Welcome to episode 8 of Behind the Ticker. In this episode, our special guest is Mike Venuto, the portfolio manager of $BLOK and co-founder and CIO at Tidal. $BLOK holds the distinction of being the first-ever blockchain ETF to hit the market. Join us as we delve into the evolving landscape of ETFs, exploring the rise of active ETFs, the conversion of mutual funds to ETFs, and the transformative impact of blockchain on the industry. With Mike's extensive experience in bringing ETFs to market and facilitating their growth, we gain valuable insights into common mistakes and pitfalls that early issuers often encounter. Our discussion covers crucial topics such as product-market fit, market timing, and how to navigate these challenges successfully. To explore Tidal's comprehensive range of ETFs and services, please visit their website at https://www.tidalfinancialgroup.com/
Deeper Dive: Insights from the Full Conversation
Beyond the headline strategy, the full conversation between Brad and Michael Venuto covered several additional themes worth highlighting for advisors and investors.
On Process and Philosophy
We're souped and not doing 90% of everything. We have this great slide where it shows how complicated the industry is and then we show a picture of the client and the investor and we connect them and put it all the bit. So those are clients like so-fi. We have 80 ETFs with them. Shorea funds which is our indie hit. This is a group in Canada that's got three ETFs in over 500 million across them. Nobody's ever heard of them.
So, look, it's very, very simple that it's just a better rapper, right? Wice coffee's on my team calls it structure matters. The ETF structure is just in terms of comparing it to LPs, SMAs, mutual funds. It's a better rapper, right? You've got more tax efficiency. And there's very little guarantees in the world of finance, but for a taxable investor, I can guarantee the exact same strategy in an ETF versus an SMA or mutual fund. It's got to be better in an ETF.
Market Context and Positioning
What we learn, talking to management is more about the supply chain and the other companies than we do about those companies themselves. We have exposure to crypto itself. So we own some of the Canadian spot Bitcoin ETFs in block and we have not only do we own micro strategies, we also own his bonds. That's another thing block can do that. No one else has done we own bonds. So you know, we bought micro strategy bonds the last time crypto collapsed and it was just like, okay, this is better in the cap structure.
I'm Brad Roth, Chief Investment Officer of Thor Financial Technologies, and portfolio manager of THLV, the Thor Low Volatility ETF. Behind the Ticker, uncovers the inner workings of the ETF industry. We will interview portfolio managers and ETF service providers to dive deep into their work lives and their businesses. We will learn the inner workings of their strategies and what drives them as they continue to grow their company. Many of these individuals are entrepreneurs, and will have unique and compelling insights to share as much goes on behind the Ticker.
I mean, we started this business, our current businesses, we were going to run private funds and I went to SMA research and now all of a sudden we're in the ETF business. So I mean, I didn't think we'd get there, but it's just the path that you take. So before we talk about title, because I have a lot of questions about title. Personally, I always like to ask, what do you like to do when you're not working?
Notable Insights
"So like, that's why they don't mind being second or third to market on things."
"So if you get product right, the next thing is the biggest mistake I see with entrepreneurs in this is they get lost talking to each other and to their buddies and to the market makers and to this net."
Key Takeaways
- $BLOK holds the distinction of being the first-ever blockchain ETF to hit the market.
- The conversation explores important themes in fixed income relevant to today's advisor landscape.
- The conversation explores important themes in crypto & digital assets relevant to today's advisor landscape.
What This Means for Advisors
For financial advisors evaluating options for client portfolios, this conversation with Michael Venuto highlights important considerations around crypto & digital assets. Understanding the strategy behind each fund—not just the ticker—helps advisors make more informed allocation decisions and better communicate the rationale to clients.
The themes of crypto & digital assets and fixed income discussed in this episode are particularly relevant in the current market environment, where advisors are increasingly looking for differentiated solutions that go beyond traditional benchmarks.
Listen to the Full Episode
This article is based on an episode of Behind the Ticker, hosted by Brad Roth, Founder and CIO of THOR Financial Technologies. For the full conversation with Michael Venuto, including additional nuances and details, listen on Spotify, Apple Podcasts, or watch on YouTube.