Episodes

Episode 142: Everything You Wanted to Know About the Nasdaq-100 With Efram Slen and Mark Marex

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Indices continue to proliferate inside fixed indexed annuities. Some of them stand by brand name and reputation alone. The Nasdaq-100 falls squarely into that category. Today we have two representatives from Nasdaq on to talk about their index. You may be surprised about what you learn. We welcome Efram Slen, Head of Index Research and Mark Marex, Head of Index Research & Product Development for Nasdaq.
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We hope you enjoy the show.
Links mentioned in the show:

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Transcript

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[Paul Tyler]: hi this is paul tyler and welcome to another episode of that annuity show ramsey

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[Paul Tyler]: welcome again

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[Ramsey Smith]: always great to be here

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[Paul Tyler]: all right we’ve moved to sweaters i i didn’t bring mine today with ties to shirts

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[Paul Tyler]: i know it’s what’s

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[Ramsey Smith]: i needed to mix it up like it was nothing but sort of a typical brooks brother’s

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[Ramsey Smith]: blue shirt for the first like a hundred and forty two episodes so i’ve mixed it

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[Ramsey Smith]: up now

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[Paul Tyler]: that’s that’s great hey we have a really interesting show today

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[Paul Tyler]: and it’s it’s going to be out of in indices we’ve had a lot of conversations with

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[Paul Tyler]: people about indices where they fit in the products and we thought hey listen why

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[Paul Tyler]: don’t we actually bring some actual experts on who run one and today we have

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[Paul Tyler]: representatives from the nasdaq one hundred index

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[Paul Tyler]: and i am going to say full disclosure

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[Paul Tyler]: my company by day we are proud partners with nasdaq one hundred we just

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[Paul Tyler]: actually added the nasdaq one hundred to a number of our flagship fi products but

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[Paul Tyler]: we just want to go deeper and understand what it is and i’d like to welcome two

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[Paul Tyler]: individuals Efram Slen who is the head of index research and Mark Marex who

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[Paul Tyler]: is the senior specialist nasdaq excuse me senior specialist of the nasdaq indexed

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[Paul Tyler]: research function mark that i think i clobbered your your title

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[Mark Marex]: you were totally fine thanks paul

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[Paul Tyler]: totally fine alright hey after mark welcome

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[Efram Slen]: glad to be here thanks for having us

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[Paul Tyler]: hey thanks

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[Ramsey Smith]: like

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[Paul Tyler]: hey listen first question is

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[Paul Tyler]: nasdaq nasdaq indices nasdaq index

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[Paul Tyler]: you kind of say nasdaq and somebody says oh yeah the nasdaq index but i know the

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[Paul Tyler]: world’s a lot more complicated than that can you just kind of lay out maybe after

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[Paul Tyler]: from like

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[Paul Tyler]: what in when we say index what index are we talking about how many indices could

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[Paul Tyler]: we be talking about that the nasdaq is responsible for creates

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[Efram Slen]: think thanks ball it there are actually over forty five thousand indexes that

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[Efram Slen]: nasdaq calculates right just like some of the other big big index players out

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[Efram Slen]: there there are actually hundreds of the thousands of indexes that are calculated

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[Efram Slen]: there are only a handful that people really know globally so when you think of

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[Efram Slen]: nasa i can hear every single day people say the nasdaq went up the nasdaq went

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[Efram Slen]: down that’s actually the nasdaq composite that’s usually being referenced that’s

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[Efram Slen]: the index comprised of all securities listed on the nasdaq stock exchange so

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[Efram Slen]: that’s over a couple thousand names as opposed to the nasdaq one hundred which

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[Efram Slen]: folks still know it’s very very prominent it’s the one that’s actually the

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[Efram Slen]: barometer for the invesco qq et f and the products that you were talking about

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[Efram Slen]: right it’s an index comprised of the one hundred largest nonfinancial companies

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[Efram Slen]: from the nasdaq composite so when people tend to say the nasdaq went up and na as

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[Efram Slen]: they went down they’re actually usually referencing the composite but a lot of

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[Efram Slen]: times it gets interspersed and confused with the nasa one hundred which is where

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[Efram Slen]: all the products really

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[Paul Tyler]: how many

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[Efram Slen]: are tracking

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[Paul Tyler]: yeah and

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[Paul Tyler]: maybe just explain the mechanics so companies in the nasdaq one hundred it’s out

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[Paul Tyler]: of the one hundred

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[Paul Tyler]: how does that actually happen like is this monthly weekly

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[Paul Tyler]: what’s the process do you how do you actually manage something like this

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[Efram Slen]: so so back in nineteen seventy one maybe even give this this kind of breakdown so

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[Efram Slen]: back in nineteen seventy one when nasdaq the exchange launched that’s when the

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[Efram Slen]: composite was created fifteen years later we launched the nasdaq one hundred as

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[Efram Slen]: the tradable version right so once a

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[Ramsey Smith]: what

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[Efram Slen]: year since nineteen eighty five we have an annual reconstitution it’s a rules

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[Efram Slen]: based transfer process where the one hundred largest nonfinancial companies are

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[Efram Slen]: selected that happens every december and it’s called the quad witch day of the

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[Efram Slen]: third friday of december the other three quarters just a rebalancing that occurs

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[Efram Slen]: right so weights are reviewed and ensured that they are meeting all the

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[Efram Slen]: regulatory elements there so where necessary capping might might be applied

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[Efram Slen]: yeah so that’s it again in a nutshell the the nasdaq one hundred

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[Efram Slen]: again once a year that’s when names are are added again they need to be non

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[Efram Slen]: financial and they meet a variety of other criteria but the most important being

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[Efram Slen]: that they’re listed on the nasdaq exchange

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[Ramsey Smith]: are there who who actually makes the decision so if you look at the index indices

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[Ramsey Smith]: that are out there you’ve got s p indices which are actually in some sense

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[Ramsey Smith]: actively managed and then you have

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[Ramsey Smith]: indices which are truly rule based where do you stand in terms you know what

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[Ramsey Smith]: determines what is added orle is it does somebody make a decision is there a

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[Ramsey Smith]: committee how is that managed

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[Efram Slen]: i’m glad you asked that ramsay so we are entirely rules based it’s something that

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[Efram Slen]: we really pride ourselves on and interesting and so if you look back at the

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[Efram Slen]: nasdaq one hundred one of the things that made us unique compared to the sn p

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[Efram Slen]: five hundred in particular is that tesla right made

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[Paul Tyler]: sure

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[Efram Slen]: it into the nasdaq one hundred in july twenty thirteen when it was first eligible

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[Efram Slen]: at a market cap of around fifteen billion dollars

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[Efram Slen]: fast forward seven and seven and a half years later when the s p committee said

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[Efram Slen]: yeah it’s eligible for the s p five hundred now it was at a market cap of six

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[Efram Slen]: hundred sixty billion dollars right so yeah we’re rules based transparent we’re

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[Efram Slen]: really proud of that

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[Paul Tyler]: and it interesting so you brought up tesla when i i think of nasdaq i think okay

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[Ramsey Smith]: your

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[Paul Tyler]: tech you know tech tech tech

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[Paul Tyler]: i guess

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[Paul Tyler]: what type of misconceptions

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[Paul Tyler]: do people make when they think of nasdaq and put technology and tesla in the same

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[Paul Tyler]: same bucket

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[Efram Slen]: so we actually think of teslas yeah it can be a tech company for sure it’s also

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[Efram Slen]: an auto company right there’s a lot of great things that they’re doing look i

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[Efram Slen]: said this to it to a colleague and some friends the other day a neighbor mine

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[Efram Slen]: just put solar panels on their roof made by tesla one of the coolest things i

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[Efram Slen]: think it’s the nicest roof in the block they do a lot more than just create some

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[Efram Slen]: of the nicest looking cars on the road but yeah it depends how you want to look

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[Efram Slen]: at it right they’re an innovative organization that’s actually the core that word

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[Efram Slen]: innovation

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[Ramsey Smith]: so

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[Efram Slen]: that’s what we think of when we think of the nasdaq one hundred or even the

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[Efram Slen]: nasdaq list listing venue in general in our company that’s again it’s a very very

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[Efram Slen]: often used word but the reason why we tend to think of it it’s just not not just

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[Efram Slen]: technology and of itself so if you look and you break down companies within

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[Efram Slen]: nasdaq one hundred some of the biggest names right that come up that you could

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[Efram Slen]: probably think from you you have alphabet you have you have amazon microsoft

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[Efram Slen]: apple meta platforms and so forth right so some of the biggest names out there

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[Efram Slen]: but not all of them are actually classified as technology by your general

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[Efram Slen]: classification standards actually only a handful only about half of those were

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[Efram Slen]: some of them are consumer discretionary right where is amazon actually fit like

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[Efram Slen]: they’re the biggest cloud provider in the world but where do they fit they’re

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[Paul Tyler]: or the grocery store i don’t know right

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[Efram Slen]: actually consumer

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[Efram Slen]: they grocery store that’s right so they’re actually classified as consumer

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[Efram Slen]: discretionary so again that’s a fun thing when it comes to classifications a lot

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[Efram Slen]: of it’s just perception and a lot of it just comes down to how the rules from

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[Efram Slen]: classification systems are actually putting companies into pockets

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[Ramsey Smith]: so you mentioned that uh that the companies have to be non financial so i thought

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[Ramsey Smith]: that was i actually was not aware of that and so i i’m curious you know in a

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[Ramsey Smith]: world where financial used to be something very clear before it was sort of

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[Ramsey Smith]: balance sheet intensive banks insurance companies et cetera but now we live in a

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[Ramsey Smith]: world of fintech where

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[Ramsey Smith]: the

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[Ramsey Smith]: there may be a balance sheet it’s balance sheet light and the technology is sort

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[Ramsey Smith]: of more sort of important part

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[Ramsey Smith]: of the description of the company where does fintech sit for you from your

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[Ramsey Smith]: perspective

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[Efram Slen]: so

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[Efram Slen]: we have to utilize again this goes back to the rules based transparent we

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[Efram Slen]: actually outsource the classification we don’t utilize we don’t make those

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[Efram Slen]: decisions ourselves we utilize

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[Ramsey Smith]: got it

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[Efram Slen]: the industry classification benchmark system to determine again are they

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[Efram Slen]: financials are they not where do they fit within the rankings so we don’t include

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[Efram Slen]: any companies that are classified as financials according to that bench

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[Efram Slen]: classification system called ic

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[Ramsey Smith]: understood

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[Efram Slen]: is the benchmark so companies like nasdaq ourselves we are excluded like t ro

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[Efram Slen]: price like cme group that are listed here in nasdaq who proudly have them this

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[Efram Slen]: year they’re excluded as a result of that classification

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[Paul Tyler]: yeah interesting so if if i were you know

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[Paul Tyler]: independent financial adviser presenting nasdaq one hundred to clients what would

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[Paul Tyler]: the composition look like you know ten years ago versus today i mean clearly some

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[Paul Tyler]: of those names are still there you mentioned tesla was in there i’m sure i bet

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[Paul Tyler]: amazon i bet google was but

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[Paul Tyler]: what what have been the major major shifts like from there then to now

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[Efram Slen]: so definitely in some that we’ve seen even more over the last couple of years

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[Efram Slen]: right companies like like zoom rising to prominence right with the work from home

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[Efram Slen]: trade that was seen over the last couple of years but to be perfectly frank the

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[Efram Slen]: story just continued to evolve

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[Efram Slen]: and the important dynamic here is that we try and make sure folks understand is

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[Efram Slen]: that the nasdaq one hundred itself post ah the tech bubble and burst it’s a far

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[Efram Slen]: different story so even ten years ago the story is actually pretty aren’t similar

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[Efram Slen]: today as it was ten years ago it’s the prior ten years that we’re trying to

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[Efram Slen]: ensure that people don’t have in the back of their minds

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[Ramsey Smith]: so one of the things that we chatted about you know ahead of the show is sort of

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[Ramsey Smith]: the profile of the nasdaq and the nasdaq one hundred in the market so we’re in a

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[Ramsey Smith]: place where over i call it the last really is ten years since the first custom

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[Ramsey Smith]: index came out but probably six or seven before they started coming out like in

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[Ramsey Smith]: in real numbers there’s been explosion of customized indices

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[Ramsey Smith]: in in the fia space and tell us a little bit about you know about i don’t know

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[Ramsey Smith]: how how you feel about competing in that market and why you think why you think

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[Ramsey Smith]: your index is something that’s a familiar one

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[Ramsey Smith]: you know is for many people maybe a better way to go

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[Efram Slen]: nasdaq one hundred the way we think about very many different there are many

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[Efram Slen]: different spots that it can fit into a portfolio but it is from an index

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[Efram Slen]: perspective right

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[Efram Slen]: it can be a large capital play it can be a large growth play it can be a thematic

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[Efram Slen]: play there are many different ways or even a technology play there are many

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[Efram Slen]: different ways that that this index can fit and it’s really up to frankly how

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[Efram Slen]: folks view that type of basket in their portfolio so a big part of what we tend

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[Efram Slen]: to do in our research is compare the nasdaq one hundred to the s and p five

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[Efram Slen]: hundred because we want to make sure again like i said before the call that

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[Efram Slen]: where the nasdaq was in in the early two thousand seconds to then twenty ten to

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[Efram Slen]: the twenty tens to today just such a different story we’ve seen such a big

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[Efram Slen]: maturation of companies balance sheets completely changing and flipping on their

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[Efram Slen]: heads right where today

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[Efram Slen]: when you think of the nasdaq one hundred maybe we don’t even think that we pay

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[Efram Slen]: dividends we do i mean it’s not a massive dividend paying um in index benchmark

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[Efram Slen]: but it’s actually half of what the s and p five hundred is as at the end of

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[Efram Slen]: february at around seventy basis points but we are fully fully fledged an index

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[Efram Slen]: that index dividend that is dividend payers and so forth so again it’s a pr

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[Efram Slen]: pretty pretty great uh story depending on how you’re looking to have it fit into

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[Efram Slen]: your portfolio

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[Paul Tyler]: yeah i guess how has the risk profile changed do you think of the companies over

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[Paul Tyler]: the last ten years in the nasdaq one hundred i mean i would think that if you

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[Paul Tyler]: shifted from maybe more tact to as you’re describing more mature companies with

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[Paul Tyler]: dividend pain you’d think the volatility the risk might go out however last

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[Paul Tyler]: couple of years have been crazy in terms of market volatility what’s your

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[Paul Tyler]: perspective on

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[Paul Tyler]: you know how how i would allocate you know clients’ funds to the

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[Paul Tyler]: nasdaq one hundred versus you know funds a you know indices a b or c

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[Efram Slen]: so i actually want to make sure i give mark a chance to jump in on this but one

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[Efram Slen]: thing that i’ll comment even just at before he even gets in the answer is that

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[Efram Slen]: you know we’re an index provider we’re meant to give

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[Ramsey Smith]: yeah

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[Efram Slen]: a spot for folks to understand and track benchmarks we’re not really giving

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[Efram Slen]: investment decisions so i just want to at least caveat

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[Efram Slen]: the answer there but

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[Paul Tyler]: now thank you

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[Efram Slen]: mark i’ll let you jump in thank you

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[Mark Marex]: yeah thanks ama i mean i’ll point out a couple of data

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[Paul Tyler]: i don’t know

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[Mark Marex]: points that we have one of which is a

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[Paul Tyler]: i don’t

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[Mark Marex]: you know very long term kind of graph of you know realized volatility when you

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[Mark Marex]: look at nasdaq one hundred versus something like the s and p five hundred which

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[Mark Marex]: is much broader but plays in that same large cap space right the volatility is

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[Mark Marex]: actually very very close over the last ten to fifteen years it’s maybe a

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[Mark Marex]: difference of two or three percent a year annualized on average

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[Mark Marex]: the really interesting thing though that you know we kind of explored

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[Mark Marex]: last year writing up a white paper about you know what the performance looked

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[Mark Marex]: like during the covid bear market and how that compared to things like two

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[Mark Marex]: thousand eight to things like the tech bubble the nasdaq one hundred actually

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[Mark Marex]: outperformed in terms of not just the drawdown being lower in march of twenty

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[Mark Marex]: twenty than the s and p five hundred but also volatility being lower and i would

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[Mark Marex]: say that speaks more than anything to the difference in the composition versus

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[Mark Marex]: ten or fifteen or even twenty years ago it’s not that the sector exposures are

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[Paul Tyler]: wait minute

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[Mark Marex]: necessarily different tech has continued to be pretty consistent fifty to sixty

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[Mark Marex]: percent of the index you get another twenty to thirty percent of the index coming

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[Mark Marex]: from things like consumer and health care that stays pretty consistent long term

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[Mark Marex]: even though the company underlying will grow larger and grow smaller and go

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[Mark Marex]: private and fall out and whatnot right but in terms of you know the reputation

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[Mark Marex]: that the index has gotten especially from those top five or so names right

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[Mark Marex]: they’re almost like a defensive play nowadays right they they’re extremely

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[Mark Marex]: profitable they’re very very efficient and generating cash and turning over their

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[Mark Marex]: assets they’ve grown their buybacks which kind of

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[Mark Marex]: overshadows the dividend under performance versus something like the s and p five

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[Mark Marex]: hundred they’ve grown their buybacks by literally hundreds of billions of dollars

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[Mark Marex]: over the past couple of years

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[Mark Marex]: and that i think speaks to you know why this index isn’t you know the same as it

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[Mark Marex]: used to be twenty years ago where you had a lot of companies that were still

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[Mark Marex]: early stage still were unprofitable weren’t doing things like dividends and

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[Mark Marex]: buybacks nowadays you have this very very solid fundamental core of the index of

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[Mark Marex]: about fifty percentage of the index is the top seven companies and they are all

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[Mark Marex]: massive fundamentally strong and sound companies that have this

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[Mark Marex]: tail added on top of it of companies that buy enlarge

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[Mark Marex]: disproportionately put innovation at the center of their business models that’s

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[Mark Marex]: what the index is about to me these days more than anything else

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[Ramsey Smith]: so another thing that that sort of was was on my mind as i was thinking about

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[Ramsey Smith]: thinking about your index is just what kind of what kind of assets are ifly under

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[Ramsey Smith]: management or benchmarked to the nasdaq one hundred like can you give some idea

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[Ramsey Smith]: to the audience of the magnitude of of whether it’s an etfs or fis or if it’s in

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[Ramsey Smith]: mutual funds just even ballpark figures like how much how much money looks how

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[Ramsey Smith]: much money is out there that looks to the nasdaq one hundred as its key benchmark

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[Ramsey Smith]: in order just in orders of magnitude

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[Efram Slen]: there are hundreds of billions of dollars that that track the nasdaq one hundred

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[Efram Slen]: across pretty much every single financial product wrap that’s been created right

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[Efram Slen]: from etfs to mutual funds to insurance products utd products futures options you

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[Efram Slen]: think of a product there is an ass at one product tracking it in some capacity

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[Efram Slen]: some possibly even somewhere in the world right so there are efs in well over

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[Efram Slen]: twenty countries in the world alone let alone other product wrappers the eme

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[Efram Slen]: features that track the nad seven hundred have grown

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[Efram Slen]: explosively over the last couple years so and the micro mi launching out of the

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[Paul Tyler]: next

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[Efram Slen]: cme here as well so

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[Paul Tyler]: it’s

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[Efram Slen]: tons of derivative trading going on in very increased capacity the cues hit hit

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[Efram Slen]: over two hundred billion dollars

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[Efram Slen]: recently enough and approaching backup on the nih qs that’s the invest qq et f so

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[Efram Slen]: yeah just hundreds of billions of dollars that’s the short answer there

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[Paul Tyler]: it well go ahead

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[Ramsey Smith]: so i just kind of add quickly to that so the reason i brought that up is that you

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[Ramsey Smith]: know it’s somebody

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[Ramsey Smith]: who was in this space in my prior career like one of the challenges that

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[Ramsey Smith]: one of the tensions was always between alright you come up with something that’s

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[Ramsey Smith]: creative and customized it may work if you look at history but is it tradable on

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[Ramsey Smith]: the other side you’ve got you know you’ve got something like the nasdaq one

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[Ramsey Smith]: hundred and some other indices which are very tradable which ultimately in

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[Ramsey Smith]: addition to being recognizable also brings the ability to hedge efficiently

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[Ramsey Smith]: because behind every one of every transaction every fia purchase there’s a

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[Ramsey Smith]: hedging transaction so that’s something that i think is something that you

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[Ramsey Smith]: there’s not a question here just just a comment but i think

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[Ramsey Smith]: that is an important element

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[Ramsey Smith]: a of using a broad based indic index rather

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[Ramsey Smith]: in this in the fia space

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[Efram Slen]: i’ll even go on top of that and i i appreciate you saying that ramsay it’s great

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[Efram Slen]: this index has no they said launched nineteen eighty five is an over three seven

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[Efram Slen]: year track record right so the products have been around for quite a long time

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[Efram Slen]: like the cues launched in ‘ninety nine right and that’s again one of only saying

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[Efram Slen]: before many different products and product wrappers so yes having that track

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[Efram Slen]: record absolutely stands without question

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[Ramsey Smith]: really

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[Paul Tyler]: now well of course from a macro perspective

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[Paul Tyler]: we just get through covid only to have this awful war breakout

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[Paul Tyler]: in ukraine tell us how has this impacted the nasdaq one hundred

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[Efram Slen]: so it it hasn’t from a an actual inclusion perspective so there were no russian

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[Efram Slen]: equities in the nasdaq

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[Efram Slen]: one hundred but like many index providers out there like and p and m s c i fy

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[Efram Slen]: russell

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[Efram Slen]: all four of us actually put our announcements to remove russian equities from

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[Efram Slen]: from all over index benchmarks

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[Paul Tyler]: interesting so no no change no

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[Paul Tyler]: if i were sitting down with the client

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[Paul Tyler]: no company no russian company was in in nasdaq one one hundred that would have

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[Paul Tyler]: been pulled then

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[Efram Slen]: that’s correct

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[Paul Tyler]: okay interesting

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[Ramsey Smith]: so what are what do you see as sort of the the opportunity set in this space

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[Ramsey Smith]: broadly so just as as we mentioned before

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[Ramsey Smith]: a lot of people are getting get into the index game so you mentioned that there

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[Ramsey Smith]: are forty thousand just just you alone manage forty to forty five thousand in

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[Ramsey Smith]: indices is that right

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[Ramsey Smith]: well

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[Efram Slen]: that’s right that’s right

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[Ramsey Smith]: what what’s interesting to me is that i think they are only the last time i

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[Ramsey Smith]: checked there were like thirty five hundred stocks in the u s and the u s market

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[Ramsey Smith]: the wilshire five thousand doesn’t even cover five thousand stocks anymore back

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[Ramsey Smith]: when i started it had seven thousand in it right now now i think it has a lot

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[Ramsey Smith]: less so yeah i’m curious do you have a sense for what the future is

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[Ramsey Smith]: in indexes whether it’s broad based or more customized indices

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[Ramsey Smith]: it’s it’s been a remarkable proliferation

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[Efram Slen]: there absolutely has been um there are more and more ways to slice and dice

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[Efram Slen]: things than you can imagine so of the forty five thousand plus indexes that we

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[Efram Slen]: offer many of them actually go back to one index it’s is a global equity index

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[Efram Slen]: benchmark of around nine thousand global equities from developed in emerging

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[Efram Slen]: markets

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[Efram Slen]: that cover forty four countries i mentioned the exclusion exclusion of of russia

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[Efram Slen]: as well as a large mid small cap all cap large mid cap different currencies

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[Efram Slen]: different ways to calculate with and without dividends before you know it you’ve

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[Efram Slen]: got again we could do it on a far more the way we did it but the way we have it

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[Efram Slen]: today it’s is over forty around forty thousand or so

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[Paul Tyler]: just

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[Efram Slen]: indexes from one

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[Efram Slen]: basket of nine thousand names now think about that

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[Ramsey Smith]: mo

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[Efram Slen]: from from from how the way things have continued to evolve over the last even

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[Efram Slen]: fifteen years in the index space it started out

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[Efram Slen]: beyond fifteen years as just ways for folks to track the markets right so there

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[Efram Slen]: are only a handful of indexes that people really paid attention to indexes

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[Efram Slen]: continued to come to market just in the benchmark variety that are regular market

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[Efram Slen]: cap literally what is the world valuing these indexes as and then we start to

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[Efram Slen]: have some new indexes come to market right now were equal weighted there were

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[Efram Slen]: fundamentally weighted different ways to

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[Ramsey Smith]: maybe

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[Efram Slen]: track and and select and manage portfolios and then we started saying all right

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[Efram Slen]: well what are the active managers doing how can we try and get exposure in

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[Efram Slen]: returns that are like what active managing that’s when the rise of smart beta

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[Efram Slen]: came around and it was you know where factor indexes came about so folks were

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[Efram Slen]: focusing on far more than just value and growth there’s look at underpinning data

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[Efram Slen]: points from balance sheets and financial statements and saying well i want to

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[Efram Slen]: focus in around this data point so mark brought up before buybacks right we have

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[Efram Slen]: a buyback achiever index here we have many dividend based indexes here we have

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[Efram Slen]: many multi factor indexes that can look at a wide range of data points and then

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[Efram Slen]: over the last several years thematics has been the new rage right that’s where

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[Efram Slen]: folks have been digging into not technology or financials or health care it’s

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[Efram Slen]: fintech right it’s a smaller baske games that are focusing on like we said before

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[Efram Slen]: just just those specific names looking at names that are in cloud computing only

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[Efram Slen]: at cyber security only you’re only going to get thirty fifty maybe seventy names

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[Efram Slen]: at most in some of these thematic baskets if you’re really pushing up to seventy

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[Efram Slen]: sometimes far less

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[Efram Slen]: and again that’s what we’ve seen really things continue to evolve and it’s been

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[Efram Slen]: an awesome thing to be a part of been in nasdaq or

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[Ramsey Smith]: she

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[Efram Slen]: over eleven years it’s been a great ride watching frankly the continued growth

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[Efram Slen]: and maturation of the space

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[Paul Tyler]: interesting well yeah tell us just a little bit about both your background so a

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[Paul Tyler]: you’ve been at nasdaq for eleven years

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[Paul Tyler]: you know tell us what got you nasdaq you know what what keeps you

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[Paul Tyler]: totally engaged as we can tell in this in this space

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[Efram Slen]: i i just love frankly i i love coming to work working with

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[Ramsey Smith]: the

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[Efram Slen]: folks like mark working folks like wealthy who in the space where you have to

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[Efram Slen]: have conversations around around the markets around what we’ve got going on but

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[Efram Slen]: what my job really entails to today i’m responsible for all the research content

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[Efram Slen]: that we put out across our index business

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[Efram Slen]: so when i started here at nasdaq i was a combination of new index development as

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[Efram Slen]: well as putting our content supporting our business but today the roles evolved

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[Efram Slen]: and i’m responsible for to all content support supporting the index space here in

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[Efram Slen]: nasdaq

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[Paul Tyler]: yeah mark mark you your background and

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[Paul Tyler]: what excites you most about

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[Paul Tyler]: this particular space in the in the market

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[Mark Marex]: thanks

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[Ramsey Smith]: yeah

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[Mark Marex]: yeah i mean i’m coming up on three years with nasdaq here and specifically with

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[Mark Marex]: ephram team

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[Ramsey Smith]: but

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[Mark Marex]: took a bit of more of a roundabout path to get here like ramsey i did my stint at

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[Mark Marex]: took a bit of more of a roundabout path to get here like ramsey i did my stint at

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[Mark Marex]: a big new york bank for about eight years in my case city coming out of college

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[Mark Marex]: a big new york bank for about eight years in my case city coming out of college

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00:24:19,794 –> 00:24:24,354
[Mark Marex]: and my last role there was in sort of a client strategy and analytics role within

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00:24:19,794 –> 00:24:24,354
[Mark Marex]: and my last role there was in sort of a client strategy and analytics role within

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[Mark Marex]: ib d

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00:24:24,134 –> 00:24:25,134
[Mark Marex]: ib d

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00:24:26,114 –> 00:24:31,634
[Mark Marex]: but really you know for a long part of that time at city my passion was elsewhere

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00:24:32,034 –> 00:24:34,754
[Mark Marex]: and more in the realm of asset management

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00:24:35,794 –> 00:24:38,514
[Mark Marex]: and specifically systematic strategy

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00:24:39,414 –> 00:24:40,414
[Mark Marex]: research

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00:24:40,994 –> 00:24:46,994
[Mark Marex]: and creation and execution that led me to launching a startup fund with a close

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00:24:47,154 –> 00:24:52,674
[Mark Marex]: colleague of mine to trade u s equities long short on a very systematic basis

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00:24:52,914 –> 00:24:58,194
[Mark Marex]: right and you know very risky endeavor didn’t end up working out long term but

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00:24:58,354 –> 00:25:04,034
[Mark Marex]: really kind of cemented my desire to stay within that general space of you know

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[Mark Marex]: how do you design launch and then support

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[Ramsey Smith]: so

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00:25:07,634 –> 00:25:08,914
[Mark Marex]: systematic strategies

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00:25:10,274 –> 00:25:14,034
[Mark Marex]: that are data driven that are you know kind of fully transparent that offers

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00:25:13,934 –> 00:25:14,934
[Mark Marex]: something unique

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00:25:15,954 –> 00:25:17,554
[Mark Marex]: and i found that nasdaq

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00:25:18,594 –> 00:25:23,554
[Mark Marex]: value proposition was very compelling from the perspective of you know it has

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00:25:23,714 –> 00:25:29,314
[Mark Marex]: this industry leading index business that is very much underpinned just like s

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00:25:29,394 –> 00:25:34,194
[Mark Marex]: and p right or m sci underpinned by this flagship product that everybody almost

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00:25:34,434 –> 00:25:36,354
[Mark Marex]: everybody knows and has such a great

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00:25:37,874 –> 00:25:41,394
[Mark Marex]: reputation in terms of the nasdaq one hundred but then you have all these other

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00:25:41,554 –> 00:25:46,434
[Mark Marex]: interesting things going on under the hood that people you know outside of nasdaq

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[Mark Marex]: will really not have any idea about right things like designing indexes with

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[Mark Marex]: embedded options whether that is using options to juice your yield or to provide

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00:25:56,914 –> 00:26:01,154
[Mark Marex]: downside protection or to minimize volatility on something like the nasdaq one

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00:26:01,314 –> 00:26:02,594
[Mark Marex]: hundred you know we do that

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00:26:03,794 –> 00:26:09,394
[Mark Marex]: as era mentioned the thematic space that’s been such a great source of creativity

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00:26:10,754 –> 00:26:15,234
[Mark Marex]: and trying to figure out ways of how do you define a new industry that is driven

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[Mark Marex]: by a single technological breakthrough do you go peer play do you go uh sort of

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[Mark Marex]: broad based in coverage with that and working with clients every day to figure

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[Mark Marex]: out how do we design an index from the ground up that is rules based that is

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00:26:30,034 –> 00:26:32,434
[Mark Marex]: transparent that is reputable and invest

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[Mark Marex]: it’s a

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00:26:33,940 –> 00:26:34,940
[Paul Tyler]: my

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[Mark Marex]: great challenge because there’s no single right answer but i feel like we have

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00:26:38,194 –> 00:26:41,954
[Mark Marex]: these guidelines these principles that move us in the direction of

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[Mark Marex]: putting out market leading products whether it’s thematic whether it’s smart beta

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00:26:47,314 –> 00:26:50,434
[Mark Marex]: or something else day in and day out and that’s really exciting

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00:26:49,920 –> 00:26:54,640
[Paul Tyler]: excellent okay so for ramsay and i have an appointment with a client i guess at

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[Paul Tyler]: two thirty we’ve got two hours to prep for this for ramsey and

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[Paul Tyler]: oh my

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00:27:00,133 –> 00:27:01,133
[Ramsey Smith]: oh my go

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00:27:00,400 –> 00:27:04,720
[Paul Tyler]: gosh i’ve gotta explain the nasdaq one hundred what what’s the best place to go

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00:27:05,280 –> 00:27:09,760
[Paul Tyler]: to learn enough that i can actually represent your index and you know the the

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00:27:09,840 –> 00:27:14,960
[Paul Tyler]: mechanics and and what’s you know and and the the stocks inside it so that i can

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00:27:14,820 –> 00:27:15,820
[Paul Tyler]: give somebody

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00:27:16,720 –> 00:27:22,000
[Paul Tyler]: who’s trusting me a good understanding of where their money is

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00:27:23,280 –> 00:27:25,680
[Paul Tyler]: what their money is going to earn interest credits against

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00:27:26,916 –> 00:27:30,916
[Efram Slen]: so there are a few spots where we have kind of content around the nasdaq one one

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00:27:30,916 –> 00:27:34,996
[Efram Slen]: hundred so i’ll give you kind of both both locations and and landing pages so one

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00:27:35,156 –> 00:27:41,636
[Efram Slen]: is nasdaq com backlash nasdaq dash one hundred the other one it’s a little bit

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00:27:41,716 –> 00:27:46,996
[Efram Slen]: harder to find but perfectly perfectly honest but if you go to indexes nasma com

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00:27:47,396 –> 00:27:52,356
[Efram Slen]: and you go in the search bar and look for nd x n dx which is the index ticker for

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00:27:52,356 –> 00:27:56,516
[Efram Slen]: the nasa of one hundred or just type in nasa gash one hundred you scroll down and

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00:27:56,596 –> 00:28:00,036
[Efram Slen]: be able to find get on that page and able to see kind of all the great content

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00:28:00,036 –> 00:28:01,876
[Efram Slen]: there that we have around around the index

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00:28:02,640 –> 00:28:07,120
[Paul Tyler]: oh that’s great thanks ramsey any final thoughts or questions this is your this

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00:28:06,940 –> 00:28:07,940
[Paul Tyler]: is your space

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00:28:07,993 –> 00:28:12,553
[Ramsey Smith]: so just just one one quick question so you’ve got forty forty thousand plus

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00:28:12,793 –> 00:28:17,273
[Ramsey Smith]: indices and it sounds like you you know you interact very proactively with your

448
00:28:17,913 –> 00:28:22,793
[Ramsey Smith]: your clients you know i’m wondering sort of what are the various ways they it can

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00:28:22,873 –> 00:28:26,793
[Ramsey Smith]: interact with you could a could some entity it could be an insurance company

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00:28:27,033 –> 00:28:31,513
[Ramsey Smith]: could be a bank it could could be a dis an insurance distributor right can they

451
00:28:31,593 –> 00:28:33,433
[Ramsey Smith]: come to you and and

452
00:28:34,553 –> 00:28:38,393
[Ramsey Smith]: work with you to develop their own custom index that they can launch on their

453
00:28:38,633 –> 00:28:42,953
[Ramsey Smith]: product i guess it’s do you go which way do you go is it inquiry reverse increase

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00:28:43,193 –> 00:28:47,113
[Ramsey Smith]: can you go both ways i’m just curious how how people can engage with you to

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00:28:48,153 –> 00:28:49,353
[Ramsey Smith]: to create unique product

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00:28:50,196 –> 00:28:54,036
[Efram Slen]: it’s absolutely both but our our favorites actually the one that’s in between

457
00:28:54,436 –> 00:28:57,796
[Efram Slen]: where it’s together right where we come together and say we have an idea and they

458
00:28:57,796 –> 00:29:01,556
[Efram Slen]: have an idea we come together we work together create the final solution for me

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00:29:01,636 –> 00:29:04,676
[Efram Slen]: that’s the most exciting that i’ve been a part of and i know the team kind of

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00:29:04,676 –> 00:29:08,116
[Efram Slen]: loves here of course it’s great when someone has their own view and we help them

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00:29:08,276 –> 00:29:11,476
[Efram Slen]: get that out in the market or we have our own view we get that in the market my

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00:29:11,556 –> 00:29:15,236
[Efram Slen]: favorite though is when everybody comes together and we’re able to create that

463
00:29:15,396 –> 00:29:17,796
[Efram Slen]: bin kind of thought into a final index solution

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00:29:19,600 –> 00:29:23,600
[Paul Tyler]: okay well hey well listen uh after mark thanks for your time with the links

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00:29:25,120 –> 00:29:29,280
[Paul Tyler]: in the show notes and really appreciate your time maybe we can another time we

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00:29:29,360 –> 00:29:31,840
[Paul Tyler]: can actually come down to the the floor when it’s

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00:29:32,960 –> 00:29:36,960
[Paul Tyler]: know we get through this whole covid and record a show there love to love to do

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00:29:37,040 –> 00:29:38,240
[Paul Tyler]: that in new york sometim

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00:29:38,013 –> 00:29:39,013
[Ramsey Smith]: sh

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00:29:38,480 –> 00:29:39,840
[Paul Tyler]: so alright

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00:29:39,716 –> 00:29:41,476
[Efram Slen]: that’d be awesome we’ll have have to do that

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00:29:41,040 –> 00:29:46,320
[Paul Tyler]: listen yeah all right hey thanks so much ramsey thanks and uh joins you next week

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00:29:46,293 –> 00:29:47,293
[Ramsey Smith]: i don’t know

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00:29:46,480 –> 00:29:48,880
[Paul Tyler]: for another episode of that annuity show

The discussion is not meant to provide any legal, tax, or investment advice with respect to the purchase of an insurance product. A comprehensive evaluation of a consumer’s needs and financial situation should always occur in order to help determine if an insurance product may be appropriate for each unique situation.

Ashley SaundersEpisode 142: Everything You Wanted to Know About the Nasdaq-100 With Efram Slen and Mark Marex

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