Episode summary
Freedom Has Paid Off For this Indie ETF | Trillions
Trillions
· · Hosts: Joel Weber, Eric Balchunas · Guests: Perth Tolle
Summary
Freedom 100 Emerging Markets ETF (FRDM) has surged because its rules-based screen has kept it in the freer parts of emerging markets and out of countries with weaker civil and economic liberties. Perth Tolle said the fund’s five-year run has been driven less by any single bet than by a sequence of strong country picks, including South Korea, Taiwan, Poland, and Chile, while avoiding Russia and China during major setbacks. She said country selection has accounted for about 83% to 84% of the strategy’s outperformance.
Tolle emphasized that the index methodology has barely changed since launch. It relies on third-party freedom metrics from the Cato Institute and Fraser Institute, uses no subjective overrides, and rebalances on schedule. She argued that the strategy is designed to be objective and repeatable, not a discretionary country call, even though its results have looked very active in practice.
The discussion also focused on why Tolle’s freedom framework may matter beyond EM. She said the U.S. still ranks relatively high, at 15 out of 165 on the Human Freedom Index, but noted concerns about declining scores from government interference and protectionist policies. She also said freer emerging markets tend to have stronger institutions, while oil-rich Middle East markets score poorly because of weak personal freedom.
Key takeaways
- Perth Tolle said FRDM’s outperformance has been driven mainly by country selection, which she estimated at 83% to 84% of returns.
- She said the fund avoided Russia before the war and China during its slowdown, while overweighting South Korea, Taiwan, Poland, and Chile.
- Tolle said the index methodology has not materially changed since launch, relying on Cato and Fraser freedom scores across 87 variables.
- She said the U.S. would not be excluded from the strategy, but its freedom score could decline if government interference in private markets persists.
- Tolle said freer emerging markets have shown stronger checks and balances, especially in places like Chile, Poland, and South Korea.
Notable quotes
“the strategy did deliver the, you know, the exposures to the freest countries in the emerging market space”
“we've made substantially no changes to the index methodology since the beginning”
“country selection would account for about 83 to 84% of the outperformance”
“it's hard to speak out against autocracies, right? I think I have a easier position for that just because I have actual experience in the country”
“freedom is an investment. It's not a trade”
How the episode opens
Welcome to Trillions. I'm Joel Weber — And I'm Eric Balchunis.
Eric, for the third time we're having Perth Toll on the podcast. She's the founder of the Life and Liberty Indexes and specifically the Freedom 100 Emerging Markets ETF. She was on the first time in 2019 when the ETF was new and she came back in 2022 to do a debate with Jeremy Schwarz Wisdomree about emerging markets and since either of those appearances she has been crushing it.
Her her ticker FRDM has been absolutely crushing it. What do you want to know about this ETF now that you didn't know before?
Perth has been interesting to me because a it's indie. I like indie stories. She lived it.
You know, a lot of this is about, you know, eliminating countries that are not free and buying the ones that are more free. And her experience as a young person in China affected all this. So, the story is really great.
And the indie, it's hard to get assets as an indie. You kind of need a shiny object moment, as we say all the time. Well, FRDM has got that moment right now.
I mean, I was on a podcast with Dave Ny called ETF Zoo, which is pretty good. It's a bunch of analysts arguing over stuff. And so FRDM came up and I I didn't realize how good it was doing.
Joel, here's the numbers. It's up 103% in the past 5 years. Emerging markets, let's we'll say measured by EM is up 20%.
So think about it. You're 5xing the thing that you're also investing within. It's not like, I don't know, some random crypto 5xing the S&P or something.
the her stocks and her countries are within EM. So in other words, she picked the right ones or the freedom story has just really played out in an intense way right now.
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- emerging markets etfs
- etf methodology
- freedom-based investing
- index providers
- performance comparison
Companies and tickers mentioned
- FRDM
- Life + Liberty Indexes
- Freedom 100 Emerging Markets ETF
Watch the episode
Watch “Freedom Has Paid Off For this Indie ETF | Trillions” on YouTube
Summary, takeaways and quote selection by Octagon. Quotes are short excerpts; the full conversation is in the episode.
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