Wes Gray: An Inside Look at ETF Construction and Launches

Published on
February 22nd, 2021
Duration
65 minutes

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5

Wes Gray: An Inside Look at ETF Construction and Launches

Tony Greer Interviews ·
Featuring Wes Gray and Tony Greer

Published on: February 22nd, 2021 • Duration: 65 minutes

Tony Greer, founder of TG Macro, is joined by Wes Gray, CEO of Alpha Architect, a research-intensive asset management firm with a focus on high-conviction value and momentum factor exposures. They break down the asset management business and his approach to evidence-based investing and systemic decision making. Gray served as an active-duty marine in Iraq and opens up about how his military background influences his investment strategies. Filmed on February 16, 2021.

Key Learnings: Alpha Architect has opened up their platform to build ETFs and uses their infrastructure capacity, scope, and scale to help others launch ETFs into the market. He characterizes themselves as the “Shopify of ETFs.”

Comments

Transcript

  • MH
    Muddshir H.
    24 February 2021 @ 06:56
    0 0
    Fantastic interview “RVrockstar”
  • ET
    Eduard T.
    24 February 2021 @ 02:32
    0 0
    Tony Greer's look reminds me of Tony Stark. Great interview, thanks
  • MC
    Mark C.
    23 February 2021 @ 07:05
    0 0
    This was a great interview. Loved it. Thanks guys.
  • WH
    Will H.
    23 February 2021 @ 05:02
    2 0
    That guitar riff makes me want to inhale whiskey with Daniel Plainview
  • RM
    Robert M.
    23 February 2021 @ 04:43
    0 0
    To start, great interview. Very much enjoyed. Loved hearing about his process. Curious on the fund's performance. In just a quick review on Morningstar, looks like funds generally underperform indexes. QMOM, the US mid-cap momentum fund, pretty much tracks the SP500 index until June 15 of 2020 when it took off and greatly outperformed (which says a lot about market action since this summer). Same fund tracked the Vanguard Mid-Cap 400 until the trough of 2020 and then greatly outperforms over 2020. The value fund consistently underperforms the Vanguard Mid-Cap 400 value fund. If you compare all the AA funds to the SP500 and Russell 2000 (understanding his funds are mid-cap), all under perform SP500, up a little over Russell 2000, and only the US momentum fund outperforms with all that performance coming over the last 7 months. So my takeaway, maybe the Buffett "after I die" model works best with 90% SPY and 10% cash. Still don't have to think about your trades, you keep it simple, save on fees, and earn the same returns outside of momentum in the last 7 months.
  • AL
    Aaron L.
    22 February 2021 @ 21:01
    1 0
    That info on the 1031 exchange into an ETF was the most useful take away for me. I thought that was just a real estate thing.
    • AL
      Aaron L.
      23 February 2021 @ 03:02
      0 0
      If anyone has any info on how ETF uses 1031s, could they please send me some links.
  • KA
    Kyle A.
    23 February 2021 @ 02:12
    0 0
    You want dirtball, max hate stocks? Look in shipping markets and maritime economies ;)
  • TT
    Tokyo T.
    22 February 2021 @ 10:05
    9 0
    Tony is terrific as an interviewer. Well done.
    • TG
      Tony G. | Contributor
      22 February 2021 @ 19:44
      5 0
      many thanks, trying my best. Difficult skill to learn.
    • MH
      Michael H.
      22 February 2021 @ 21:08
      1 0
      indeed. just as an observer it seems like the trick is to check your ego at the door and don't say too much, while saying just enough to lead the direction. good stuff.
  • IC
    Ibrahim C.
    22 February 2021 @ 10:07
    5 0
    Thank you Tony! Another great interview to suggest everyone to trade correctly; Wes says "... essentially we wanna eliminate my monkey brain from screwing anything up and that is just an ethos that I have learned the hard way via a lot of scars on my back.."
    • TG
      Tony G. | Contributor
      22 February 2021 @ 19:44
      2 0
      that was a great line.
  • PG
    Philippe G.
    22 February 2021 @ 16:26
    2 0
    Great stuff - picked up Wes' book Quantitative Value some years ago!
  • TR
    Timothy R.
    22 February 2021 @ 10:34
    0 0
    totally agree on comments around momentum, the lack of liquidity in crypto + leverage is a momentum trader's wet dream
    • CB
      Clifford B.
      22 February 2021 @ 16:21
      0 0
      @Timothy R. Correct and keeps getting better as the hodlers increase their stake.
  • AC
    Alex C.
    22 February 2021 @ 11:34
    3 0
    Very enjoyable to listen to, flows well on both sides.
  • NS
    Nikolay S.
    22 February 2021 @ 08:36
    2 0
    Amazing interview!

Chapters

  1. 00:00:46
    Professional Background
  2. 00:04:48
    Alpha Architect Mission
  3. 00:10:23
    Systematic Decision Making
  4. 00:15:58
    Is Value Investing Dead?
  5. 00:20:10
    Evidence-Based Investing
  6. 00:24:22
    High-Conviction Value and Momentum Factor Exposures
  7. 00:30:10
    Breaking Down the Asset Management Business
  8. 00:32:27
    How Military Background Influences Investing Strategy
  9. 00:38:24
    Allocating More Capital
  10. 00:41:19
    Becoming the Shopify of ETFs
  11. 00:43:27
    Assessing Economic Forecasting
  12. 00:48:34
    Future of Quantitative Trading
  13. 00:54:15
    Impact of GameStop on Market Landscape
  14. 00:59:18
    Investor Psychology