Kevin O’Leary is best known for his role on ABC’s “Shark Tank,” but few know he’s owned and operated an asset management business for years, and is an ETF issuer as well.
In a quest to better manage his family’s trust and assets, O’Leary has turned his attention to ETFs. His firm’s unique ETF offerings are rules-based noncap-weighted ETFs designed to preserve wealth.
Ahead of his keynote speech at the 10th Annual Inside ETFs conference in Hollywood, Florida on Jan. 24, O’Leary sat down with Inside ETFs’ John Swolfs to discuss the reasons behind his conversion to ETFs, his focus on balance sheets and why Inside ETFs is a must-attend for him.
Inside ETFs: In a crowded marketplace, what drew you to ETFs, and why did you feel the need to create your own?
Kevin O’Leary: Having had the challenge of managing a family trust with a simple mandate, I found over time—and this is really the essence of the ETF story—that active managers, while they're great, more often than not go flat or blow up and cause a heck of a lot of problems.
Inside ETFs: So why did you create your own ETFs, when there are nearly 2,000 options available?
O’Leary: We looked at all 49 ETFs in the market at the time that paid dividends. Almost all of them were market-cap-weighted and breached one of the trusts mandates.
We tasked FTSE Russell with building a new index that has a 5% max and a bunch of our rules in it. Those rules govern the family trust and are the basis of our ETF lineup.
Inside ETFs: At a quick glance, your ETFs appear to be a dividend-focused approach. Is that an accurate characterization?
O’Leary: No. What's different about a product like O’Shares is the concept. We focus on balance sheets and low volatility. At the end of the day, you're finding great long-term strategies, because, for me, this trust has to work for the next 100 years.
I’ll always want to own the best balance sheets. When people ask me about OUSA [O'Shares FTSE US Quality Dividend ETF] and why it works, it’s because you own the best balance sheets all of the time. I don’t think owning the best balance sheets will ever fall out of favor, regardless of what the market is doing.