Masters in Business: At The Money — Investing in Freedom
Host: Barry Ritholtz | Guest: Perth Tolle
Date: March 25, 2026

Episode Overview

In this episode, Barry Ritholtz dives into the concept of “investing in freedom” and how geopolitical factors and civil, political, and economic liberties impact both risk and return in emerging markets. His guest, Perth Tolle, is founder of Life and Liberty Indexes and the Freedom 100 Emerging Markets ETF (FRDM), an investment vehicle that screens countries based on freedom metrics rather than traditional market capitalization. Together, they discuss how investing in freer societies can benefit portfolios, offer risk mitigation, and potentially outperform traditional benchmarks.

Key Discussion Points

Introduction to the Freedom 100 Index (FRDM)

• ETF Background and Performance
  • Perth Tolle’s ETF, the Freedom 100 EM Index (FRDM), is built to avoid geopolitical risks associated with autocracies (02:07).
  • The ETF has significantly outperformed traditional indexes: Up 67% in 2025 compared to 33–34% for the MSCI EM and ~18% for the S&P 500 (02:07).

“Perth, before we get into the details, remind us about the Freedom Index. What gets excluded and, and why?"
— Barry Ritholtz [02:58]

• Freedom-Weighted Strategy vs. Market Cap
  • FRDM uses third-party quantitative freedom metrics from reputable think tanks to determine a country’s index weight — rather than market capitalization, which would overweight autocracies (03:22).
  • Freer countries get greater representation due to a belief in their superior growth stories (03:22).

Three Core Screening Categories

1. Civil Freedoms

• Definition & Relevance
  • Social stability, safety, and basic human rights are prioritized—violence, organized crime, terrorism, and disappearances impede both business operations and economic growth (08:36).
  • Civil freedoms are foundational: “If you don’t have life, you don’t have anything else.” (09:10)

“If you can't walk down the street without being concerned about being shot, then you can't really be doing business.”
— Perth Tolle [09:10]

2. Political Freedoms

• Elements Considered:

  • Rule of law, due process, independent judiciary, multi-party systems, freedom of the press/expression (09:39).

• Direct Business Impact

  • Without press freedom and transparency, investors lose access to reliable data for investment decisions. Some autocratic countries have concealed economic data to avoid scrutiny (10:05).
  • The guarantee of contracts and the ability to do business depends on judicial independence. In countries lacking this, business leaders and entrepreneurs (e.g., China’s Jack Ma) can be arbitrarily targeted, impeding innovation and investment (11:19).

"Without freedom of press or freedom of expression, there’s no independent verification...in some of these autocratic countries, they're not putting out data anymore..."
— Perth Tolle [10:05]

“In China, 99% of offenders are convicted.”
— Perth Tolle [12:48]

3. Economic Freedoms

• Key Components:
  • Property rights, sound monetary policy, independent central banks, free trade, business/labor regulations, limited government interference (13:13).
  • The right to conduct business freely is essential. If the state determines one’s occupation or allows arbitrary market interference (as in the Arab Spring), genuine freedom and entrepreneurial spirit are stifled (13:49).

"If you don’t have the freedom to conduct business...you don't really have freedom.”
— Perth Tolle [13:49]

• “Freedom Premium” in Emerging Markets
  • Tolle argues Wall Street takes these attributes for granted, but in many emerging markets, such freedoms are rare, creating notable variations in risk and opportunity (14:35).

Objectivity and Data Integrity

• Independence from Governments

  • The Freedom 100 Index leans on data from the Fraser Institute and Cato Institute, both of which do not accept government funding — critical for objectivity, especially after incidents where indices like the World Bank’s “Doing Business” became tainted due to coercion (05:57).

• Third-Party Validation

  • Separation between those producing freedom data and those constructing the index helps maintain credibility and neutrality (06:45).

"They called out the dangers of what they saw in the American political situation from pre-2016...this is a group that is extremely, in my opinion, unbiased toward any government..."
— Perth Tolle [07:32]

Addressing Pushback: Freedom Investing vs. ESG

• Tolle distinguishes "freedom investing" from standard ESG or “morality-based” strategies. By using transparent, rigorously-defined metrics, FRDM resists being pigeonholed as just another “woke” fund or one driven by political ideology (05:16).
• The freedom index is primarily a risk/return investment tool—most current investors use it purely for performance, not social alignment (15:10).

"95+% of our clients...are using it as a purely freedom premium. We believe that freer countries will outperform in the long run..."
— Perth Tolle [15:23]

Conclusion & Investor Takeaways

• For those seeking emerging markets exposure without supporting autocratic regimes, the FRDM ETF is positioned as both a moral choice and a well-supported, outperforming investment tool (16:10).
• Whether motivated by values, risk management, or performance, the Freedom 100 EM ETF offers an alternative to traditional EM investments—one that has proved its mettle over several years of live performance.

“If you're a US or Canadian based investor...and you don't want to funnel money to autocrats and dictators and you want to invest in the freest countries...Then take a look at the Freedom 100 EM Index ETF symbol FRDM.”
— Barry Ritholtz [16:10]

Notable Quotes & Moments

• Barry Ritholtz [02:07]: “...how to avoid those countries that are geopolitically dangerous to your wealth: China, Russia, Saudi Arabia, Egypt, and Turkey.”
• Perth Tolle [09:10]: “If you can't walk down the street without being concerned about being shot, then you can't really be doing business.”
• Perth Tolle [10:05]: “Without freedom of press or freedom of expression, there’s no independent verification for where any data...is accurate or complete.”
• Perth Tolle [12:48]: “In China, 99% of offenders are convicted.”
• Perth Tolle [13:49]: “If you don’t have the freedom to conduct business...you don't really have freedom.”
• Perth Tolle [15:23]: “95+% of our clients...are using it as a purely freedom premium.”

Essential Timestamps

• [02:07] – Episode opening & context for “Freedom Investing”
• [03:22] – Overview of FRDM & freedom weighting method
• [05:16] – ESG pushback & objectivity of data
• [08:36] – Civil freedoms and investment environment
• [09:39] – Political freedoms & rule of law
• [13:13] – Economic freedoms and market impacts
• [15:23] – How investors use the freedom index
• [16:10] – Summary of the ETF’s use case

This episode provides a thoughtful blueprint for incorporating civil, political, and economic freedoms into emerging market investment strategies—demonstrating how “investing in freedom” can yield not only moral satisfaction but also superior returns and risk management.