, well beyond the value of their house or their 401k. Independent thinkers, along the lines of the development of the GIG Economy, must consider their career a cash flow machine. To that point, here are some links. Remember – your own CEO lifestyle depends on your ability to answer these questions.

Okay, but maybe you don’t want to stress about being your own CEO. Here are a couple more links of basic questions.

What does this all have to do with ETFs, investing and or planning? First, let’s acknowledge a bit of the obvious. Growth in thematic ETFs is here to stay, but with low barriers to entry AUM, success often draws competition. If the kitchen is too hot, get out. Scale is not easy, and in a down cycle, many will fail. Second, investing in the thematic space requires an active ability to identify where the hockey puck is going in terms of business disruption. Large “passive” market cap weighted ETFs are affected by thematics and disruptive decision factors. Investors in large market cap weighted ETFs are outsourcing the impacts of company failure rather than trying to anticipate the factor. A proactive approach to the opposite strategy is the Graniteshares XOUT Large Cap, but the beauty of embracing thematics is that there are 270 choices. Third, the investment business which is constantly under expense pressure requires massive scale. Most of us work hard and want to do the right thing, but too many financial advisors are afraid to ask for the referral, or be aggressive and sophisticated in their marketing efforts. If your pipeline is not growing by 20-50% a year, you are relying on market appreciation to grow your business. Wow, talk about a recipe for failure!

According to the ETF Think Tank Tool, assets in Thematic ETFs stand at $184.165. And guess what? Investors are willing to pay up for this opportunity. The average expense is almost 70 bps. Note that funds that are not delivering alpha will probably go away in three years.

Getting back to resumes, interviews and great questions to ask CEOs. Investing in your career is about identifying the right disruptive companies, sectors and industries to align yourself with. If you are an employee or entrepreneur, you should look at ETFs as a screening tool to identify where you want to work. If you are into Sports Management, look at the companies held in the ETFs (MVP). If you are an employer looking to grow in that same field, think about why you are not listed. If you are a CEO evaluating a company in the Robotics and Automations industry to streamline your operations, check what ROBO Global is investing in. These are the companies that have been identified as leaders in their field. Our message – use the market to identify the leadership.

The next time you are interviewing someone, as employee or employer, you should ask them what ETFs they feel they are most aligned with for the long term. As the CEO of your own career, you should know where the hockey puck is going. As the CEO of a company, you absolutely should know who your competitor is, and why they are listed as disruptors, and you are not.

P.S. If they don’t know anything about ETFs – don’t hire them! Clearly, they are useless!


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