The etf industry, big numbers are par for the course. Our analyst Eric Balchunas is used to big numbers. Eric this is no exception. This is the end of the year, the last show, so normally go over weekly. You today numbers are big. 324 billion. That is the second biggest year of etf flows ever. 7 organic growth. Lets look at the top leaderboard of the year. Bti broad market. 31 , that is the best return for the s p since 1997, even though it did not feel like that. Usmv was a shocker. Interesting for smart data. By one basisee point, enough to win this internal the battle. That is the hangover from 2018 and rates falling. Take a look at the Asset Classes. January to october, equities not that big. 40 of their flows in the past two months. Fixed income, look at that drop off. Gold as well. Look at their growth this year. A little below average but 18 look at their growth this year. Fixed, way above last year. Lets look at the leaderboard in terms of the issuers who won and lost. For the sixth year, blackrock will have taken in more flows and anyone else. Vanguard was flirting. Dont sleep on jpmorgan and goldman moving forward. The wall street banks are good at taking in money. Interesting year. End of the year might be of 20 2017 with everyone feeling bullish. Scarlet everyone is breathing a sigh of relief it is not like the end of 2018. Savant. Not our only etf james, let me start with you. Eric shared his tale of two years, mentioned fixed income. It was a record year for fixed income. This is the biggest year fixed income etfs have ever seen. Goldman moving forward. Muni etfs have taken a Record Number at 10 billion. This is more a story about investors and institutions getting more comfortable with fixed income etfs. Eric you did a summary of the decade. Talk about the winners and losers performance wide of the decade. Decades,look at the its been all progrowth, proamerica. Semiconductors, medical devices, defensive names. If you look at the decade before, it was all energy, any country that was tied to energy. Mexico, canada, australia. Scarlet very commodity driven in the previous decade. Springs to mind what will come up in 2020 and the decade to follow. One thing you can look at is smart data. The inflows have reached 1 trillion. Eric record year for smart data, just as we have these active springs to mind what will come up nontransparents open to come in. Talk about this interesting turf for. I think smart beta fills a lot of that void. Smv. Mentioned u that is a quarter of all t etf assets. They are competing with smart data. Over time, look at smart beta costs have come down. They are competing on these cheap smart Data Products when they start coming in. You cannot really sleep on these products. There are Asset Managers with trillions of dollars betting big on these things. If they convert some of the mutual funds that are seeing at flows, in a way to stem these outflows into and products, you can get outflows quit. Scarlet that could be a change for the investing world. One thing we need to talk about is bsg. It feels like it went mainstream this year. Eric i hate to be the bad guy. Bsg definitely doubled their assets this year but is still only 24 . We also did a study. Esg assets do not include amazon, berkshire hathaway. I think a lot of education is needed. James, give me the bullish case. A billionve taken dollars this year, not huge in the grand scale of etfs, but this is similar to the way i look at smart beta etfs. The things that a lot of beta are getting a lot of assets. The number ones are excluding a couple of assets, securities. Some of the companies that eric mentioned, there are some real governance issues with them. It makes sense if you are going tsg that they would be excluded. Esg is a lotourse, more developed in europe. They seem to be warmer. Maybe 5 in europe versus 1 year. A lot of it is regulatory. Benchmarks will have to disclose their holdings. Also here in the u. S. , the products that took in a lot of money, that was a European Pension fund. They are being driven toward that. That is why it has taken off more in europe. Scarlet there have been some big numbers related with calls and etf flows. A big number has out there and you put it out to twitter to see if everyone would agree. Eric i was shocked that many people agree with her. 50 trillion is what they will have in 10 years. What do you think . I would take the under on that. Over the last 10 years, a lot of that was the market. The market may not have that bull run that we have had, but i would take the under. If i had to say a number, i would say 25. Pretty bullish on international markets. Scarlet lightning round, what is one etf you are watching in 2020 and why . In jpmorgan moves a little bit of that into vbus, that could be a multibilliondollar etf. Innovator funds were the first wants to come up with them. They buffer you against certain losses. It could be a way to compete with structured products. G i am going with goldmans lc. They bought united capital, so they have a lot more distribution going into next year. Scarlet thanks to everyone involved. Coming up, you will hear from some of the biggest names in the etf industry. Giving their take on the year ahead. One funds that caught our attention this week has to do with spine. Investors are cautioned to the wind, betting the s p record run is not stopping anytime soon. Short interests on spy was the smallest since october 2018. You can find out and our other charts on the bloomberg at gtv. This is etf iq. Scarlet im scarlet fu. This is etf iq. The three main stages of an etf. Negative one time short vix futures etf. It will be similar to the infamous xiv. Has some minor differences, starting with the fact that it is an etf, not an etn. The actively managed fund invests tactically using a risk Party Approach to target a combination of tips, treasuries, global equities, and commodities. The folks behind this fund, alums of bridgewater. For some, the final stages liquidation. Andas passively managed invested in Cloud Infrastructure stocks. Investors never quite bought it. Lets get passive aggressive and track that tension between active and passive investing. I sat down with each use of blackrock, state smart to look ahead to 2020. Here is part of my discussion with armando senra, rich powers, and noel archard. We began with a shift to passive. Its been a good run. Actually wish for this because it would be a horrible thing, but it would take a significant Market Correction for some of that money to shift. You are talking maybe 90 bps for portfolio holdings. We have a lot of conversations with clients who are biding their time because they can see how they can use some of these beta products as an active construct, strategy they are deploying. They have to be sensitive to come in the retail space, tax ramifications. We know it was a great adoption for dts, the global crisis. Investors recognized that woman they were paying for was done being delivered. Switching to a lower cost product were you knew when you are going to get from a performance standpoint, good or bad, led investors to consider etfs. We know the market will sprint down at some point. It could catalyze the next wave of etf adoption. Think we are moving from a time when were talking about passive, when the reality is you see growth factors, the maddox, many instances where etfs are instruments of active returns. Investors, the more they understand that, the more they are thinking about indexes in terms of cap waited but moving into factors, looking for alpha and index world. To continue on that theme, you mentioned the crisis. Part of been such a big the growth of etfs, not just that point in time. You think about how many firms took a step back. How do we want to run our book and business . If you think about the Wealth Management business, do we want brokers doing their own investing, or do we want to push high . Down from on Asset Allocation is critical, we have a bunch of smart people who can create those Asset Allocation models. Use these for your clients and make sure you are taking care of ,he estate landing, tax issues things that add another layer of return for the client, and the eds were a really good vehicle to execute upon those very active allocation plans with a diversified lowcost vehicle. That was part of that. Scarlet these passive products in an active mindset to apply these products. Talk about the zero feed trading platforms. In any discussion of cost, this has to come up. The list of places where you can trade stock for free is getting longer. For you guys at blackrock, isnt this bad news when you have an exclusive deal with fidelity to sell for free . That edge is basically gone now. This is possible for etfs. This will expand the use of etfs. The more we can remove the friction a client has in utilizing etfs to gain exposures, this is positive for the industry. I dont see this as negative to us or the industry. This is a positive. The biggest beneficiary are the clients. Clients will continue to use etfs to build portfolios. I think it accelerates greater etf use from a greater client type. Advisors are in etfs today. You look at et has relative to funds, increasingly, the etf will look like a better option. The friction around commissions will not exist for etfs. Funds, increasingly, the etf will look like a better option. The individual investor who doesnt have an advisor uses etfs in a small way today. They can now consider it at zero feet commissions. Whereas High Commission may be placed on their mutual fund. This is only more fuel to the fire in terms of adoption. Someet talk about how complain how the etf they launched, some good ideas, the maddox ones, they do a great job of it, but they dont have the distribution, awareness that you guys do. As a result, it is something you look at, you copy it, and you put it out there with a lower cost and it does better. Are you ripping them off . [laughter] i think you did it to us. [laughter] not worried about the littles. Anyway. [laughter] i dont know if i completely agree with that. This business is constantly looking at what the competition is doing. You might see something where there are couple of funds taking in some decent flows over the last year that have been in different roads. That is great, but if it does not tell the way you distribute, or your brand, you are not necessarily saying, i will just drop this product in and grab some assets. It probably does not fit with your range, your way of interacting with clients. Is we have clients come to us and say, there is this thing that is interesting. I think about it differently. Is there a variation of the theme that you would be willing to launch . Part of the market included in this part not. I think you see variations, and that happens. Scarlet that was nole, armando senra, and rich powers. I think you see variations, and that happens. This is bloomberg. This is bloomberg. Scarlet im scarlet fu. This is etf iq. How about when you combine the two and end up with a factor to boot . Is the ceo of up Fintech Management and he is tracking the biggest u. S. And chinese internet names. Talk to him, Eric Balchunas will give us a drill down into his etf. It is very simple to understand. Biggest 10 Internet Companies in the u. S. And china combine. 10 million, fairly new. 59 basis points, which is cheaper than kweb. Andeally combines faang bat. Everybody knows these names. This is where a lot of the action and the internet growth is. Lets take a look at two peers. The main thing you want to look at is how concentrated this is. Also, you are going to see 50 china exposure. It is one of these ones were performance means a lot, but unique exposure with only two countries. Is yang still with us xu with up Fintech Management. Talk about putting together chinese and u. S. Internet names in this fund. In physics, it is always about time, space, and math. Thisthe internet connects everything. When i look at the global landscape, two countries that i want to invest in in the next 20 years, the u. S. And china, the biggest economies in the globe. In china, they had the 10 biggest companies. We have to understand that and our customers. We have to understand our customers. Scarlet is this designed for american or chinese investors . Initially it was started for chinese investors. Our customers are working professionals whose firms went public in the u. S. In the last 5, 10 years, and everybody was to invest in u. S. Equity stocks. But it is complex. 2000 etfs in the u. S. , 2000 stocks, how do we find out where to invest . That is where we created the chinau. S. Internet titan etf. Eric your company is not just an etf, you are trying to be the Interactive Broker of china. We started as a brokerage business but turning to international investing. Given all the commission wars, we need to have a fee basis. That is how we promote our etf among our customers. They can buy our etf Commission Free through our mobile app. Scarlet our local investors in china moving into etf subway that they have in the u. S. . The growth has been ok but not a runaway. Scarlet we have seen regulatd institute ares pushing that way in china. They want transparency. The only thing they dont have in china is capital gains. Want lowpeople still cost, transparent, efficient products. This year in china, there are about 250 etfs. Last year, only 180. So we see a growth of the term of etfs listed in china. Scarlet yang xu, thank you for being here today. The etf industry has you covered with something for everything. Here is one that Clark Griswold would love. It is time to close out the year in style, with some fun in the version, wining and dining. Tracks 30 Companies Involved in the leisure and entertainment industries. The consumer facing names are chosen according to specific criteria, including price momentum, earnings momentum, quality, management action, and value. You have gaming in Media Companies in the hotels, cruise operators, and airlines. Names such as fox, mgm resorts, and elton, and even manchester united. Uses a multi factor Selection Process people waited within tiers. Assets, million in since launching in 2005, it has returned almost 240 . Even so, that trails the s p 500 by 20 percentage points. Pej gets a green light in the bloomberg traffic Intelligence System with a morning on its weighted system. I could see Clark Griswold getting all over that kind of fund. Eric back in the day, somebody called this the clock griswold etf. You are not alone. Scarlet that does it for bloomberg etf iq. Happy holidays, everyone. From new york, this is bloomberg. Mark im Mark Crumpton with bloomberg first word news. President trump will hold its first rally of 2020 ohio next month potentially coinciding with the beginnings of his Senate Impeachment trial. The Trump Campaign says he will speak at the keep America Great rally in toledo january night. The Senate Impeachment trial is expected to start that week, but may be delayed as lawmakers argue over whether to call new witnesses. Ohio int trump won 2016. Syrian Government Forces are pushing ahead today with a military assault on the last rebel stronghold. The offensive began last week and is triggering a mass accidents of civilians near the turkish border. The goal of bashar alassads forces appears to be reopening a key strategic highway which links the masses with a Northern City of aleppo. It has been closed since 2012. Indias Main Opposition Party today staged protests to the new citizenship law. Critics say the legislation is discriminatory toward muslims. It provides a pathway for christians, hindus, and other religious minorities in india illegally to become citizens, if they can show they were persecuted because of their religion in muslim majority neighboring countries. But the does not apply to muslims. The u. S. Has allocated 175 million in military aid to the baltic countries estonia, latvia, and lithuania. The three countries are nato members and all border russia. Estonian Officials Say along with 25 million in general eight, washington has for the first time in earmarked a separate 750 million budget line. That will go to boost air capabilities of the three x soviet republics. Global news 24 hours a day, onair, and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in over 120 countries. Im Mark Crumpton. This is bloomberg. Shery live from bloomberg World Headquarters in new york, im shery ahn. Live in toronto, im Jon Erlichman in for amanda lang. By our bloomberg and Bnn Bloomberg audiences. Shery new leadership at boeing. Ceo Dennis Muilenburg is out. The board has named David Calhoun as president and ceo effective january 13. It is the stuff of hollywood in treat. Credit suisse is drawn deeper into spying scandals, placing the blame on the shoulders of its former coo. The daily Fantasy SportsCompany Draft cames it is merging with a specialpurpose acquisition company, allowing it to become public while forgoing the typical ipo process. Shery jon [no audio] jon shery jon we have seen res once again for the s p 500 and nasdaq. Toronto. Ing out in the eight gained in nine sessions. Optimism surrounding china, cutting tariffs on a wide range of goods. Some optimistic fund flow information, the bank of america reading of where equity fund flows are going suggest that over the last week we have seen the highest level in three months time. Another chart that hi