>> EVERYONE WELCOME BACK TO
JENNA MOVE PERCENT FOR THE NEW
YORK
STOCK EXCHANGE.
>> CALLED PROTESTS ARE STIRRING
UP DEBATE ABOUT INDEX
ALLOCATIONS TO CHINA WHICH IS
STILL CLASSIFIED AS AN EMERGING
MARKET, ALTHOUGH CHANGES COULD
BE COMING SOON WITH
IT'S NOW TO DISCUSS IS PARKED
ALL HE'S THE FOUNDER AT LIFE
AND LIBERTY INDEX IS THE LIFE
AND LIBERTY FREEDOM
100 EMERGING MARKETS INDEX IS A
FREEDOM WAITED EMERGING MARKET
EQUITY STRATEGY, USE HUMAN AND
ECONOMIC FREEDOM METRICS TO
TALK ABOUT YOUR INVESTMENT
SELECTION PROCESS. I GUESS FOR
YOU RIGHT NOW MUST BE A REALLY
BUSY TIME TO KEEP TRACK OF ALL
THE CHANGES.
>> YES, SO WE SEE A LOT OF
INTEREST IN DIVESTING FROM
CHINA AND A LOT OF THESE
EMERGING MARKET FUNDS THAT MARK
A COUPLE OF FISH AND WAITED
A 30 TO 35% DIRECT EXPOSURE TO
CHINA. SO YOU SEE SOME INTEREST
IN DIVESTING FROM THOSE TYPES
OF ALLOCATIONS OF INTO
SOMETHING MORE LIKE A
WE DO AND WHAT WE DO IS
BASICALLY A FREEDOM WAY TO
APPROACH SO WE DON'T
ARBITRARILY
EXCLUDES CHINA. WE JUST HAVE NO
CHINA IN THE ALLOCATION RIGHT
NOW BECAUSE IT'S FREEDOM WAITED
IN THE HIGHER FREEDOM COUNTRIES
GET A HIGHER WEIGHT, THE LOWER
FEE AND COUNTRIES GET A LOWER
WEIGHT AND THE WORST OFFENDERS
AS FAR AS HUMAN RIGHTS AND
ECONOMIC FREEDOMS ARE EXCLUDED
FROM THE INDEX A CAR WE HAVE NO
CHINA RUSSIA, EGYPT OR
SAUDI ARABIA.
>> ARE YOU MONITORING RIGHT NOW
ARE OBSERVING ANY OUTFLOWS FROM
THESE CHINESE ATF SORRENTI
CHINA RELATED OR WEIGHTED INDEX
FUNDS
RIGHT NOW.
>> YEAH, I DON'T MUCH OF HOW
CLOSE THAT I CAN GET THAT
INFORMATION FOR YOU, BUT WHAT
WE HAVE SEEN IS A LOT OF.
INVESTMENT OFFICES WHERE
THERE'S FAMILY OFFICES OR HEDGE
FUNDS OR INSTITUTIONS, LOOKING
AT HAVING THIS CONVERSATION
SHOULD WE BE DIVESTING
FROM THIS DO OUR CLIENTS REALLY
KNOW THAT THEY HAVE 30 TO 35%
IN CHINA OUT OF THE BROAD
EMERGING MARKET INDEX FUNDS AND
IS THAT SOMETHING THAT
THEY WERE WOULD APPROVE OF FOR
WANT TO HAVE IF THEY KNEW THAT
THOUGH THE IT'S HOW IT'S PUT
THE D THIS YEAR YOU
CONVERSATION THAT'S GOING ON
RIGHT NOW THAT.
>> WHAT IS THE CONVERSATION
SOUND LIKE I MEAN WE'VE HAD
THIS DEBATE NOW THIS THIS YEAR
THE DIFFICULTY OF OF COMPANIES
MAY BE CHOOSING PROFIT OVER
MORALITY RIGHT, ESPECIALLY WHEN
IT
COMES TO THE ISSUE OF HONG KONG
AND YOU KNOW FOLKS IN THE NBA
FOR EXAMPLE SPEAKING OUT ON THE
INVESTMENT SIDE OF THINGS IT AS
AS BLACK AND WHITE AS THAT.
IT'S A DIFFICULT
CONVERSATION BECAUSE.
>> CHINA IS
A PARTISAN AND GLOBAL MARKETS
AND YOU DO WANT TO YOU KNOW
KEEP THAT
TRADE GOING. WE DON'T
PENALIZE FREER MARKETS THAT
TRADE WITH CHINA FOR DOING THAT
FREE TRADE.
SO WE HAVE A LOT OF MARKETS IN
THE INDEX LIKE CHILE TAIWAN
SOUTH KOREA THAT DO TRADE A LOT
WITH CHINA AND INVEST IN CHINA
SOUTH AFRICA
AS WELL. WE CAN'T GET AWAY FROM
THAT INDIRECT TIME EXPOSURES
AND THAT WILL
ALWAYS BE WE JUST DON'T HAVE
THAT DIRECT TIME EXPOSURE AND
SO ARE MERGING INDEX IS OVERLY
EXPOSED TO CHINA RIGHT NOW.
>> I WOULD SAY EMERGING MARKET
INDEXES ARE MARKET
CAPITALIZATION WAY ARE PRETTY A
CONCENTRATED IN CHINA BECAUSE
THEY HAVE BETWEEN IF YOU LOOK
AT
FBI.
>> AND PUT THE THERE IS BETWEEN
30 TO 35% IN CHINA CURRENTLY IN
THE SEA ICE IN THE PROCESS OF
QUADRUPLING
SHARES A LOCATION IN THEIR
EMERGING MARKETS INDEX BUT HE
ALREADY HAS A SHARES THAT ARE
ACTUALLY MORE. SHARES THE FBI
RIGHT NOW
SO THAT THE LAW IN ONE COUNTRY
THAT'S DIRECT EXPOSURE AND IN
ADDITION HAVE ALL THE INDIRECT
EXPOSURE AS WELL SO. I WOULD
SAY YEAH A LOT OF PEOPLE AREN'T
AWARE OF THAT OVER
CONCENTRATION OF ONE.
>> THERE'S A LOT OF TALK ABOUT
FAIRNESS HERE IN THE US,
ESPECIALLY WHEN IT COMES TO THE
PRESIDENT AND AND WHERE HE SEES
CHINA MOBILE MARKET IN A
LOT OF THINGS THAT HE BELIEVES
THAT CHINA IS DOING IS UNFAIR
IS IT STILL FAIR TO CALL CHINA
AND EMERGING MARKET.
>> THERE ARE CALLS THAT I
THEY'RE DECIDING WHAT IS
EMERGING MARKET WAS NOT AND A
LOT OF IT COMES TO GDP
BREAK OUT HOW MUCH ENERGY TO
BECAUSE WITH SERVICES SO I
GUESS IS STILL HAVING
TO US. OH YES, FOOT CNN THAT
THE EVENT THAT BOTH AGREE THAT
CHINA IS AN EMERGING MARKETS IN
THE INDEX A CONSTITUENT SO.
>> THEY DO KIND OF SET THE THE
STANDARD ON THAT.
WELL THERE SHOULD BE AN
EMERGING ART MARKET, I DON'T
KNOW.
>> YEAH, I MEAN WHEN YOU'RE THE
NUMBER 2 ECONOMY BY GDP
INTERESTING
STILL BE CLASSIFIED IS THAT I
THINK IT'S A VERY FAIR.
>> I DON'T THINK IT'S ALL JUST
THE SIZE I THINK IT'S ALSO LIKE
THEIR CAPITAL CONTROLS THE
INSTITUTIONS THAT SOME
OF THOSE.
>> THEY'LL MEET UNTRUE. YEAH
AND I THINK THE FOUNDATION I
WERE I THINK THE US
IS LIKE 75% SERVICE IS DRIVEN
ECONOMY AND SO WHATEVER TIER
ONE.
>> BUT I THINK THAT THE FACT
THAT YOU HAVE
AN ENTIRE. YOU KNOW INDEX AND
WHEN YOU LOOK AT YOUR SELECTION
PROCESS BASED ON THIS HUMAN
FACTOR IS IS
AS PRETTY.
>> NOVEL AND AND NOTABLE AMONG
OTHER INVESTORS, YOU IN THE ESD
ABC'S
BEEN AROUND FOR A LITTLE WHILE,
BUT HOW DO YOU ALSO BECOME A
JET OBJECTIVE TO TO THE HUMAN
YOU KNOW BECAUSE THAT EVERYBODY
HAS A DIFFERENT VIEW OF
WHAT IS. I'M IN THE NOT SO
FREEDOMS SO MUCH WITH BUT THERE
COULD BE NO ONE SAYS ESPECIALLY
AND YESTERDAY, THERE'S A LOT OF
NUANCES AND EVERYONE HAS A
DIFFERENT VIEW THAT'S FAR AS
FREEDOM METRICS.
>> WE USE ONLY QUANTITATIVE
METRICS AND OUR METRICS COME
FROM THINK TANK, SO WE PARTNER
WITH 3RD PARTY
THINK TANK, THEY WORK WITH THE
CATO INSTITUTE, THE FRASER
INSTITUTE AND THE FREE CHECKING
ON THAT FOUNDATION FOR FREEDOM
THEY HAVE A JOINT PROJECT
CALLED THE HUMAN FREEDOM INDEX
DATA SET WHICH IS A COMBINATION
OF 79 OF AREA POLLS, A HUMAN
AND ECONOMIC FREEDOMS.
THEN COMES IN THE RIGHT TO LIFE
LIBERTY AND PROPERTY WAS THAT
WILL CONTINUE TO EVEN SO.
>> SOME FREEDOM AS A US OF
SELECTION CRITERIA, THE
FIRST PLACE.
>> YES SO I GREW UP IN BOTH
CHINA AND THE US AND I SAW THE
DIFFERENCE OF FREEDOM MADE IN
MY LIFE AS WELL AS IN THE
MARKETS OF THESE COUNTRIES.
AND THEN I WORKED AT FIDELITY
FOR 10 YEARS THE FINANCIAL
ADVISOR AND I HAD A LOT OF
CLIENTS IN CALIFORNIA TEXAS
THAT WERE
NONNATIVE THAT WERE FROM RUSSIA
FROM CHINA AND THAT THEY DIDN'T
WANT TO INVEST IN THOSE
COUNTRIES FOR THIS
REASON SO I WANTED TO CREATE
SOMETHING WHERE I CAN INVEST IN
EMERGING MARKETS WITHOUT THIS
OVEREXPOSURE TO
CHINA AND SOME OF THESE OTHER
VERY UNFREE AND HAVE THAT