00:00:57 · Jan Van Eck, Anthony Pompliano
[00:00:57] S1: About $235,000,000,000, under management. A bunch of that actually is outside The United States. We have, half of our inflows over the last couple of years come from, Europe and and Asia, about 550 people. We mainly do ETFs as everyone knows but we also have our, I'll call it, legacy mutual fund business and we've been getting involved in private markets, so early stage tech investing and some later stage stuff with the SpaceXs of the world. [00:01:29] S2: Now when you think about the rise of some of these themes, you have ridden some, but you've also avoided some. What's the framework for deciding when you guys are gonna play versus not? I know you have this ten year macro framework that you use to think about investing more generally.
00:01:48 · Jan Van Eck, Anthony Pompliano
[00:01:48] S1: Yeah. Well, those are almost two separate questions, so I'll take them. VanEck's overall investment philosophy, I guess, I would say is it's really impossible to know what's going to happen on a day to day basis. What we tend to like to look for is big ten year trends, as you said, ten year macro, because asset allocation is really the most important thing to your portfolio. So, what are those trends? What do we look for? We look for big changes in government spending, big changes in monetary policy, regulation as a third thing, and then technology. So, let me explain regulation because people don't understand that. When China pivoted to a price based capitalist based, you know, basically economy, that was a big... The biggest deregulatory move of, you know, of our career or my career. That's happening now in India or it happened in India. So now it's just a matter of it playing out. So I have very high conviction that India is gonna be the size of of Europe in ten years. So very simple three three ten year trends that we can't do detail. AI, India, and then government spending is the biggest risk to your portfolio. As far as what we do as an ETF issuer, it's all judgment. We haven't figured out the AI yet. How do you look at sort of trends or industry segment... Segments that will come in and out of favor, and some things that are just fads? So it's it's it's it's hard. [00:03:22] S2: Let's take each one of the trends. Let's first maybe start with India. What is driving your conviction that it will be as big as Europe over the next ten years?
00:03:22 · Anthony Pompliano, Jan Van Eck
[00:03:22] S2: Let's take each one of the trends. Let's first maybe start with India. What is driving your conviction that it will be as big as Europe over the next ten years? [00:03:31] S1: I mean, Modi did... There are two basic things. One is the digitization of their economy. So, everyone in India effectively can afford a mobile phone. It's so dirt cheap. It's like a couple of dollars, a month. And the government put all identification online as well, so they've sort of digitized your government ID. So for example, during COVID, they said, We don't need you to fill out to open a brokerage account, a paper based thing. Just do it online. I met with brokerage firms that were opening a million accounts a month. Now, the average account was low, but that just shows the lack of friction that digitization has caused in India. And then the second thing is just taxation and, you know, lots of rules like they had labor laws that if you had them... A company with 100 employees or more, you'd have different rules or 1,000 employees or more. So all companies, Anthony, were either nine people or nine ninety nine. It doesn't make any sense. So they've just done a lot of that, you know, sequentially bankruptcy laws, all kinds of different things. And, you know, I think it's sort of very high conviction. That's why I focus on the ten year stuff, very high conviction that that will play out over time based on history.
00:04:51 · Anthony Pompliano, Jan Van Eck
[00:04:51] S2: Almost a decade ago, I went to India for the first time. I spent two weeks. And as I went around the country, I kept meeting all these founders and they would come up to me and say, I built this mobile app. I have a 100,000 users. I was like, oh my god. These guys are all killing it. And then somebody pulled me aside and said, a 100,000 users in India is like a 100 in America. There's just so many people. Right? So there are a lot of people. Talk about the [00:05:14] S1: But, you know, I don't know if you have staff or do operations in India, but almost every major tech company has very major... And not just trivial automation kind of tasks, but really product creation that's happening there. [00:05:29] S2: Talk about the AI theme, and there's a lot of different ways to play this. The last two, three weeks, people have been concerned. There's been a little bit of a slowdown or sell off. How do you see maybe the the decade long themes that people should just tune out the noise and focus on?
00:05:45 · Jan Van Eck
[00:05:45] S1: Yeah. I mean, it's it's just leapfrogging of better software, as I call it. I don't use the word intelligence because I don't know what that is, but it's just better, faster, smarter software that can write software, and that's the first part. So, I think that the the trade is changing, Anthony. So, it used to be very simple. I'm the simple... Demand's here, supply's here. Right? And, there will be a lot of dynamism within the ecosystem. Like I say, a year ago, fourth quarter of last year, CoreWeave and Oracle were down 50%. So the public markets are are merciless, right, when they smell, financing problems or tech changes or whatever. So there's a lot of change within the trade, but the overall was obviously huge amount of demand relative to supply. I think right now, we're getting to a stage, we were talking about this before, where you can project token demand going forward. So for every other segment or other company, you can say, oh, they're gonna sell x number of hamburgers or x number of Netflix subscriptions. We're now, I think, going to be able... We have enough visibility that we can start projecting token demand. What we've did is take our user base and said, what is our adoption by user? And basically, in the first year, your token usage goes up eight times, and then it grows about 25% after that annualized. But a lot... There's a lot of VanEck people that don't use it a lot. So that's a rolling process, and we kind of push that forward to the industry and came up with the same industry estimates of total token demand, that that other people did from a macro perspective. So I think that's gonna be the game going forward.
00:07:35 · Anthony Pompliano, Jan Van Eck
[00:07:35] S2: I'm sure most of the people who work in the ETF industry would love to understand how VanEck is using AI internally. Have you figured out novel use cases that are, like, ETF specific, or is this still claudess, like, you know, either for coding or, like, a Google on steroids? [00:07:52] S1: There's nothing magical, I would say. To me, it's... I always say AI is just data, software, and people. And, you know, eighteen months ago, you... AI couldn't read a PDF. Right? Six months... Seven months ago now, I've been kept yelling in my IT department, why can't these agents read my email and my calendar and make my life more efficient? Now that's table stakes. Right? So it's just this sequence of accessing more and more databases within VanEck and making... Enabling... Giving the power to the user. And then what we're trying to do is make sure that someone builds an application, not five people build the same application or agent. So we're trying to promote that sharing, but it's a lot of just, education and communication. Yeah. [00:08:44] S2: And have you hired people specifically to manage, like, the AI spend or the AI intelligence inside of the firm, or is this just the people you had are now adopting the new technology?