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Transcript
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[Paul Tyler]: hi this is paul tyler and welcome to another episode of that annuity show ramsey
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[Paul Tyler]: welcome again
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[Ramsey Smith]: always great to be here
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[Paul Tyler]: all right we’ve moved to sweaters i i didn’t bring mine today with ties to shirts
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[Paul Tyler]: i know it’s what’s
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[Ramsey Smith]: i needed to mix it up like it was nothing but sort of a typical brooks brother’s
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[Ramsey Smith]: blue shirt for the first like a hundred and forty two episodes so i’ve mixed it
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[Ramsey Smith]: up now
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[Paul Tyler]: that’s that’s great hey we have a really interesting show today
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[Paul Tyler]: and it’s it’s going to be out of in indices we’ve had a lot of conversations with
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[Paul Tyler]: people about indices where they fit in the products and we thought hey listen why
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[Paul Tyler]: don’t we actually bring some actual experts on who run one and today we have
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[Paul Tyler]: representatives from the nasdaq one hundred index
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[Paul Tyler]: and i am going to say full disclosure
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[Paul Tyler]: my company by day we are proud partners with nasdaq one hundred we just
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[Paul Tyler]: actually added the nasdaq one hundred to a number of our flagship fi products but
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[Paul Tyler]: we just want to go deeper and understand what it is and i’d like to welcome two
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[Paul Tyler]: individuals Efram Slen who is the head of index research and Mark Marex who
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[Paul Tyler]: is the senior specialist nasdaq excuse me senior specialist of the nasdaq indexed
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[Paul Tyler]: research function mark that i think i clobbered your your title
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[Mark Marex]: you were totally fine thanks paul
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[Paul Tyler]: totally fine alright hey after mark welcome
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[Efram Slen]: glad to be here thanks for having us
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[Paul Tyler]: hey thanks
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[Ramsey Smith]: like
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[Paul Tyler]: hey listen first question is
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[Paul Tyler]: nasdaq nasdaq indices nasdaq index
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[Paul Tyler]: you kind of say nasdaq and somebody says oh yeah the nasdaq index but i know the
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[Paul Tyler]: world’s a lot more complicated than that can you just kind of lay out maybe after
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[Paul Tyler]: from like
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[Paul Tyler]: what in when we say index what index are we talking about how many indices could
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[Paul Tyler]: we be talking about that the nasdaq is responsible for creates
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[Efram Slen]: think thanks ball it there are actually over forty five thousand indexes that
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[Efram Slen]: nasdaq calculates right just like some of the other big big index players out
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[Efram Slen]: there there are actually hundreds of the thousands of indexes that are calculated
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[Efram Slen]: there are only a handful that people really know globally so when you think of
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[Efram Slen]: nasa i can hear every single day people say the nasdaq went up the nasdaq went
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[Efram Slen]: down that’s actually the nasdaq composite that’s usually being referenced that’s
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[Efram Slen]: the index comprised of all securities listed on the nasdaq stock exchange so
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[Efram Slen]: that’s over a couple thousand names as opposed to the nasdaq one hundred which
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[Efram Slen]: folks still know it’s very very prominent it’s the one that’s actually the
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[Efram Slen]: barometer for the invesco qq et f and the products that you were talking about
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[Efram Slen]: right it’s an index comprised of the one hundred largest nonfinancial companies
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[Efram Slen]: from the nasdaq composite so when people tend to say the nasdaq went up and na as
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[Efram Slen]: they went down they’re actually usually referencing the composite but a lot of
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[Efram Slen]: times it gets interspersed and confused with the nasa one hundred which is where
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[Efram Slen]: all the products really
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[Paul Tyler]: how many
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[Efram Slen]: are tracking
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[Paul Tyler]: yeah and
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[Paul Tyler]: maybe just explain the mechanics so companies in the nasdaq one hundred it’s out
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[Paul Tyler]: of the one hundred
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[Paul Tyler]: how does that actually happen like is this monthly weekly
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[Paul Tyler]: what’s the process do you how do you actually manage something like this
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[Efram Slen]: so so back in nineteen seventy one maybe even give this this kind of breakdown so
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[Efram Slen]: back in nineteen seventy one when nasdaq the exchange launched that’s when the
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[Efram Slen]: composite was created fifteen years later we launched the nasdaq one hundred as
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[Efram Slen]: the tradable version right so once a
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[Ramsey Smith]: what
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[Efram Slen]: year since nineteen eighty five we have an annual reconstitution it’s a rules
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[Efram Slen]: based transfer process where the one hundred largest nonfinancial companies are
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[Efram Slen]: selected that happens every december and it’s called the quad witch day of the
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[Efram Slen]: third friday of december the other three quarters just a rebalancing that occurs
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[Efram Slen]: right so weights are reviewed and ensured that they are meeting all the
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[Efram Slen]: regulatory elements there so where necessary capping might might be applied
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[Efram Slen]: yeah so that’s it again in a nutshell the the nasdaq one hundred
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[Efram Slen]: again once a year that’s when names are are added again they need to be non
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[Efram Slen]: financial and they meet a variety of other criteria but the most important being
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[Efram Slen]: that they’re listed on the nasdaq exchange
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[Ramsey Smith]: are there who who actually makes the decision so if you look at the index indices
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[Ramsey Smith]: that are out there you’ve got s p indices which are actually in some sense
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[Ramsey Smith]: actively managed and then you have
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[Ramsey Smith]: indices which are truly rule based where do you stand in terms you know what
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[Ramsey Smith]: determines what is added orle is it does somebody make a decision is there a
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[Ramsey Smith]: committee how is that managed
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[Efram Slen]: i’m glad you asked that ramsay so we are entirely rules based it’s something that
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[Efram Slen]: we really pride ourselves on and interesting and so if you look back at the
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[Efram Slen]: nasdaq one hundred one of the things that made us unique compared to the sn p
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[Efram Slen]: five hundred in particular is that tesla right made
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[Paul Tyler]: sure
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[Efram Slen]: it into the nasdaq one hundred in july twenty thirteen when it was first eligible
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[Efram Slen]: at a market cap of around fifteen billion dollars
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[Efram Slen]: fast forward seven and seven and a half years later when the s p committee said
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[Efram Slen]: yeah it’s eligible for the s p five hundred now it was at a market cap of six
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[Efram Slen]: hundred sixty billion dollars right so yeah we’re rules based transparent we’re
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[Efram Slen]: really proud of that
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[Paul Tyler]: and it interesting so you brought up tesla when i i think of nasdaq i think okay
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[Ramsey Smith]: your
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[Paul Tyler]: tech you know tech tech tech
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[Paul Tyler]: i guess
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[Paul Tyler]: what type of misconceptions
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[Paul Tyler]: do people make when they think of nasdaq and put technology and tesla in the same
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[Paul Tyler]: same bucket
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[Efram Slen]: so we actually think of teslas yeah it can be a tech company for sure it’s also
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[Efram Slen]: an auto company right there’s a lot of great things that they’re doing look i
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[Efram Slen]: said this to it to a colleague and some friends the other day a neighbor mine
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[Efram Slen]: just put solar panels on their roof made by tesla one of the coolest things i
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[Efram Slen]: think it’s the nicest roof in the block they do a lot more than just create some
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[Efram Slen]: of the nicest looking cars on the road but yeah it depends how you want to look
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[Efram Slen]: at it right they’re an innovative organization that’s actually the core that word
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[Efram Slen]: innovation
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[Ramsey Smith]: so
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[Efram Slen]: that’s what we think of when we think of the nasdaq one hundred or even the
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[Efram Slen]: nasdaq list listing venue in general in our company that’s again it’s a very very
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[Efram Slen]: often used word but the reason why we tend to think of it it’s just not not just
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[Efram Slen]: technology and of itself so if you look and you break down companies within
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[Efram Slen]: nasdaq one hundred some of the biggest names right that come up that you could
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[Efram Slen]: probably think from you you have alphabet you have you have amazon microsoft
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[Efram Slen]: apple meta platforms and so forth right so some of the biggest names out there
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[Efram Slen]: but not all of them are actually classified as technology by your general
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[Efram Slen]: classification standards actually only a handful only about half of those were
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[Efram Slen]: some of them are consumer discretionary right where is amazon actually fit like
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[Efram Slen]: they’re the biggest cloud provider in the world but where do they fit they’re
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[Paul Tyler]: or the grocery store i don’t know right
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[Efram Slen]: actually consumer
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[Efram Slen]: they grocery store that’s right so they’re actually classified as consumer
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[Efram Slen]: discretionary so again that’s a fun thing when it comes to classifications a lot
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[Efram Slen]: of it’s just perception and a lot of it just comes down to how the rules from
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[Efram Slen]: classification systems are actually putting companies into pockets
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[Ramsey Smith]: so you mentioned that uh that the companies have to be non financial so i thought
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[Ramsey Smith]: that was i actually was not aware of that and so i i’m curious you know in a
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[Ramsey Smith]: world where financial used to be something very clear before it was sort of
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[Ramsey Smith]: balance sheet intensive banks insurance companies et cetera but now we live in a
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[Ramsey Smith]: world of fintech where
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[Ramsey Smith]: the
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[Ramsey Smith]: there may be a balance sheet it’s balance sheet light and the technology is sort
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[Ramsey Smith]: of more sort of important part
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[Ramsey Smith]: of the description of the company where does fintech sit for you from your
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[Ramsey Smith]: perspective
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[Efram Slen]: so
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[Efram Slen]: we have to utilize again this goes back to the rules based transparent we
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[Efram Slen]: actually outsource the classification we don’t utilize we don’t make those
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[Efram Slen]: decisions ourselves we utilize
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[Ramsey Smith]: got it
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[Efram Slen]: the industry classification benchmark system to determine again are they
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[Efram Slen]: financials are they not where do they fit within the rankings so we don’t include
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[Efram Slen]: any companies that are classified as financials according to that bench
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[Efram Slen]: classification system called ic
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[Ramsey Smith]: understood
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[Efram Slen]: is the benchmark so companies like nasdaq ourselves we are excluded like t ro
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[Efram Slen]: price like cme group that are listed here in nasdaq who proudly have them this
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[Efram Slen]: year they’re excluded as a result of that classification
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[Paul Tyler]: yeah interesting so if if i were you know
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[Paul Tyler]: independent financial adviser presenting nasdaq one hundred to clients what would
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[Paul Tyler]: the composition look like you know ten years ago versus today i mean clearly some
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[Paul Tyler]: of those names are still there you mentioned tesla was in there i’m sure i bet
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[Paul Tyler]: amazon i bet google was but
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[Paul Tyler]: what what have been the major major shifts like from there then to now
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[Efram Slen]: so definitely in some that we’ve seen even more over the last couple of years
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[Efram Slen]: right companies like like zoom rising to prominence right with the work from home
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[Efram Slen]: trade that was seen over the last couple of years but to be perfectly frank the
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[Efram Slen]: story just continued to evolve
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[Efram Slen]: and the important dynamic here is that we try and make sure folks understand is
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[Efram Slen]: that the nasdaq one hundred itself post ah the tech bubble and burst it’s a far
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[Efram Slen]: different story so even ten years ago the story is actually pretty aren’t similar
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[Efram Slen]: today as it was ten years ago it’s the prior ten years that we’re trying to
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[Efram Slen]: ensure that people don’t have in the back of their minds
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[Ramsey Smith]: so one of the things that we chatted about you know ahead of the show is sort of
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[Ramsey Smith]: the profile of the nasdaq and the nasdaq one hundred in the market so we’re in a
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[Ramsey Smith]: place where over i call it the last really is ten years since the first custom
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[Ramsey Smith]: index came out but probably six or seven before they started coming out like in
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[Ramsey Smith]: in real numbers there’s been explosion of customized indices
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[Ramsey Smith]: in in the fia space and tell us a little bit about you know about i don’t know
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[Ramsey Smith]: how how you feel about competing in that market and why you think why you think
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[Ramsey Smith]: your index is something that’s a familiar one
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[Ramsey Smith]: you know is for many people maybe a better way to go
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[Efram Slen]: nasdaq one hundred the way we think about very many different there are many
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[Efram Slen]: different spots that it can fit into a portfolio but it is from an index
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[Efram Slen]: perspective right
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[Efram Slen]: it can be a large capital play it can be a large growth play it can be a thematic
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[Efram Slen]: play there are many different ways or even a technology play there are many
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[Efram Slen]: different ways that that this index can fit and it’s really up to frankly how
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[Efram Slen]: folks view that type of basket in their portfolio so a big part of what we tend
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[Efram Slen]: to do in our research is compare the nasdaq one hundred to the s and p five
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[Efram Slen]: hundred because we want to make sure again like i said before the call that
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[Efram Slen]: where the nasdaq was in in the early two thousand seconds to then twenty ten to
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[Efram Slen]: the twenty tens to today just such a different story we’ve seen such a big
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[Efram Slen]: maturation of companies balance sheets completely changing and flipping on their
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[Efram Slen]: heads right where today
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[Efram Slen]: when you think of the nasdaq one hundred maybe we don’t even think that we pay
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[Efram Slen]: dividends we do i mean it’s not a massive dividend paying um in index benchmark
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[Efram Slen]: but it’s actually half of what the s and p five hundred is as at the end of
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[Efram Slen]: february at around seventy basis points but we are fully fully fledged an index
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[Efram Slen]: that index dividend that is dividend payers and so forth so again it’s a pr
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[Efram Slen]: pretty pretty great uh story depending on how you’re looking to have it fit into
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[Efram Slen]: your portfolio
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[Paul Tyler]: yeah i guess how has the risk profile changed do you think of the companies over
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[Paul Tyler]: the last ten years in the nasdaq one hundred i mean i would think that if you
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[Paul Tyler]: shifted from maybe more tact to as you’re describing more mature companies with
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[Paul Tyler]: dividend pain you’d think the volatility the risk might go out however last
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[Paul Tyler]: couple of years have been crazy in terms of market volatility what’s your
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[Paul Tyler]: perspective on
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[Paul Tyler]: you know how how i would allocate you know clients’ funds to the
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[Paul Tyler]: nasdaq one hundred versus you know funds a you know indices a b or c
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[Efram Slen]: so i actually want to make sure i give mark a chance to jump in on this but one
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[Efram Slen]: thing that i’ll comment even just at before he even gets in the answer is that
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[Efram Slen]: you know we’re an index provider we’re meant to give
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[Ramsey Smith]: yeah
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[Efram Slen]: a spot for folks to understand and track benchmarks we’re not really giving
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[Efram Slen]: investment decisions so i just want to at least caveat
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[Efram Slen]: the answer there but
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[Paul Tyler]: now thank you
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[Efram Slen]: mark i’ll let you jump in thank you
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[Mark Marex]: yeah thanks ama i mean i’ll point out a couple of data
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[Paul Tyler]: i don’t know
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[Mark Marex]: points that we have one of which is a
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[Paul Tyler]: i don’t
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[Mark Marex]: you know very long term kind of graph of you know realized volatility when you
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[Mark Marex]: look at nasdaq one hundred versus something like the s and p five hundred which
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[Mark Marex]: is much broader but plays in that same large cap space right the volatility is
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[Mark Marex]: actually very very close over the last ten to fifteen years it’s maybe a
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[Mark Marex]: difference of two or three percent a year annualized on average
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[Mark Marex]: the really interesting thing though that you know we kind of explored
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[Mark Marex]: last year writing up a white paper about you know what the performance looked
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[Mark Marex]: like during the covid bear market and how that compared to things like two
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[Mark Marex]: thousand eight to things like the tech bubble the nasdaq one hundred actually
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[Mark Marex]: outperformed in terms of not just the drawdown being lower in march of twenty
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[Mark Marex]: twenty than the s and p five hundred but also volatility being lower and i would
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[Mark Marex]: say that speaks more than anything to the difference in the composition versus
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[Mark Marex]: ten or fifteen or even twenty years ago it’s not that the sector exposures are
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[Paul Tyler]: wait minute
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[Mark Marex]: necessarily different tech has continued to be pretty consistent fifty to sixty
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[Mark Marex]: percent of the index you get another twenty to thirty percent of the index coming
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[Mark Marex]: from things like consumer and health care that stays pretty consistent long term
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[Mark Marex]: even though the company underlying will grow larger and grow smaller and go
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[Mark Marex]: private and fall out and whatnot right but in terms of you know the reputation
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[Mark Marex]: that the index has gotten especially from those top five or so names right
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[Mark Marex]: they’re almost like a defensive play nowadays right they they’re extremely
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[Mark Marex]: profitable they’re very very efficient and generating cash and turning over their
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[Mark Marex]: assets they’ve grown their buybacks which kind of
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[Mark Marex]: overshadows the dividend under performance versus something like the s and p five
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[Mark Marex]: hundred they’ve grown their buybacks by literally hundreds of billions of dollars
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[Mark Marex]: over the past couple of years
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[Mark Marex]: and that i think speaks to you know why this index isn’t you know the same as it
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[Mark Marex]: used to be twenty years ago where you had a lot of companies that were still
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[Mark Marex]: early stage still were unprofitable weren’t doing things like dividends and
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[Mark Marex]: buybacks nowadays you have this very very solid fundamental core of the index of
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[Mark Marex]: about fifty percentage of the index is the top seven companies and they are all
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[Mark Marex]: massive fundamentally strong and sound companies that have this
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[Mark Marex]: tail added on top of it of companies that buy enlarge
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[Mark Marex]: disproportionately put innovation at the center of their business models that’s
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[Mark Marex]: what the index is about to me these days more than anything else
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[Ramsey Smith]: so another thing that that sort of was was on my mind as i was thinking about
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[Ramsey Smith]: thinking about your index is just what kind of what kind of assets are ifly under
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[Ramsey Smith]: management or benchmarked to the nasdaq one hundred like can you give some idea
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[Ramsey Smith]: to the audience of the magnitude of of whether it’s an etfs or fis or if it’s in
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[Ramsey Smith]: mutual funds just even ballpark figures like how much how much money looks how
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[Ramsey Smith]: much money is out there that looks to the nasdaq one hundred as its key benchmark
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[Ramsey Smith]: in order just in orders of magnitude
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[Efram Slen]: there are hundreds of billions of dollars that that track the nasdaq one hundred
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[Efram Slen]: across pretty much every single financial product wrap that’s been created right
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[Efram Slen]: from etfs to mutual funds to insurance products utd products futures options you
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[Efram Slen]: think of a product there is an ass at one product tracking it in some capacity
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[Efram Slen]: some possibly even somewhere in the world right so there are efs in well over
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[Efram Slen]: twenty countries in the world alone let alone other product wrappers the eme
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[Efram Slen]: features that track the nad seven hundred have grown
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[Efram Slen]: explosively over the last couple years so and the micro mi launching out of the
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[Paul Tyler]: next
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[Efram Slen]: cme here as well so
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[Paul Tyler]: it’s
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[Efram Slen]: tons of derivative trading going on in very increased capacity the cues hit hit
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[Efram Slen]: over two hundred billion dollars
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[Efram Slen]: recently enough and approaching backup on the nih qs that’s the invest qq et f so
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[Efram Slen]: yeah just hundreds of billions of dollars that’s the short answer there
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[Paul Tyler]: it well go ahead
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[Ramsey Smith]: so i just kind of add quickly to that so the reason i brought that up is that you
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[Ramsey Smith]: know it’s somebody
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[Ramsey Smith]: who was in this space in my prior career like one of the challenges that
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[Ramsey Smith]: one of the tensions was always between alright you come up with something that’s
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[Ramsey Smith]: creative and customized it may work if you look at history but is it tradable on
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[Ramsey Smith]: the other side you’ve got you know you’ve got something like the nasdaq one
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[Ramsey Smith]: hundred and some other indices which are very tradable which ultimately in
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[Ramsey Smith]: addition to being recognizable also brings the ability to hedge efficiently
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[Ramsey Smith]: because behind every one of every transaction every fia purchase there’s a
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[Ramsey Smith]: hedging transaction so that’s something that i think is something that you
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[Ramsey Smith]: there’s not a question here just just a comment but i think
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[Ramsey Smith]: that is an important element
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[Ramsey Smith]: a of using a broad based indic index rather
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[Ramsey Smith]: in this in the fia space
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[Efram Slen]: i’ll even go on top of that and i i appreciate you saying that ramsay it’s great
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[Efram Slen]: this index has no they said launched nineteen eighty five is an over three seven
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[Efram Slen]: year track record right so the products have been around for quite a long time
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[Efram Slen]: like the cues launched in ‘ninety nine right and that’s again one of only saying
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[Efram Slen]: before many different products and product wrappers so yes having that track
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[Efram Slen]: record absolutely stands without question
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[Ramsey Smith]: really
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[Paul Tyler]: now well of course from a macro perspective
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[Paul Tyler]: we just get through covid only to have this awful war breakout
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[Paul Tyler]: in ukraine tell us how has this impacted the nasdaq one hundred
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[Efram Slen]: so it it hasn’t from a an actual inclusion perspective so there were no russian
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[Efram Slen]: equities in the nasdaq
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[Efram Slen]: one hundred but like many index providers out there like and p and m s c i fy
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[Efram Slen]: russell
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[Efram Slen]: all four of us actually put our announcements to remove russian equities from
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[Efram Slen]: from all over index benchmarks
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[Paul Tyler]: interesting so no no change no
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[Paul Tyler]: if i were sitting down with the client
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[Paul Tyler]: no company no russian company was in in nasdaq one one hundred that would have
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[Paul Tyler]: been pulled then
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[Efram Slen]: that’s correct
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[Paul Tyler]: okay interesting
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[Ramsey Smith]: so what are what do you see as sort of the the opportunity set in this space
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[Ramsey Smith]: broadly so just as as we mentioned before
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[Ramsey Smith]: a lot of people are getting get into the index game so you mentioned that there
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[Ramsey Smith]: are forty thousand just just you alone manage forty to forty five thousand in
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[Ramsey Smith]: indices is that right
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[Ramsey Smith]: well
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[Efram Slen]: that’s right that’s right
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[Ramsey Smith]: what what’s interesting to me is that i think they are only the last time i
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[Ramsey Smith]: checked there were like thirty five hundred stocks in the u s and the u s market
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[Ramsey Smith]: the wilshire five thousand doesn’t even cover five thousand stocks anymore back
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[Ramsey Smith]: when i started it had seven thousand in it right now now i think it has a lot
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[Ramsey Smith]: less so yeah i’m curious do you have a sense for what the future is
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[Ramsey Smith]: in indexes whether it’s broad based or more customized indices
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[Ramsey Smith]: it’s it’s been a remarkable proliferation
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[Efram Slen]: there absolutely has been um there are more and more ways to slice and dice
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[Efram Slen]: things than you can imagine so of the forty five thousand plus indexes that we
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[Efram Slen]: offer many of them actually go back to one index it’s is a global equity index
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[Efram Slen]: benchmark of around nine thousand global equities from developed in emerging
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[Efram Slen]: markets
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[Efram Slen]: that cover forty four countries i mentioned the exclusion exclusion of of russia
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[Efram Slen]: as well as a large mid small cap all cap large mid cap different currencies
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[Efram Slen]: different ways to calculate with and without dividends before you know it you’ve
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[Efram Slen]: got again we could do it on a far more the way we did it but the way we have it
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[Efram Slen]: today it’s is over forty around forty thousand or so
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[Paul Tyler]: just
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[Efram Slen]: indexes from one
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[Efram Slen]: basket of nine thousand names now think about that
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[Ramsey Smith]: mo
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[Efram Slen]: from from from how the way things have continued to evolve over the last even
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[Efram Slen]: fifteen years in the index space it started out
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[Efram Slen]: beyond fifteen years as just ways for folks to track the markets right so there
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[Efram Slen]: are only a handful of indexes that people really paid attention to indexes
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[Efram Slen]: continued to come to market just in the benchmark variety that are regular market
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[Efram Slen]: cap literally what is the world valuing these indexes as and then we start to
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[Efram Slen]: have some new indexes come to market right now were equal weighted there were
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[Efram Slen]: fundamentally weighted different ways to
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[Ramsey Smith]: maybe
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[Efram Slen]: track and and select and manage portfolios and then we started saying all right
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[Efram Slen]: well what are the active managers doing how can we try and get exposure in
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[Efram Slen]: returns that are like what active managing that’s when the rise of smart beta
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[Efram Slen]: came around and it was you know where factor indexes came about so folks were
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[Efram Slen]: focusing on far more than just value and growth there’s look at underpinning data
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[Efram Slen]: points from balance sheets and financial statements and saying well i want to
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[Efram Slen]: focus in around this data point so mark brought up before buybacks right we have
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[Efram Slen]: a buyback achiever index here we have many dividend based indexes here we have
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[Efram Slen]: many multi factor indexes that can look at a wide range of data points and then
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[Efram Slen]: over the last several years thematics has been the new rage right that’s where
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[Efram Slen]: folks have been digging into not technology or financials or health care it’s
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[Efram Slen]: fintech right it’s a smaller baske games that are focusing on like we said before
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[Efram Slen]: just just those specific names looking at names that are in cloud computing only
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[Efram Slen]: at cyber security only you’re only going to get thirty fifty maybe seventy names
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[Efram Slen]: at most in some of these thematic baskets if you’re really pushing up to seventy
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[Efram Slen]: sometimes far less
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[Efram Slen]: and again that’s what we’ve seen really things continue to evolve and it’s been
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[Efram Slen]: an awesome thing to be a part of been in nasdaq or
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[Ramsey Smith]: she
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[Efram Slen]: over eleven years it’s been a great ride watching frankly the continued growth
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[Efram Slen]: and maturation of the space
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[Paul Tyler]: interesting well yeah tell us just a little bit about both your background so a
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[Paul Tyler]: you’ve been at nasdaq for eleven years
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[Paul Tyler]: you know tell us what got you nasdaq you know what what keeps you
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[Paul Tyler]: totally engaged as we can tell in this in this space
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[Efram Slen]: i i just love frankly i i love coming to work working with
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[Ramsey Smith]: the
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[Efram Slen]: folks like mark working folks like wealthy who in the space where you have to
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[Efram Slen]: have conversations around around the markets around what we’ve got going on but
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[Efram Slen]: what my job really entails to today i’m responsible for all the research content
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[Efram Slen]: that we put out across our index business
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[Efram Slen]: so when i started here at nasdaq i was a combination of new index development as
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[Efram Slen]: well as putting our content supporting our business but today the roles evolved
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[Efram Slen]: and i’m responsible for to all content support supporting the index space here in
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[Efram Slen]: nasdaq
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[Paul Tyler]: yeah mark mark you your background and
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[Paul Tyler]: what excites you most about
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[Paul Tyler]: this particular space in the in the market
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[Mark Marex]: thanks
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[Ramsey Smith]: yeah
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[Mark Marex]: yeah i mean i’m coming up on three years with nasdaq here and specifically with
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[Mark Marex]: ephram team
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[Ramsey Smith]: but
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[Mark Marex]: took a bit of more of a roundabout path to get here like ramsey i did my stint at
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[Mark Marex]: took a bit of more of a roundabout path to get here like ramsey i did my stint at
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[Mark Marex]: a big new york bank for about eight years in my case city coming out of college
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[Mark Marex]: a big new york bank for about eight years in my case city coming out of college
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[Mark Marex]: and my last role there was in sort of a client strategy and analytics role within
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[Mark Marex]: and my last role there was in sort of a client strategy and analytics role within
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[Mark Marex]: ib d
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[Mark Marex]: ib d
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[Mark Marex]: but really you know for a long part of that time at city my passion was elsewhere
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[Mark Marex]: and more in the realm of asset management
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[Mark Marex]: and specifically systematic strategy
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[Mark Marex]: research
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[Mark Marex]: and creation and execution that led me to launching a startup fund with a close
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[Mark Marex]: colleague of mine to trade u s equities long short on a very systematic basis
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[Mark Marex]: right and you know very risky endeavor didn’t end up working out long term but
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[Mark Marex]: really kind of cemented my desire to stay within that general space of you know
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[Mark Marex]: how do you design launch and then support
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[Ramsey Smith]: so
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[Mark Marex]: systematic strategies
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[Mark Marex]: that are data driven that are you know kind of fully transparent that offers
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[Mark Marex]: something unique
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[Mark Marex]: and i found that nasdaq
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[Mark Marex]: value proposition was very compelling from the perspective of you know it has
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[Mark Marex]: this industry leading index business that is very much underpinned just like s
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[Mark Marex]: and p right or m sci underpinned by this flagship product that everybody almost
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[Mark Marex]: everybody knows and has such a great
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[Mark Marex]: reputation in terms of the nasdaq one hundred but then you have all these other
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[Mark Marex]: interesting things going on under the hood that people you know outside of nasdaq
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[Mark Marex]: will really not have any idea about right things like designing indexes with
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[Mark Marex]: embedded options whether that is using options to juice your yield or to provide
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[Mark Marex]: downside protection or to minimize volatility on something like the nasdaq one
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[Mark Marex]: hundred you know we do that
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[Mark Marex]: as era mentioned the thematic space that’s been such a great source of creativity
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[Mark Marex]: and trying to figure out ways of how do you define a new industry that is driven
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[Mark Marex]: by a single technological breakthrough do you go peer play do you go uh sort of
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[Mark Marex]: broad based in coverage with that and working with clients every day to figure
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[Mark Marex]: out how do we design an index from the ground up that is rules based that is
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[Mark Marex]: transparent that is reputable and invest
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[Mark Marex]: it’s a
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[Paul Tyler]: my
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[Mark Marex]: great challenge because there’s no single right answer but i feel like we have
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[Mark Marex]: these guidelines these principles that move us in the direction of
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[Mark Marex]: putting out market leading products whether it’s thematic whether it’s smart beta
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[Mark Marex]: or something else day in and day out and that’s really exciting
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[Paul Tyler]: excellent okay so for ramsay and i have an appointment with a client i guess at
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[Paul Tyler]: two thirty we’ve got two hours to prep for this for ramsey and
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[Paul Tyler]: oh my
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[Ramsey Smith]: oh my go
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[Paul Tyler]: gosh i’ve gotta explain the nasdaq one hundred what what’s the best place to go
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[Paul Tyler]: to learn enough that i can actually represent your index and you know the the
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[Paul Tyler]: mechanics and and what’s you know and and the the stocks inside it so that i can
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[Paul Tyler]: give somebody
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[Paul Tyler]: who’s trusting me a good understanding of where their money is
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[Paul Tyler]: what their money is going to earn interest credits against
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[Efram Slen]: so there are a few spots where we have kind of content around the nasdaq one one
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[Efram Slen]: hundred so i’ll give you kind of both both locations and and landing pages so one
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[Efram Slen]: is nasdaq com backlash nasdaq dash one hundred the other one it’s a little bit
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[Efram Slen]: harder to find but perfectly perfectly honest but if you go to indexes nasma com
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[Efram Slen]: and you go in the search bar and look for nd x n dx which is the index ticker for
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[Efram Slen]: the nasa of one hundred or just type in nasa gash one hundred you scroll down and
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[Efram Slen]: be able to find get on that page and able to see kind of all the great content
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[Efram Slen]: there that we have around around the index
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[Paul Tyler]: oh that’s great thanks ramsey any final thoughts or questions this is your this
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[Paul Tyler]: is your space
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[Ramsey Smith]: so just just one one quick question so you’ve got forty forty thousand plus
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[Ramsey Smith]: indices and it sounds like you you know you interact very proactively with your
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[Ramsey Smith]: your clients you know i’m wondering sort of what are the various ways they it can
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[Ramsey Smith]: interact with you could a could some entity it could be an insurance company
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[Ramsey Smith]: could be a bank it could could be a dis an insurance distributor right can they
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[Ramsey Smith]: come to you and and
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[Ramsey Smith]: work with you to develop their own custom index that they can launch on their
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[Ramsey Smith]: product i guess it’s do you go which way do you go is it inquiry reverse increase
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[Ramsey Smith]: can you go both ways i’m just curious how how people can engage with you to
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[Ramsey Smith]: to create unique product
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[Efram Slen]: it’s absolutely both but our our favorites actually the one that’s in between
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[Efram Slen]: where it’s together right where we come together and say we have an idea and they
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[Efram Slen]: have an idea we come together we work together create the final solution for me
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[Efram Slen]: that’s the most exciting that i’ve been a part of and i know the team kind of
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[Efram Slen]: loves here of course it’s great when someone has their own view and we help them
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[Efram Slen]: get that out in the market or we have our own view we get that in the market my
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[Efram Slen]: favorite though is when everybody comes together and we’re able to create that
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[Efram Slen]: bin kind of thought into a final index solution
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[Paul Tyler]: okay well hey well listen uh after mark thanks for your time with the links
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[Paul Tyler]: in the show notes and really appreciate your time maybe we can another time we
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[Paul Tyler]: can actually come down to the the floor when it’s
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[Paul Tyler]: know we get through this whole covid and record a show there love to love to do
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[Paul Tyler]: that in new york sometim
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[Ramsey Smith]: sh
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[Paul Tyler]: so alright
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[Efram Slen]: that’d be awesome we’ll have have to do that
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[Paul Tyler]: listen yeah all right hey thanks so much ramsey thanks and uh joins you next week
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[Ramsey Smith]: i don’t know
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[Paul Tyler]: for another episode of that annuity show
The discussion is not meant to provide any legal, tax, or investment advice with respect to the purchase of an insurance product. A comprehensive evaluation of a consumer’s needs and financial situation should always occur in order to help determine if an insurance product may be appropriate for each unique situation.
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