Why do you see a trade in small caps and mid caps as sustainable? Why would this ETF be attractive now?
Dani
David Royal
It's not just valuation. Small caps are behaving in a more rate-sensitive fashion than in the past. With probably two more Fed rate cuts this year, that could benefit small caps.
Why do you like the ETF? Is it just easier access or more tax-efficient?
Matt
David Royal
It's certainly more tax-efficient. For a managed account portfolio, the ETF has tax advantage and intraday liquidity.
How important is it that we get those rate cuts for the small cap trade? JP Morgan suggests no cuts this year, next move a hike in 2027.
Dani
David Royal
Small caps would struggle if we don't get a couple rate cuts. They probably do need a couple rate cuts to rally, but I think we're gonna get them.
Shark Ninja - you bring interesting names. An analyst friend says they spend more than twice as much on R&D as competitors.
Matt
David Royal
The theme is the upper-end consumer is doing better than lower-end. We want brands that compete on product innovation, not macro tailwinds.