Talk Your Book: Why Commodities Are Working

Today's Animal Spirits Talker book is brought to you by PIMCO. Go to PIMCO.com to learn more about the PIMCO Commodity Strategy Active ETF. That's ticker CMDT that we're going to be talking about today. PIMCO.com to learn more. Welcome to Animal Spirits, a show about markets, life, and investing. Join Michael Batnick and Ben Carlson as they talk about what they're reading, writing, and watching. All opinions expressed by Michael and Ben are solely their own opinion and do not reflect the opinion of Ritholtz Wealth Management. This podcast is for informational purposes only and should not be relied upon for any investment decisions. Clients of Ritholtz Wealth Management may maintain positions in the securities discussed in this podcast. Welcome to Animal Spirits with Michael and Ben. Michael, one of the things that I've written about a lot over the years is that commodities are not for investing. Commodities are for trend following. They're perfect for, because they have such a boom bust cycle and they can go years without working and doing pretty bad. And it's like when they work, they really work. So I think that trend following slash momentum indicators on these types of assets make a lot of sense to me. Thoughts? They are really working. Now it's working, right? Although I wonder how many people have gotten chopped up over the last few weeks with the volatility. They do lend themselves to that because, well, it's not to say there aren't underlying fundamentals because there is supply, demand, buying, selling, et cetera. But a lot of it, a lot of the supply and the demand is driven by the price and by the behavior of the buyers and the sellers. Did I just say a lot without saying anything? I think I might have. No, you're right. They say the cure for higher prices is higher prices and the cure for lower prices is lower prices. You're right. So we talked to Greg Sher now. He's a managing director and portfolio manager at PIMCO, their real assets team. And we talked about commodities and gold and everything around it. And he talked about how PIMCO, I think, is known as more of a macro type of portfolio management firm, right? But he talked about how they use momentum and trend in their commodity strategy. So this is an interesting talk. Here's our talk with Greg. Greg, welcome to the show. Thank you very much for having me. All right. Today, we're talking about the PIMCO Commodity Strategy Active Exchange Traded Fund, the ticker is CMDT. And I guess this is a sign of the times that we're talking to PIMCO and we're not talking bonds, we're talking commodities. So what is, let's start at a high level, what is the underlying or overlying? Hey, what's the difference between those two phrases? Either way, what are we talking about here? What's going on with this fund? Well, so this fund is a commodity investment where we look to gain exposure to a basket of commodities. Now, this fund is not married to any one index. The idea is it can invest in any commodity, whether it be part of the traditional commodity universe that the primary indices, such as the Bloomberg Commodity Index, invest in. Or it could be commodities outside with the goal of giving the investor's exposure to not only an asset class that is differentiated from most other things in their portfolio, but also provides inflation and geopolitical hedging. So this portfolio is focused on things like oil, natural gas, agriculture products, whether it be cattle or corn and soybeans and precious metals, gold, silver. They may have been in the news recently because they've had some very dramatic moves in addition to extraordinary rallies being one of the best asset classes the last six years, not just the last six months. And base metals as well. So it's a broad investing universe, but we're a fully active ETF. So do you have a bogey or a benchmark you're trying to hit? Because I know some of the benchmarks are different. Some of them have way more energy and oil exposure. Some of them have way more gold exposure. Do you have something that you're pegged to or are you pretty much kind of a go anywhere type of fund? We are a go anywhere fund. But that said, we are cognizant of the fact that our investors will ultimately hold us to some benchmark. We We can't just be out there on the range all entirely on our own. So Bloomberg Commodity Index, which is the largest index in terms of AUM tracking it, is the index that we think of ourselves as roughly benchmarked to. But when we assemble our own investments, we don't start off with saying, let's tilt our investments versus the index. We start off by saying, what's the best assets to own? And what offers the best return? In addition to that, because we have a momentum factor, We could be as little as 80% invested and up to 120% invested. The idea being when the markets are souring, hopefully we de-risk some. And conversely, when they're doing well, hopefully we can achieve an outcome that's aligned with the investor's hopes. So I'm looking at the website, and you've got a portfolio composition. And if I'm looking at the top 10, it's interesting. There's a lot going on in here. There's some CMOs. There's a mutual fund. There's some corporate bonds. There's some short-term bonds, it looks like. And then I scroll down and I see you've got – on the right-hand side, you've got commodity exposure as a percentage of the fund. We're recording this as of February 9th. And you've got energy, emissions, livestock, as you mentioned. But then you also show maturity distribution and interest rate and sector exposure. Are those like – do you have that in every instrument just because you're PIMCO and you're a bond shop? Or why are there maturity distributions if we're talking about commodities? Okay, so a few things. One, when you buy a commodity fund, a mutual fund, or you buy an ETF, for each $100 you invest, because you're buying futures, you get $100 of collateral. And what we do is we actively manage that collateral to try to improve upon basically earning SOFR. Basically, it's easy for PIMCO to include our funds in the broad investment process and try to add additional value there. In terms of duration, that's where we would get a duration or holdings. But also in the commodity space, we don't only own the front contracts. We want to own contracts that are out the curve. If, for example, they offer better roll yields. And some of our signals, for example, if you want to do momentum strategies in commodities, they work meaningfully better if you own a few months out rather than the very front. So we've designed our exposures to try to optimize for things like carry and momentum and other factors to try to improve upon the ultimate returns relative to the baseline index. So you have some implied leverage in here. So if you're trying to get to that 120% and all the momentum indicators are green, getting that extra leverage for you is not that difficult to do in this space. Correct, because we have tons of cash. Cash is not something we're short of. in a traditional commodity index, you know, if the initial margins and variable margins is like 10, 12% leaves you a lot of cash to remain to invest otherwise. So I want to talk about gold because that's the one that's been in the news a lot, obviously silver as well. But Michael and I were looking at this last week and in the 2020s alone, because gold has done so well, especially in the last couple of years, gold is up like 22% per year in the 2020s. It's been on a crazy run. and this is historically a boom-bust asset. Now, there's not a ton of history to go on with gold because it was pegged for all those years, but looking back to the 70s, you see these huge periods of really great returns and then these long decades of kind of subpar returns. Do you think that's still the case? Does the fact that gold has been up so much, does that worry you at all that we could see the other side of this? Or do you think that, no, there's still a lot of things going in the favor of gold right now? I mean, I grew up writing GSCI research when I did my first job on Wall Street for six years. And, you know, you have to be a student of history and recognize that up to that point in time, from the late 80s, the early 80s until the early 2000s, gold actually fell in nominal and real terms. So, you know, the history is replete with examples where particularly in other commodities where there are supply cycles and the supply cycle changes like post 2010 where the shale revolution really took off. We dramatically changed the supply outlook for oil and as a result we ended up having poor returns for quite a while And that the nature of commodities They do have cycles particularly on the supplies that you have to be quite attuned and aware of. But specifically on the gold, one of the things that differentiates today from many other periods in the past, certainly in the past 30 or 40 years, and particularly since when gold really became financialized, which is really when the ETFs came into the forefront, in like 2002 to 2004 kind of window and really democratize owning gold where you didn't just have to own coins or own bars, but you could do it through your Fidelity account or Vanguard account. You know, right now we're in a world where there's a changing global landscape where political and geopolitical considerations, in addition to inflation considerations, have driven an interest in emerging market and developed market countries that have like a historically, you know, big relationship with other emerging market countries have been looking to diversify, buy assets that actually help them in an inflationary environment, buy assets that for security reasons, you know, gold is still one of those that you can import onshore and it doesn't have risk of confiscation. I think the event after 2022, when the US and Europe froze and seized Russian assets, I think was like a pretty big watershed moment for a number of countries and a number of investors who were like, wow, we have to actually think about our security of assets as well as our general portfolio diversification considerations. And I think that's been a very powerful force. I understand that this is not a static portfolio, but when you're talking to investors and you're saying you should own this or consider this instead of the BCom or something similar, how do you differentiate what you're doing versus what you might get in an index that doesn't really change that much? Well, one, I think we can, because we're dynamic, because we have the ability to take 500 to 600 basis points on average tracking error, if you think we have a modicum of skill, I mean, even if we think it's better than a half a sharp, but let's just say it is just a half. If we're taking 500 basis points of deviation, it's 250 basis points of alpha on average over time. It's pretty meaningful on an asset that typically has, call it 15 to 18 vol. Now, if I think about our portfolio over the fullness of time since we've launched, or since we've had separate accounts that have been doing this at PIMCO, I think you can get about a 300 to 400 basis points better carry in the commodity portfolio. Like this pretty meaningful tilts that we think over time will end up generating a better return. Now, all the caveats are required, you know, in any given year, any given period of time, you know, that won't be guaranteed outperformance. But we think in the fullness of time, you know, the act of managing versus the ETF is very helpful. Versus the benchmark in an ETF is very helpful. The ETF is relatively new. You guys launched this in 2023, but I would imagine that there have been commodity strategies that you've run internally or in different wrappers at PIMCO. Yeah. So our first commodity mandate was 2000. Our mutual fund, our oldest mutual fund has been around since 2002. Our second mutual fund was launched in 2011. And we've been running separate accounts throughout this whole period of time. So all the strategies that you have in our ETF today have been in one form or another and all these products as part of our alpha. You know, not every strategy has existed for 15 years, but most of them have. And that's part of what I think that really gives us an edge over time is that we have a very long history of doing this. You know, being in the business for 24 years, 25 years. You mentioned the momentum indicators and commodities are a great place for that because of these boom-bust cycles, right? Like they tend to trend over time. I'm curious how much of your process is more like momentum slash trend following and how much of it is more macro? Because that's a lot of the things people talk about with commodities these days. You mentioned the fact that we're having this, you know, deglobalization and there's the debasement trade and government debt levels and all this stuff. And a lot of the macro indicators people point to for commodities. But how much does that fit into your plan versus just following the trends and what's going up? So momentum strategies amount to about 20 to 25% of our deviation from the benchmark. The rest of it actually has a lot of other versions of it, like carry, where we try to maximize the carry in the portfolio, both dynamically and on a static basis. And we have other behavioral strategies that are in there as well. We have seen something we have in the equity markets, which is if you look at the skew of the returns of an asset, when things tend to be right skewed, you tend to find there's a lot of ownership of it. And when things are left skewed, it tends to be heavily under-owned. And that applies in commodities as well. So there are many different factors that drive this. And it's not just a trend-following strategy at all. It is going to get you beta on the commodity markets. We're going to use momentum to help us with tilts. But we're going to use a total of four other factors as well to help us. Now, on the debasement trade, the thing we find interesting about the conversation is if you look at flows into treasuries, you look at flows into U.S. equity markets, you look at the stability in the 10 and 30 year, you know, yield curve, like the debasement trade is hard to really see. And if you scan out, you know, just 18 months on the dollar, the move has not been massive. But certainly it's crept up into the conversations about precious metals a lot. But that's hard to tease out because in a lot of other asset classes, you're not really seeing the impact of that idea just yet. So ultimately, when we think about commodities, we try to actually balance both the macro and the micros of each, recognizing that the more we can do in a systematic and back-tested and thoroughly vetted way, the better we're going to do over a long time. All right. So we've spent the first, I don't know, 10 minutes of this conversation talking about some of the things that you do a little bit differently, the history of PIMCO running these things. If you were to give a two-minute story to an investor about why you think real assets are working today and have been working for the past couple of months, because I agree, It's more complicated than just the dollar debasement. How do you tell the story or what story are investors telling themselves? Yeah, so a couple of things. If you look at the last six years, I'm going back before COVID, and you had the textbook reason why you wanted to own commodities in the portfolio was saying when there is an inflation cycle and inflation upswing and certainly inflation besting the current forecast of inflation. So like the inflation surprises, commodity tends to be the most effective hedge to a 60-40 portfolio, where if you have inflation surprising to the upside, you typically would expect to have negative returns from nominal assets, such as fixed income. And you'd also have equity markets tend to be weighed down, particularly if that leads to a Fed hiking cycle. And that's exactly what happened. If you look over the course of this decade, which includes the COVID, which was traumatically awful for commodities, commodities still end up being one of the best asset classes that you could have owned. MAG-7 is a really hard benchmark, but the S&P XMAG-7, the commodities have outperformed. Gold has been one of the best performing asset classes, even aligned with the MAG-7. So we've had a kind of a textbook example of inflation and the impact on portfolios, and commodities did what they were supposed to do. Now, the thing to also note about commodities, and this is really differentiated from other real assets, is a lot of people who want to own real estate or infrastructure or some of these private investments found themselves really long duration and a really highly illiquid asset. So in 2022, if you had real assets and you wanted to sell a real asset to buy, you know, equities as they were selling off or pivot into a fixed income portfolio and nominal assets, like commodities is one of the few places you could do that. And it's, you know, as an asset manager for me talking about like, oh, I want to be in an environment where people sell what I manage for them. But in some respects, it is a little bit of a diversification and an insurance tool. Now today I think one of the things that interesting is in 2000 I was part of the team that had sold or authored the Revenge of the Old Economy papers that kind of underpinned the last super cycle And the idea was supply side investments was inadequate as they currently stood in the late 90s to sustain and meet future demand growth. Now, at that time, we didn't understand or appreciate just how much the Chinese accession to the WTO was going to matter because they really dramatically changed the growth rates for a lot of commodities, metals, energy, everything. Today, when we sit there and say, look at the demand growth centers, they are AI, which is very commodity intensive. Energy transition, very commodity intensive. even if at the end of the day, we're going to hopefully produce cheaper molecules. The construction of a windmill and all these power plants are very commodity intensive, as well as the infrastructure to get them to deliver to the load pockets. In addition to that, we've seen a meaningful increase in military industrials, capex likely to come down the pipeline. And lastly, we definitely have a strategic competition in the world that is leading to investment in supply chains and supply chain redundancy. And even so far as, I'm going to use the word hoarding, but that's not exactly right, building up strategic stockpiles like we've announced for critical minerals in the United States. And China appears to have been doing in energy as well as in some metals, that there is a globe that is creating this artificial demand right now. And I'm calling it demand again. It's like it's storage, but it's acting as demand today to build resiliency in the system. And we've not really seen that in a long, long, long time. So in many respects, it has some of the same hallmarks as this, the 2000s, where companies are spending less money per free cash flow. They're being conservative with their growth and their growth capex at a time where we see a lot of pillars of demand that are strong. You know, near term, can I see copper retrace lower? Absolutely. I think it's gotten very frothy recently. Inventories are building. There are commodities that near term we think are very vulnerable. But long term, you know, if you can invest in new supply chains and you're going to have this demand growth accumulating over the years, you know, commodities are compelling and they present an inflation risk to your broad portfolios. I think one of the narratives over the years that people have thought is that like the diversification piece is that when stocks do bad, commodities do good. But this decade, we've seen both perform well concurrently. And I think that's because sometimes like the gold bug people are kind of paid with this brush of being, you know, negative all the time and perma bearish or whatever. And gold's going to win because the system fails. But I guess you'd have to look at this as a good thing because all the government spending is going to mean higher growth. Right. Even if inflation isn't going crazy now, maybe we've gone from a world of 2 percent inflation in 2010 to 3 percent today, which doesn't seem like a lot, but it is obviously in the grand scheme of things. and then you have the AI build-out. So is that the kind of situation where we can actually have both things do well, right? We can have commodities do well, plus the stock market do well, because we're going to have higher growth. I mean, I think that's what it has to be, the explanation. You know, we have real growth industries. Granted, they're highly levered to AI right now, and that is the concentration risk is definitely something that is concerning. But I think that's kind of, if I couldn't say that about the first three years of this decade, because I think that was a general supply shock. I think you are transitioning into something today where you could say there are real demand pillars. And you're looking at Japan, you're looking at Europe, you're looking at the US that has real fiscal stimulus in the pipeline, plus the strategic building of inventories to build resiliency. Like these are moments where you can kind of get strength and support on the economy that supports the equity market and supports the commodity markets. Now, I'm not gonna lie, When I see gold having a 10% one-day move, I get worried that a systemic asset is telling you that there's something kind of scary under the hood. There's risks out there, and we've seen a step up in volatility in the last week or two. I think that's likely to be an ongoing feature, but hopefully one we can navigate well. You don't get to choose when the Reddit players hop into these assets anymore, right? And they cause the volatility. I mean, that's what it seems like, at least, that just people are hopping onto these. But does the AI risk also, is it also part of the commodities complex? Like if they have to pull the CapEx back and some of these big players say, you know what, we're not seeing the ROI yet, we're pulling back. Is that a risk to the commodities as well? If the AI stocks sell off, will the commodities sell off as well, potentially? Well, I want to be careful to say if like the AI stocks sell off because it's a valuation change or they're not going to generate their ROI, but commodity investing, like overall, they're still building a lot. That's one thing. if it turns out that the AI build-out is just not going to happen, then yes, then both are susceptible for sure. But I could easily see a situation. I'm not an equity analyst. I'm not covering the AI companies. But if you do have a question about the ability for them to return money to investors and earn their ROI, yeah, you could see those valuations change. And typically what we've seen in commodities, if you ask anybody in the investing universe, and commodity guys are the most used to this, what happens when there's a massive surplus of capital that rushes into one asset or one corner of the market. We tend to have increased volatility and risks. But I can't say anything about AI in that context if we're going to be in that valuation trap. Greg, I'm curious to hear Pimpco's house view on this. Ben and I were talking today about the market, what happened last week, people rushing out of software because AI is going to disrupt the hell out of it. Obviously, everybody is guessing at this point who are going to be the winners, who are going to be the losers. So whatever, you just sell everything, re-rate them, and pick through the rubble after. Simultaneously, people are saying, hey, wait a minute, Microsoft, how much of your remaining performance obligations are coming from OpenAI? That sounds like a big number. We don't believe you. So they sell Microsoft, second biggest market cap decline in a single day of all time. Now, obviously, the numbers are bigger, but still, it was notable. And you also have the rush into the anti-AI trades, the real assets, not the commodity trades, but consumer staples and energy and materials. Every single material stock is beating the index this year. 95% of energy stocks are beating the index this year. So my read on this is like, listen, it's hard to get too bearish on the market because the CapEx spending is 1% of GDP. It's massive. We have inflation going in the right direction, sideways to down. I guess that's up for interpretation. And then you've got a new Fed chair coming in who's probably going to be accommodative to the market. And so like all of that said, it's hard to get too bearish. Okay. On the other hand, if I were to make a bearish case, it's what's happening in the market with the rush to staples and the real assets. that if you were to look back and this was like, you know, we're near a topic, that is late cycle behavior, right? Or so like, where do you, now this time is always different, right? So I don't know. It's a lot of mixed messages as always. The future is no clearer today than it was, you know, a year ago. But how do you see that, the late cycle debate? Well, if anything, we're thinking could be in a reacceleration of, you know, with the fiscal stimulus and you have some benefits of, of CapEx that you could end up in a situation where the cycle growth is actually improving. Um, and he may not be at the late cycle yet. And unfortunately for the last 25 or 30 years, we've seen a lot of times the late cycle become challenged by resource constraints. And maybe that's what the, that's what the equities are telling you on that side that like there's a real view that that might be a limiting regulator. And that becomes the inflation problem. Like that is possible. But given the vol in all these markets, you know, we could easily have a new narrative in six days. You know, we could have, I mean, we're susceptible to like, you know, a tweet here and, you know, another thing. So I do think we have a bit of a rotation because I think the commodities have been undervalued had underperformed for a long time Like we in a better position than they had been But it subject to change Volatility is very high. The one narrative that has made the most sense to me about gold is, as you mentioned, after the Ukraine-Russia war, all the central banks deciding, like, gold makes way more sense for us. So how much of the gold buying has been done by central banks? I mean, if you could ballpark it, I guess. And then how long do you expect this demand to last for? Is there a risk that all of a sudden these central banks say, all right, our coffers are filled, we're good for a while? Or is this something where they constantly need to refill and keep buying? Certainly, when you go back two or three years ago when they started, it was a very large share. I think the last six months, there's been much more retail participation. and we like talking to our colleagues around the world and they talk about the lines outside the gold coin and silver stores where you can buy coins and bars. People are trying to get the access to it. But certainly central banks have been a major impetus for why gold buying has been resilient. Now, the hard part is to know where the price sensitivity comes in. We've had a major rally up. I wouldn't be surprised if central banks pull back buying and then the first 15% retrace, you start seeing the activity increase again. But I do think the destination for a lot of them is to be able to hedge their economic and political vulnerabilities. And that's been a big driver because one day you could be aligned with the Western world order on foreign affairs in China, on economics, and then you end up having a major potential issue. And I feel like that's been a big driver of some of their interests. And to the standpoint, they want to diversify holdings away from treasuries. That may be a part of it, but we're still not seeing it really in a lot of the treasury data where we still see a lot of foreign interest to buy. That could change. That could change. But as of right now, that's the data points too. So how active is the portfolio? And how do you balance short-term versus long-term? So let's say you say you're all thinking, hey, precious metals are a secular winner. We think that the new bull market started whenever, and we think for reasons X, Y, and Z, it has room to run. We also think that silver has gone parabolic. And in the short term, that is probably an asset that we want to either lighten up on or maybe not put new money to work there. So how do you balance those two competing views to the extent that they even exist? Well, so it's primarily a quantitative strategy in the sense that we have a lot of our signals are going to run weekly. We have a weekly rebalance. Some strategies rebalance every week. Other ones get slowed down where we rebalance a portion of the portfolio over the course of four weeks so that we're not so reactive to short-term price movements. But in general, we are fully active and are rebalancing as the market signals change. Now, one of the traditional things that ends up happening is that if you have a rally like silver, your vols have gone up, your money, your percent of your portfolio has gone up because it's so vastly outperformed that it becomes a much higher risk asset. So like a momentum following strategy would actually be selling some of the rallies to like rebalance, you know, its risk factors. So, you know, in a given week, we could have a view that like silver buying is going to continue to come. But if we are managing to a risk target and we're managing to evolve, you have to be very careful without recognizing the fact that you have a lot more risk to the downside if you own it. Then you have to make sure that you're staying within the parameters that are reasonable for the portfolio. So that's how we approach it. We want to make sure we don't have any major concentration of risk. If someone owns us, they don't want to be a portfolio of silver. All of a sudden, we went from 20 vol to 100 vol. Like the person doesn't own the right thing. Are you actively rebalancing when you see a parabolic move like that? Well, we're actively rebalancing every week for sure. And we're managing our concentration of risks daily if we need to. So you have some sort of, like you said, do you have like volatility targets that you're looking for or asset allocation targets you're looking for if something gets really outside of the bands? Well, yeah, mostly because we have risk targets. So it's not just, if you don't do anything and your positions double, or at least a portion of your portfolio, you're going to become highly concentrated in that risk. So our strategies will reflect that. So we've spent most of the conversation talking about real assets, commodities, precious metals, not a ton on energy or agricultural commodities. Anything interesting happening on that side? Well, the agriculture space, despite the headlines regarding trying to trade deals, has largely driven by relatively good harvests over the last few years after a few years where weather volatility really degraded the global supply chain. In addition to that, the Russian invasion of Ukraine deteriorated Ukraine's ability for at least a year to continue to export its wheat supplies. So now they've been, generally speaking, falling over the last couple of years, in part because the harvests have been good and the supply risk have come down. Oil has been more interesting. of any of the commodities besides silver and gold, oil has some of the biggest geopolitical cross currents because what we're seeing is a bifurcation of markets. Because of all the sanctions, both directly on a country and extraterritorial sanctions, with the US and the help of some of its partners aggressively going after the shadow fleet of Russia and Iran, we're really seeing a world in which you have two separate markets. You have the market that is acceptable to be delivered into the Western Europe and U.S. And then you have another set of oil that's not. So we have the situation in the oil market where the tradable oils actually had a meaningful decline because politics has driven other oil to at times being tough to sell. So if you look at right now in the oil market, Russian supplies have built up by like 40 or 50 million barrels on water. We've seen them build up in Iranian supplies also. If that was deliverable to the market, we would have a more bearish outlook on oil because the oil, quote unquote, is there. But it's because it's not deliverable. You have a real bifurcation. And I think that's an outcropping of the growing sanction application in the US as used primarily, but also Europe following the invasion. And it's created a situation where like, you're not trading oil in general, you're trading specific types of oil in specific locations. It's part of the reason why the returns on oil have actually been pretty good, despite the fact that OPEC has been increasing supplies over the last six to nine months, which otherwise you would have expected to be depressing to the price. But we have two separate markets right now. For the first time in my career, I can really say after 27 years, this is a unique backdrop. All right. Last question. Not tax advice, but just at a high level, how do these futures contracts work? Like if we're going to consider investing in something like this, what do we need to be aware of? So this is not a K-1. So that actually is helpful. So there's no, you know, that is efficient. We use a Cayman fund to help improve tax efficiency and also make sure that the income is considered good. Beyond that, I don't know how to answer the question for your audience. So I may not actually, I might add, I'm definitely not the tax consultant in that sense. But as futures are always a mix of short-term and long-term, and that will show up as well. But this is not a K-1 investment opportunity. Okay, good stuff. Greg, for people that want to learn more about the strategy, where do we direct them? Well, the PIMCO website is a good place to look. That's PIMCO.ai? Well, there's AI built into it now to help you find us. but uh pimco.com will be the best search to go all right greg appreciate the time thank you thank you very much okay thank you to greg thank you also to pimco check out pimco.com to learn more about everything we talked about here check out the show notes for more