Talk Your Book: A Better 60/40 Portfolio
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Today's Animal Spirits Talk Your Book is brought to you by Aptus Capital Advisors. Go to aptuscapitaladvisors.com to learn more about their whole suite of active ETFs, managed portfolios, OCIO services, investment support. They do a lot. Aptuscapitaladvisors.com to learn more.

Welcome to Animal Spirits, a show about markets, life, and investing. Join Michael Batnick and Ben Carlson as they talk about what they're reading, writing, and watching. All opinions expressed by Michael and Ben are solely their own opinion and do not reflect the opinion of Ritholtz Wealth Management. This podcast is for informational purposes only and should not be relied upon for any investment decisions. Clients of Ritholtz Wealth Management may maintain positions in the securities discussed in this podcast.

Welcome to Animal Spirits with Michael and Ben. Michael, one of the topics we've talked about with fund providers over the years, I love seeing this shift in people, is especially if they're more quantitative based, their initial thought is, I've developed the greatest model, investing model or portfolio or strategy in the world. I'm going to put it out there and people are just going to flock to it. And people are going to look at me and they're going to say, wow, you are amazing. Can't believe you created this investment product. And I'm going to put it out there and people are just going to flock to it.

And what happens is they quickly realize the greatest investment product or strategy in the world means nothing if investors or advisors can't or won't stick with it. And so eventually you have to make a decision

strategy or fund or product that people will actually use and that people can actually stick with. I think our friend, can I just add one, one little caveat to what you said? It's not just sticking with it because of course that's, that's a component, but before sticking with it, it's buying it. Yes. And being comfortable with it. Right. Understanding it. I remember our friend West grade did this study a number of years ago at Alpharchitect where he, he looked at like, let's say you could pick the best stocks over the next five years in advance.

And he looked at what the drawdown would be. And the drawdown would be massive, even with these big returns. And the point was like, no one could stick with this.

Anyway, we talked to JD Gardner today, who is a CIO and founder of Aptus Capital Advisors. And I remember when he first came out with their first strategy, and it was this super hard-charging momentum strategy. I think he came to see you in the offices. He pitched me on the phone, and it was like high- Close to a decade ago. Yeah, a long time ago. High tracking error. This thing was going to be- I'm sure the returns probably ended up great for that type of strategy, but it was something that it wasn't

It was hard to pitch that to people, especially advisors. Like, wait, what is this thing? You're just high octane. It doesn't make a lot of sense. They are probably one, I would guess, one of the faster growing active ETF shops that there is right now. They manage, I think, more than $4 billion, if I'm looking at the numbers correctly, a suite of products, and a lot of them are options-based. And when you hear this story, a lot of people might freak out when they hear about options if they don't understand all that stuff.

You know, I think part of it is the terminology, the gamma and delta and stuff. Like it's the Greek letters. Yeah. You know, but a lot of this stuff makes a lot of sense for the people that are trying to figure out the go between, between stocks and bonds or whatever it is. So we had a great conversation with JD today talking about their different suite of products, how they think about managing option strategies. So if you've never heard of them before, remember, check out AptisCapitalAdvisors.com. Here's our talk with JD Gardner from Aptis.

J.D., you guys are one of the more successful asset management firms that people might not have heard of. I don't know what ratio that is, but maybe it's the J.D. ratio. So for listeners who are not familiar with Aptis, what's your story? Yeah, the quick version is Aptis is we have two sides. We have an asset management business where we're focused on options-based active ETFs.

And that's a whole world we're pretty excited about. We want to continue to build that lineup and be what we would consider the premier options-based provider out there. And then the other side of our business is what we just call our services side. And that consists of OCIO support, outsource chief investment officer support to RIAs. We do a lot of middle office work.

So anything related to the independent advisory space kind of falls under the services arm. And so we've just kind of blended those two worlds together over time just because the opportunity has been, you know, that's how we've kind of got a foothold in the space. We've seen a huge influx of ETFs in the options space.

from anywhere from tail downside hedge risk to income, what was the opportunity that you saw to be able to use options in ETFs? Because this is relatively new things still. Yeah. So the big answer to that, Ben, is the active ETF rule that passed in 2019, I think officially, we kind of bet the farm on that.

So we saw like when we launched our firm, the ETF specifically, we feel like the whole world and still to a certain extent today,

views ETFs as like S&P tracking machines. And that's true. The vehicle is great for that. But we saw an opportunity to put active option management within the wrapper and still get some of those efficiencies from like a tax standpoint. And we felt like shareholders could really benefit. And so that was kind of what drove us to say, hey, look,

We want to be options-based, take some of the background, inject them into a 40s Act wrapper as efficiently as possible. So there was a structural need, and then we think there's an allocation need. We're big-time advocates that we think risk assets are going to outperform more conservative assets, and we want to give folks the exposure to that. And last thing I'd say on that, Ben, is like,

When you're launching ETFs from Fairhope, Alabama, the big decision is, do you launch something that's better than what already exists and you know that there's a market for? Or do you launch something completely new and you have to go explain that? And we have kind of a combination of both strategies.

So there's a lot of other providers in this space. Why don't you name names? Who's the worst? No, I'm just kidding. I was thinking about how to dance out of that question. So are you working with advisors and helping them construct portfolios within the ETF? Or is that like a separate business entirely? And what's the profile of the typical advisor that you all are working with? Because these products are pretty sophisticated. Yeah.

Yes, they are, but they're not. I'll answer it this way. There's kind of a strategy discussion and that could happen with a wire house advisor, an independent advisor, whoever. That's kind of where they're doing a lot of house, a lot of in-house work. And you're just trying to educate on here's the strategy. Here's how it impacts allocations. Here's how we use it.

The other side is when you partner with an advisor to like really drive efficiencies on the investment front and the ops front. It's a completely different conversation at that point because you're doing a lot more than just, you know, educating on the strategy itself. And that the sweet spot there is

Usually like 500 to 2 billion is kind of the sweet spot of firms we work with. We work with firms smaller and we work with firms bigger, obviously, but that's the sweet spot. And when you're doing this education on option strategies, how deep in the weeds are you having to get? Because if you really go into it, it could go over the head of a lot of people, especially if they're not investing people. And I'm guessing...

A lot of the advisors are reaching out to you because they say, listen, I want to focus on financial planning and running my business. The investing side of things, I want to leave to someone else. That's just not our forte. So how deep in the weeds do you get on this stuff when educating? Yeah, I think that's exactly right, Ben. A big reason for outreach, this is an obvious point, but I think higher compounded returns are attractive to everybody. And I think a lot of people are starting to get fed up with, you know, if you look at like

what traditional fixed has done. I think there's like a natural shift to more options-based, like look at buffers, look at all the stuff that you see. We're going to be, at least I'm biased, but I think we're going to be a beneficiary of this shift because I think we're kind of the best in the options-based space, saying that as the founder. And obviously there's some bias there, but I think the numbers support it. But from an education standpoint, I think we're

We're probably not great at a lot of things. One of the things that I'd say we're decent at is having a conversation about somewhat complex strategies, but using language and descriptors that are easy to digest. Because we realize advisors love it when we produce good results at the portfolio level. They love it even more when we're good partners to help them educate their clients. And you have to be able to communicate in a way that

you know use a lot of analogies that are easy to understand rather than talk about derivatives of derivatives so you all have a suite of etfs and we're going to get into some of them do you when you launch an etf like do you have any sense of what's going to take or what you think an advisor might think your best idea is or is do you still get surprised yeah no so

This is honestly the cheat code that we've had is we are in the trenches with advisors and we've seen the good, the bad, and the ugly.

And it like even our bit, our whole in our entire services side of our business, that whole thing was birthed out of like numerous conversations. Like when we were up in your office, whenever it was 15 or 16, you know, we were like naive enough to think we're just going to go tell a cool story, have a great strategy and we're going to raise assets. And it'd be like you would call me and ask me about I'm not just using you as an example, but, you know, I'd come pitch a product to you and you'd call me about some like

small cap allocation and what I thought about it. And it's like, I'll help you with this, but I'd rather you buy my fund. And so after 500 of those conversations, it's like, you know what? We probably need to have a services biz. And so all the strategy ideas, there's definitely some thought about like, what could the allocations use? But there's also a ton of like, okay, we've seen

X amount of dollars flow to these buffer strategies. Let's launch something that's better than that. Like that's, so we just, we have a cheat code in terms of like product roadmap. So obviously you, you guys went through that experience and you found your, you found your path, but

So it all worked out. But if you could have gone back to that point in time, what do you think was your biggest misunderstanding between what you thought you were launching and what advisors would actually be willing to buy? Yeah, freaking great question. If I could change anything, the early years would be, I would be less convicted that, hey, I'm going to launch super high active share products

Tracking era who who cares about tracking the error like we're just gonna educate through it and and we'll get that like if you look at our suite Ultimately what we do now is hey just give them the beta like allow more beta to be injected Instead cuz like I would go to Ben's office and say hey Ben like our first strategy was like this like crazy active share momentum and

where it was either going to be the best performing strategy or the worst. And when it was the best, guess what happened? Ben was like, JD, I can't buy enough of this. And when it was the worst, Ben's like, I'm selling all of it. And so instead of like having those types of strategies, we just kind of said, okay, well, we know there's a market for hedged equity. Let's launch what we view as the best version of that. We know that there's an opportunity to improve fixed. And let's just like sneak beta into allocations, but do it in a way that we're

We protect downside, and that seems to have really resonated. So I like in your story, you've all talked, and I've had a number of conversations with Brian Jacobs, who is, I guess, one of the newer members of your team, friend of the show here. And he always talks about how you guys think there's a better way to do fixed income.

Right. And I think this is something that a lot of advisors, I'm sure one of the reasons this has worked for you, because for years, advisors were asking for this. Right. They're saying we got fixed over here. It's giving us nothing. You've got stocks over here and there's a huge wedge. Like what's in the middle? And it was really hard for advisors to figure out what is that middle ground. And I think option strategies have kind of filled that void. But when you when you implement these strategies, right.

for advisors and for clients. What are you telling them in terms of allocation? Are you saying, hey, we're going to take a little bit of fixed income from this bucket, a little bit of equity from this bucket, and it's going to be the middle ground. Is that how you kind of play it? Or are there different ways to think about that? Depends on where their current portfolios sit. That's a huge thing. But like,

We view some of our strategies differently. Like we view, and this is like my view, it may not be the advisor's view. So you have to be, you have to kind of cater to that. But a lot of times, like our fixed income replacement in our mind is, hey, if you've got ag, if you've got any type of ag-like exposure, this is a replacement. It's a swap, one for one. But a lot of times, especially if you're dealing with a firm that allocates to liquid alts,

you're going to have like it's a little more nuanced and how you're going to view the allocation shift but ultimately what we say is if you take a 60 40 portfolio which the whole world is based on 60 40 portfolio if you said like hey can we make your business 75 25 and do that where drawdown is like something you're comfortable with we think your clients are happier long term your business grows faster because like this is one thing i think the asset management world gets wrong

Ben, if you generate a 10% compounded return, and Michael, you generate an 8% compounded return over five years, and we go to 99 out of 100 clients and say, do you want Ben's 10%? The answer is I want Ben's. Well, Michael, the way the asset management business works is you say, no, no, no, no, hold on, hold on, hold on.

My Sharpe ratio is higher than Ben's. And our argument is always like, that's almost an irrelevant measure to the end user. What matters more is like, give me the highest CAGR possible, highest compounded annual growth rate,

But I need to know the denominator is a drawdown that I'm not going to run for the hills for. And that's like, to me, it's like the light is shining on options-based strategies. So you think, I love that. That was really great. You think that your strategies would allow...

an advisor to be comfortable shifting an advisor, shifting a client from 60, 40 to 75, 25? 100%. That's what, that's what, so I probably shouldn't say 100% on this, but, but in my opinion is 100%. And we've got, so we're on our eighth year of GIFs numbers on our models. And so one of our greatest advantages is when you're talking about complexity of options-based strategies,

And an advisor says like, well, okay, we'll explain how we can just say, well, here's how we do it with our models. And the,

The secret ingredient of those models is because the world is this like Vanguard and BlackRock 60-40 world, you have to deliver something that's different where the message is powerful, results speak to that, but it can't be that different. And so that's kind of where our models are. It's kind of how we've built them. So let's talk about your ETF. So what was the first one that you guys launched?

And is that the biggest one or not necessarily? No, no. So we say Aptis is the house that D-Risk built. So we launched, we had a couple strategies. We ended up blending those strategies. And then we started, you know, we launched D-Risk in 18. And that was where, you know, we were more equity focused, hedged equity focused.

And then we launched de-risk. You know, if you're in the hedged equity space, there's, there's plenty of competitors. It's really hard to get people's eyes off of something they've already used. There's inertia in, you know, there's cap gains, all that crap. Well, in fixed income, it was like, well, there's really not many cap gains to worry about. Let's, let's just launch a better fixed income strategy. And that was de-risk. And that's kind of like what really, you know, we had some pretty lean years, let's call it, uh,

And then we launched DRISK and the world kind of changed for us. So let's talk about DRISK. What is it? The ticker is DRSK. What is this? Yeah, DRSK. It is what we would call a replacement for fixed income. Not everybody views it that way, but the track record will speak for itself just when you compare it to ag, which is kind of how we allocate thinking of, hey, what's our appropriate benchmark? But what it is, is to me, and keep in mind, I'm biased, so...

But to me, it's one of the best expressions of long volatility out there because you own 90 to 95%. There's three components. You own 90 to 95% in investment grade corporate bonds. So the duration is like if we really extend duration, we're going to be roughly half the act. So there's not a ton of like, what's my duration? Like all the stuff that I think is somewhat of a waste of time.

But it's that like 5% of the portfolio that is a combination of long calls, both index and individual names, and long puts. That is a how we pair those together gives like what we call is like it's a Trojan horse for more equity exposure in an allocation that's wrapped up in bond like volatility. And so if you look at the compounded returns,

You know, I will shy away from using exact numbers, but it's pretty, it's substantial outperformance with very similar risk. And that's kind of what doesn't take a lot when you show an advisor those numbers to get them to listen. So the big thing for the strategy is you're getting the income from selling those puts and those calls. No, no, no. We're long. It's a long fall strategy.

So we're long puts. We're long calls. Oh. Yes. Okay. So hoping for that upside piece to... I got you. Okay. Yeah. So think about like, if you look at the basket now, we're going to own... I can take 5% of my capital in the fund and I can allocate to, say, a handful of single names and index exposure. That 5% can give me 100% notional exposure pretty easily. So...

If I pair that, let's say all of these calls have six to nine months to expiration. So you have like, you know, you have time, you've got kind of inherent leverage that's baked into options, but you also have this thing called defined risk where if I put 50 basis points in a single name call option, worst case scenario, I lose 50 bps. So there's no short vol blow up. You pair that with puts, long puts. So like

Before I talk long puts, the question, Ben, it's like, okay, well, you've just given me 5% or 4.5% in long calls. Well, if the market sells off 30%, that sucker's going to zero, right? Well, two comments back. One would be, if the VIX goes to plus 80, or if you get an 80 reading on the VIX, you're going to lose less money than you actually think because vol is just so elevated.

But we pair these calls with puts that are much shorter to expiration, therefore have much more convexity, meaning they're like the gamma, a higher gamma. So like they can change, they can blow up in price much faster than your calls erode in value. So you're playing both sides of it. Oh yeah, we are. We're long vault. Like in the tails, we're going to be better in the tails. We're going to be fine within the tails. We're going to be better on a right tail, better in a left tail environment.

And I'm curious, when you're implementing these options strategies, because obviously the nature of the market and where the volatility is and where rates are, that can change the pricing of these options. How dynamic are you having to be? Is this all rules-based or do you actually have to make some active decisions on these things? Yeah, this is the separator of Aptis, in my opinion, from the options-based space. I think if you look at the assets devoted to options-based

The amount of path dependency is it's a completely I think it's it's not many allocators truly understand the path dependency they're absorbing in an option strategies where we're different is sure there's path dependency. There always is when you're owning options. But we are so active in how we manage the hedging component, the long call component that I think we I think that's what's required to like to deliver options based strategies effectively.

in path dependent wrappers. Like I think that's, there's a use case for that, but we just want to be as efficient and as effective as possible. So we're actively managing this stuff every single day. So let's say I'm an advisor and I look at D-Risk versus the ag and I'm thinking to myself, wait a minute, similar drawdowns, way better performance, but what's like the, uh-oh, like

If I'm trying to replace bonds and JD and his team are active and they do something stupid, like I don't want my bonds to be the reason why a client fires me because I had to get a little bit greedy. So is there any risk in that or how do advisors digest that and then explain to a client, hey, I'm giving you the ag, but like –

with options it's just what's what's the story i'm thankful for this fellas because y'all are asking great questions so going back to what i said earlier on kind of i think you know you asked hey if you could do it again what would you change so what we say is like if your if your strategy's worst case scenario is not digestible let's don't watch the strategy

And so our worst case scenario in a de-risk specifically is like I lose zero sleep on de-risk, like absolutely none. Because if the world, like what is the worst case scenario? The worst case scenario is if the market pins and doesn't move, vols go nowhere and we just bleed out option premium. And even if we do, we still have a 5% yield coming off the bond portfolio.

So it's like, okay, our worst case scenario is very, very manageable. The worst case scenario in client size would be a extremely welcome. Like right now, we're filming this March 4th. There's a little bit of all out there. Like it's, it's, this is what we love.

You know, this is a great thing for us because we are able to monetize things, move things around, restructure. So long-winded, but I think our worst case scenario is it's just not going to get us fired. I guess maybe how are advisors explaining de-risk to their clients? Like what's the story? We're going to take some of your bonds and we're going to put it – we're going to take 95 cents and put it into bonds. We're going to take 5 cents and put it in –

Yeah. Yeah. That sounds like a lot. Yeah, it is. It is a lot of the strategy level we spend, I would say, 85% of our time, like harping on repetitively your your conversations with clients should live at the asset allocation level. What are you doing at the allocation level to improve outcome?

Why does that matter? Because that's the majority of returns. And so like, I would say, I'm not, I'm not avoiding that question. If it comes up like, Hey, explain this. I would just say it very rarely comes up. If you, if you have a powerful allocation story and you have proven results, like there's just not that many, like,

Mr. and Miss Jones that are like explain the deltas that we're gonna hold like it just doesn't get there So we can move off the rest in a separate last question Are you seeing advisors like maybe dip their toe and then ultimately replace all of the AG or how are they incorporating this into their? Into their fixed income sleeve arts our entire business has been built this way. It's like I

We kind of sound a little bit like crazy, I guess. And it's like, hey, well, I'm going to do this with one client or, hey, I'm going to do this with like a small allocation. And then if eight months later performance is what it is, it's like, hey, we're just going to completely eliminate all ag in favor of de-risk. You know, it's a toe before you jump kind of thing. So let's talk about some of your equity strategies now. So your biggest strategy is the

collared investment opportunity. So it's ACIO. Now that's bigger than de-risk now, right? But that's a newer strategy. Fill us in on that one. Yeah. The market for that is just so big, like the addressable market for hedged equity. So de-risk is, going back to what I said, de-risk is a different thing. ACIO is what we would consider a better version of what already exists. Why is it a better version

So if you think about a typical collar strategy, and for the record, my team would probably hate and appreciate this, but I am an anti-short vol. I am a long vol advocate. You will not talk to anybody that's more... I just think the presence of long vol allows you to take way more risk, and that optionality just does wonders for investors. But ACO has a component of both. So most collared strategies, you're long,

your long S&P exposure or beta exposure, you shorten index, you buy a put, you short a call on the index, you buy a put on the index, right? So the short call is effectively your ceiling, the long put's effectively your floor. Well, if you're selling a call and buying a put on the same underlying, obviously those puts are going to be more expensive. So what that translates to is you've just created this equity basket

that has a ceiling that is tighter than the distance of the floor. Does that make sense? So if you're, let's just make numbers up. If you're, this is going to be roughly close. If you're plus five on the upside, well, to fund a costless collar with the premiums of selling a call 5% higher, you're going to have to buy a put that's caught 8% lower.

So if you tell any investor in the world, my opinion is like, hey, we own this thing. You could make five or lose eight. How does that sound? Terrible. It's like, I'm not into that. So ACIO, we're long an equity basket and we pick and choose. Remember, I'm anti-shortfall. We pick and choose what we sell, when we sell it, how much we sell it, when we close it. There's active nature there. But we're doing this on single names.

So we're not selling index vol. We're selling single name vol. And the benefit of that is what exactly? The benefit of that is we take those proceeds and we can tighten up our put. So more volatility means more income from those options. So we flip the, like we're going to be caught plus 10 minus five rather than plus five minus eight.

And if you keep that structure intact, you're going to naturally outperform other hedged equity strategies over time. What about the individual names? How are you selecting those? Yeah. So I could give you like the, this is how we make it complicated. But ultimately it is, we want to correlate with S&P. Because if you don't correlate with the S&P, you blow up your like,

You can't hedge the basket with an index hedge. All right. So you're not necessarily looking for alpha on the stock selection level, right? No. So then the pitch for the strategy is what? What's the clean pitch? Yeah. The clean pitch is if you compare it, like the easy pitch is if you compare it to like a 60-40, we're going to absolutely destroy a 60-40 if you look at the numbers. If you look at like people spend a ton of time with like blended allocations, liquid alts,

It's like, well, you could just own ACO. And it gives you way more up capture with actually less drawdown. And so the clean pitch is just look at the numbers and upside versus downside. The more complicated pitch is if you already own hedged equity,

like we have to talk through the improvements of the structure itself so most of your strategies you would say the biggest one of the biggest benefits of options is just the fact that you can reduce your drawdown risk and depending on what options you use that changes how much of the drawing you get but that's that's one of the biggest selling points i would assume that is the secondary selling point in my opinion it's so it's where everybody flocks is like well i like i like knowing my drawdowns contained but what we what like

It's not that there's drawdowns contained. It's the risk that I can absorb elsewhere where like if you if you are in and I know that I'm probably more convicted that I need to be here. But if you think if you think equities are going to outperform bonds for the next 10 years.

Well, isn't it beneficial if you could own more of those things? And so when I say, hey, you know, guys, let's don't be 60-40, let's be 75-25. What do you think the first pushback you get is? It's like, well, my clients can't handle that vault. And having the hedge in place allows that conversation to be made easier. But then when you have like a 2023 or 2024, and if you look at the allocation impact, it's like, OK, I can get behind this.

What do you think are some of the biggest misconceptions about option-based ETFs? Maybe it's not a misconception, but one of the things that drives me nuts is active options-based strategies that do one trade annually and charge 80 basis points a year for it. That would be one thing that I just don't think people fully... The marketing appeal of like

I can be whatever buffered numbers you want to put. That sounds really interesting, but if you actually look at what's happening, there's all types of path dependency. You're paying way too much for it. That would be kind of my one gripe in the options-based space, which there's been assets rolling in to those types of things. So it's really hard to do a quantitative rules-based strategy for one of these things, right? Where you can just set it and forget it.

It's not hard, it's really easy. You can just set it and forget it and walk away. The marketing appeal, like firms do a really good job of like

how easy this is to explain to a client because it's one like, well, that's okay, but it's just not that effective when it comes to actually producing higher CAGRs. Right. If you want to squeeze the most out of it, out of the income, out of the upside, downside, whatever it is, you have to actively manage these kinds of strategies. Yeah. And the other thing too, which is probably a better answer is, I'm not going to speak on specific strategies, but one of the most successful strategies ever is

to me, is the best, it's active-based option strategy kind of birthed out of 2022. But it was like, it's the best definition of performance chasing that you will ever see

And it's like, it's one of the short ball strategies where it's like, Hey, look at all this income you're producing off of option premium. I always like, like we have so many conversations where it's like, Hey, we sold option premium for a hundred thousand bucks. It's like, well, that's going to be really painful when you buy it back for a million. Like that's, that's what a lot of people just don't, they see that initial option premium that they sold. They don't realize that like

What does it look like when we keep getting our face ripped off from a rising risk asset market? Right. I like that because one of the things that Michael and I have always talked about over the years when thinking through any kind of alternative strategy is that it has to be able to survive a bull market, right? If you're just focusing on downside volatility or income or whatever it is,

That's great, but that stuff doesn't happen nearly as much three out of every four years the market goes up You have to figure out how to survive those kind of periods So that's that's what you're more focused on is how do we get more of the? Ceiling with all with also some protection you have to you have to compound capital if you do not compound capital Your your shelf life is is much much shorter. So what's the what's the trade-off here? like what should what should advisors and end-users be thinking about because I

You know better than most, there are no free lunches. And so if you're telling me that I can have something that gives me ag-like downside capture, but with significantly higher returns, doesn't that sound like a free lunch? What am I missing? It's not a free lunch. You're still taking... That excess return is just coming from beta. That's one question I get a lot is,

well, how do these models produce alpha? And it's like, well, it's really just more beta. That's the answer. So I think the bigger question to that comment is, what is the discrepancy between risk assets and conservative assets going to be over the next 10 plus years? And if you're in the camp that there's not going to be one, then we don't really appeal. If you're in the camp that, hey, there's going to be a significant difference, then we're

Like we're pretty dang appealing at that point. So the trade-off is like, yes, you're absorbing short-term vol, like more uptick in like the daily vol of a portfolio. But what you're getting back is like the ability to compound at higher rates over a longer period of time and do it really tax efficiently. That's the other thing. I know y'all mentioned Brian. He harps on, hey, we get 5% yields. Well, if inflation's 3% and your tax rate's 40%,

What are you really getting? 5%. We don't need to get into CPA stuff here, but tell us what the difference is between owning option type of strategies and an ETF wrapper from a tax perspective. Yeah, I would point to RETFs, just their cap gains distributions. That would be for a more technical answer. Let's review that after the show. But

I think just the benefit of S&P 500, this is what got me into the ETF space, is reviewing all ETF portfolios for ultra high net worth families. It's like, okay, where are these cap gains distributions? If you can compound your pre-tax and post-tax compounding returns,

In a perfect world, they're going to be very, very close. And the ETF wrapper itself allows you to access an inherently tax inefficient option based strategies, much more like you can close that gap. And that's been the high level answer of like, hey, if I can compound at 10% pre-tax, hopefully my post-tax isn't 6%. That's where we want to reduce the tax drag.

So, JD, you said one of the advantages that you all have is you're really in there in the trenches with advisors. You're not just whiteboarding and thinking about the best strategy. You're thinking about what's the best strategy I can deliver to people that people are going to actually buy. And I think you guys have obviously done an incredible job with that. So for advisors that are just discovering Aptis and want to learn more about how you work with them, where you fit into their portfolio, where can we send them? Yeah, the easiest place would be the website. We've got – they can sign up for content.

Um, they can hit us. We, we produce, I've got, I would say like the best thing that we've done is like, we've attracted really good people and we have content machines. And so, um,

You know, we work with a lot of advisors just providing content where, you know, that's the only thing we do. Great. We'd love to do more for you. But the website, the blog, the content hub, if you come there, I think you'll find some useful. What's the website, JD? Hit us with it. AptusCapitalAdvisors.com. Appreciate it. Thanks, JD. Okay. Thanks, JD. Remember AptusCapitalAdvisors.com to learn more. Email us, annalspiritsathecompoundnews.com.