Anne Bar (2:31)

It's an interesting approach, one that caught

Host/Market Reporter (2:33)

our eye and it's a great conversation. Coming up in just a moment. But first, this episode is brought to you by Charles Schwab Is Recency Bias

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Host/Market Reporter (3:05)

Host Marc Riepe, head of the Schwab center for Financial Research, and his guests offer actionable insights on what you can do to help fight off these decision making biases. Download the latest episode and follow@schwab.com financialdecoder or or wherever you listen. And now my Money Movers conversation with Adam Patty, the CEO of VistaShares ETFs.

Anne Bar (3:26)

This is so timely, Adam. I caught a look at three ETFs in particular that Vista Shares has as part of its Target 15 group of ETFs and here's why they caught my eye. These three in particular are named after famous investors Bill Ackman, Stanley Druckenmiller and Warren Buffett. And the tickers of these are A C K Y O M A H which is a nod to Omaha and D R K Y. Why did you pick these three?

Adam Patty (3:55)

Yeah, well thank you for having me. Firstly, you know, look, over the last several years the market has really just driven up, right? I mean we've been in a momentum driven market largely led by the Mag 7 and other, you know, large tech firms. So everyone was a genius by just investing in the S&P 500. Everything just went up. But that's not the reality of how the market works. In most market cycles we're moving into more of a stock pickers market. And we were trying to, we talk to investors, we try to understand what their needs are. And you know, the indexes, they're looking to move away from the core indexes. Now you never want to go completely away from the core indexes, but you want to diversify because they are so heavily weighted in those Mag 7 stocks. The S&P 500 for instance is around 45% in the top 10 holdings. The QS I think is around 65 or 70% at this time. So you know, you're really over concentrating those names. So when we went out to the market we said all right, well who are the best stock pickers in the world? And then we did an analysis to try to determine which ones we believe were best suited for kind of an asset allocation related ETF and what the parameters we put in place were know high conviction and concentrated bets. People who held their positions for a long period of time. So the first one we brought out was the Warren Buffett, of course, he's the godfather. And then we moved into Bill Ackman, a C K Y Stanley Druckenmiller as you mentioned, drky. And we also just launched a David Tepper fund tpry. And what makes them special is not only do they all hold the top picks in their equity portfolios, but they then we overlay what we call our Target 15 process. It's an options overlay to generate 15% income annually paid monthly. So every single month we look to pay 1.25% distributed out to the investors. So we're not looking to maximize income. We're not looking for one two six or one two four. We want that one to five nice stable income that people can rely on and really build wealth over time.

Anne Bar (6:09)

So let's just talk about the process a bit if you don't mind. Adam, to your point, you could not have picked three more individuals better known for the level of their conviction, right? The courage of their convictions. But to the extent you're trying to get a portfolio together that replicates how they have allocated their own portfolios, there is a lag. Right? We only find out through retroactive filings. When these, these filings are. We don't really get visibility into when a Bill Ackman or, or a Warren Buffett actually buys into a stock. So how do you deal with that timing difference?

Adam Patty (6:42)

Great question. So These are active ETFs, active to a rules based process. The process to your point is where we scrub through the 13 Fs every quarter to try to determine what moves they make. But when we get wind of a move that has been made intra quarter, for instance, Bill Ackman came out a month or two ago. I forget now that he just put meta into his portfolio. We were able to actually execute that trade that day before the rebound. So we can be responsive when we do get information. But Even with the 13F filings, there's an average of a 45 day lag. It's a 90 day quarter average. 45 days is half of that. But the reason why we chose these investors is because they're not wheeling and dealing. They are making moves, let's be clear. But they're not making rapid moves, trading moves, you know, either short or long on a daily basis. They have high conviction in long holding periods which is why we thought they were perfect for our strategies.

Anne Bar (7:42)

I'm really curious that you picked an activist. And let me give you the context for what I'm about to ask you. I actually love to follow where activists are putting their money. I really believe in following that particular bucket of capital. Do you think that with a market this expensive, we should be paying more attention to these folks? Because at the end of the day, they are willing to take action. They are willing to try and create value through operational changes, but they do get a tough rap from some corners of the market. What's your overarching view on activists in general and then Bill Ackman specifically at Pershing?

Adam Patty (8:14)

Well, I'm a big Bill Ackman fan and to be clear, none of these products are endorsed by them. Right. We are using publicly available information. I want to make that clear. But I am personally a big fan of Bill Ackman's. I mean, look, the activist approach is healthy for markets. It keeps things healthy, right? They go in, they shake things up. They want to get. They want to create shareholder value. And that's at the end of the day, as investors, that's what we're looking for. So certainly, you know, some people don't like it when they're on the losing end. But as an investor in their portfolios, clearly we believe it's a good thing. And you know, to your earlier point, the markets have been expensive, but that's why we're in a stock picker's market, at least we believe, and why it's important to, you know, be. Be smart about where you're deploying capital. And for us, the best way to be smart is to leverage the expertise of these legendary investors.

Anne Bar (9:03)

My last question on the activist distribution ETF A, C K Y. Have you seen any sort of patterns, either people coming in or out of your etf? Adam, since Pershing square took public in recent weeks, one of its entities were people trying to buy into a little piece of Ackman by buying into your etf. And have they now switched their flows over to Bill's own direct vehicle?

Adam Patty (9:26)

Yeah, I mean, certainly he's going to get the flows. He's Bill Ackman. He should get the flows. But what we do in acky is we actually now own a 10% stake in PSUs. So similar to what we do with OMAH, we own 10% in BRKB and then the top 20 holdings of Berkshire Hathaway. For Ackman, we couldn't wait for the IPO to come out because we wanted to acquire it within the portfolio at a 10% stake and then have his largest holdings below that, we believe just like Omah is a complement to brkb, it's not a full replacement. Berkshire is Berkshire. But it's a great way to create a dividend off of BRKB. And now with PSUs, which is Bill Ackman's fund, you know that's not kicking out income, right? So own PSUs. We own some of it too. But by buying Acky, you're getting that 15% annual income while you get the capital appreciation or most of it that you'll experience in the core security they're offering.

Anne Bar (10:24)

Let's talk about omh, that your etf, named after the Oracle of Omaha, that's Warren Buffett. Of course there is some sort of narrative out there which is to own Berkshire Hathaway or a derivative of it, is basically just to own surplus cash in some regards.

Host/Market Reporter (10:40)

Right.

Anne Bar (10:40)

To be sort of overweight cash holdings. What's your thinking on that and how is your ETF perhaps rebalanced in a different way to make sure that you're not overexposed to, to securities, to Treasuries?

Adam Patty (10:52)

A great, great question. So. Well, first of all, Berkshire Hathaw underperformed for the past year, as we know, which is understandable because we've been in this momentum driven market where value stocks typically don't perform. Now, when value stocks start performing, which is, I believe we're moving into more of a value and quality tilted market. Now, Berkshire typically acts as a coiled spring and outperforms. So I think we're right at the beginning of that now, which is exciting. So in terms of the cash, yeah, I mean, look, Berkshire is locked and loaded. They have 397 billion in cash ready to deploy, which is very exciting having a new CEO in place who has particularly more familiarity with the technology space. There might be some action going on there in the rebalancing of the portfolio over the years. Again with Omah, the difference with us is we do own a 10% stake in Berkshire Hathaway itself, but then the rest of the portfolio is the top 20 names within Berkshire Hathaway. So American Express, Apple, bank of America, Visa, Chevron, Occidental Petroleum, their top holdings. So Omah doesn't have that cash drag though, with other than the position we have in Berkshire itself. But look, I would view the cash in Berkshire as a positive. Right? I mean they're going to deploy that when they find opportunities. So that's what you buy Berkshire for.

Anne Bar (12:09)

Well, we just had Berkshire Hathaway shareholder meeting this weekend. It was Greg Abel's first in the CEO seat. Were you tuning into that, Adam, and if so, what were the big takeaways for you?

Adam Patty (12:19)

I watched the whole thing. I did, I did. Because, I mean, I, you know, I paused it a little bit here and there, you know, but pretty much for hours. And I really wanted to get a sense of Greg Abel as a CEO because that is really the issue, right. Can we trust him? And, you know, beyond the excellent operating results and the resurgence of their insurance operations, that was all stellar, but I really took away a few really interesting things. First, there's no replacing Warren and Charlie Munger, clearly as a duo, but Greg Abel and Ajit, a lot of personal chemistry, which was, I was looking for that because that would have been a risk factor to me if there wasn't that clear personal chemistry because we need them both to perform. So that was really interesting. I thought. The other thing I thought was interesting is that Greg took great pains to continually hammer that the investment process and discipline that Warren Buffett is best known for is, is going to remain and that is how they're going to run this company. So I thought that should, should give people a lot of, a lot of comfort that he's not going to make wholesale changes in what has worked so well over 50 years. The last thing I thought was very interesting as well is people say, well, where is Greg going to take the portfolio? When he had a conversation based on a question about the utilities and he was talking about the utility assets as a growth area, which I thought was interesting because he kept talking about AI and technology, which to me meant, you know, this is a man that is very comfortable with technology. And I just based on the depth of his conversation around it, which, you know, of course it wasn't stated, but it will be interesting to see if coming soon over the years that we see more of a technology bent to the portfolio now that we are at a technology driven economy versus industrial driven economy for the last 50 years.

Anne Bar (14:11)

That's right. The one criticism that has been levied at Buffett has been that he was maybe a little late to the game on some of these big tech names. We're going to wrap Adam, with Druckenmiller, of course. So this is the, the third named etf. You've also got Tepper. Hopefully you'll come back, we'll talk talk about Tepper another time. But I'm very curious. I've got in front of me the top 10 holdings in your ETF. DRKY. This is as of May 1st, which I found on your website. And you've got in there a couple that aren't names I hear talked about certainly in sort of the podcast or the X universe in quite, with quite so much frequency. You've got Tavor Pharmaceuticals and you've also got Woodward.

Adam Patty (14:48)

I mean look, he is, he is a very eclectic portfolio and he is known for kind of going where the opportunities are, looking everything top down. Those are very Teva Pharmaceuticals I'm very familiar with. You know, it's a, you know, generic branded medical company that creates these generic brands when, when, when the name brand drugs come off, off a brand come off patent, I should say. So he is very heavy in biotech and health care generally versus a lot of these other great investors who are more kind of tech and industrial focused. So I think they're very interesting companies. I mean Bloom Energy is certainly another one that's been on a tear. Now he does as Alphabet and Amazon in there as well. But his performance has been stellar.

Anne Bar (15:37)

Let's finish Adam with a question for you on what's next for Vista shares because these ETFs we've been going through have been, they've been in motion since it October of last year. Is that right? So give us a sense for where you're heading next in terms of other ETFs that might be on the horizon or what you plan to do with these three.

Adam Patty (15:54)

Well, we're going to continue leaning into our growth equity supercycles which you talked to my partner John McNeil about. We're going to keep going with the target fifteens, which have been really exciting to investors and we have some other things in the hopper that I can't really talk about. We launched, we're a new company. We launched our first ETF in December 24th and you know, we just went through 1.2 billion in assets. So we've got a nice growth, growth trajectory and it's really because of investors like you. You serve in your audience. We've been really leaning into the retail investors who are very sophisticated. When I was 25, 30 years old, I was not as sophisticated. I was looking for a quick hit. These people are really looking to stack dividends and build for the future and being very intelligent about it. So thank you.

Anne Bar (16:37)

Well, thank you so much for joining. Adam. Please do come back. I do know there's a lot going on. I will say quick sneak preview. I went onto your website. It looks as though there is maybe a private product on the horizon. So I've signed up for the alerts on that. So hopefully you'll come back when you're able to share more with us.

Adam Patty (16:52)

Thank you so much. I really appreciate your time.

Anne Bar (16:54)

Well, huge thanks to Adam Patty for joining me.

Host/Market Reporter (16:57)

Great energy, great insights. And just a note, when Adam was talking about the companies in the Druckenmiller ETF he manages, he mentioned Bloom Energy, which has certainly, as Adam put it, been on a tear. Its share prices up over 240% this year. Well, this Friday on the show, a special timely treat because I'll be speaking with Bloom energy founder and CEO K.R. sridhar. His background's amazing. He's a former NASA scientist focused on delivering the power needed to drive AI and data center growth over again at Bloom Energy. That's this Friday on Brew Markets. But for now, let's take a break and when we come back, a spin through the headlines that are moving the markets today.

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Anne Bar (18:44)

Well, it's 4:00pm on the east coast,

Host/Market Reporter (18:45)

the markets have closed and we don't

Anne Bar (18:47)

have a ticker tape. So instead we'll throw it over to

Host/Market Reporter (18:49)

our human ticker, our producer John.

Mark Riepe (18:51)

That's right, the major indices all finished higher today with the S&P 500 up 8/10 of a percent hitting an all time high. The Dow was up 7.10of a percent for the day and the NASDAQ up 1% to 25,326 an all time high. And fueling those NASDAQ gains, Intel itself hitting an all time high for the day. Shares up 13%. That is following a Bloomberg report that intel may land Apple as a client for its chip manufacturing services in the United States. For over a decade, Apple has partnered with TSMC to produce its main processors. But Apple has been under pressure to consider additional suppliers as AI driven demand surges.

Host/Market Reporter (19:32)

So for context, intel has invested billions in its foundry unit and famously hasn't landed any major external clients for that foundry, at least to date. Well, according to people familiar with the matter, these discussions remain preliminary, but the market looks to be backing expectations that a deal will be reached. Shares of intel are up a whopping 430% over the past 12 months. Well, let's pivot now over to earnings as quarterly reports continue to pour in, keeping us fueled up on coffee as we wade through them, starting with Anheuser Busch InBev, the largest beer conglomerate in the world. The owner of Corona Stella Artois and Budweiser Ticker Bud saw its share price up 10% today. That was after reporting earnings that beat expectations. And that was despite a slowdown in global alcohol consumption. The company's CEO cheered the results, saying,

Anne Bar (20:27)

quote, cheers to beers. Love it.

Host/Market Reporter (20:29)

Nice bit of rhyming as total beer volumes ticked up 0.8%.

Mark Riepe (20:33)

Well, we were asking around the office today, what is a beer? I don't know exactly what beer is to which he's referring because the company is continuing to push into alcohol free beverages, expanding brands like Budweiser Zero and Michelob Ultra Zero. That no alcohol beer portfolio delivered 34% revenue growth in 2025. And for the most recent quarter, no alcohol beer revenue rose 27%. So it looks like the company is successfully catering to both drinkers and non drinkers who apparently just like the taste of beer. Shares of bud up 25% so far this year.

Host/Market Reporter (21:09)

And finally, Xbox's new CEO is shaking things up in Microsoft's gaming unit. In a memo to employees, Asha Sharma said Xbox is, quote, bringing in new leaders with consumer and technical expertise. We do not yet have four of those leaders, by the way, coming from the core AI groups. That's internal. From Microsoft's AI engineering home and incidentally, Sharma's former home base.

Mark Riepe (21:32)

And Sharma took over the role just back in February after longtime Xbox leader Phil Spencer retired following 38 years at the company. And Spencer joined Microsoft before Sharma was born. She's not yet even 38. And Microsoft's gaming division has now posted revenue declines in four of the past six quarters, putting pressure on a turnaround. And maybe the next generation can deliver people that are almost AI native shares of Microsoft finished the day flat.

Anne Bar (22:02)

Lots going on. We're going to keep on top of those earnings. Meanwhile, that's it for today's Brew Markets Daily.

Mark Riepe (22:07)

Brew Markets Daily is hosted by Anne Barry and produced by John Curto. Talk of Delatif, Avni Laroya and Emily Millard. Our technical director is Luis Farias, Jim Orzo is our audio engineer. And the president of Morning Brew Inc. Is Devin Emery.

Host/Market Reporter (22:20)

Wake up tomorrow with the Morning Brew newsletter and tune in to Neil and Toby on Morning Brew Daily to start your day.

Anne Bar (22:25)

We'll see you back here tomorrow.

Host/Market Reporter (22:27)

Same time, same place.

Bloomberg Narrator (22:38)

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