[Music] I'm Charlotte McLoud with investing news.com and here today with me is Andrew Channon CEO of procure ETFs which is the issuer of the fixed ETF thank you so much for joining me great to have you here thanks for having me great to be back really good to be speaking with you and we're going to go in a little bit of a different direction today than we usually go on our Channel but I think the topic is going to be of interest to our audience so just for some brief context the fixed ETF tracks companies


that are involved in natural disaster preparedness and recovery so we're going to go into what exactly that means in just a moment but to begin I thought you could just give me an idea of how this ETF began what was the thought process behind creating it so the concept of a natural disaster focused fund is something that's been on my mind for many years um as a student in University I was actually in New Orleans Louisiana uh during Hurricane Katrina and that has been something that's been been on my


mind since and when starting my first ETF company I was in New York City right as Hurricane Sandy came uh pushing its way through and the idea of creating a cial vehicle that invests in companies that help aid us and protect us and help us recover from natural disasters was something that was very near and dear to my heart and so you know many years of of research and and working to try to determine the types of companies Technologies Industries services that are related and critical to the theme of


natural disasters was something that um we have finally encapsulated into this concept of the fixt procure natural disaster recovery strategy ETF really interesting to hear that that personal connection there thanks for going over that I also want to get some background information on the cost of natural disasters so the fact sheet for the ETF had some stats that I thought were pretty eye openening so if you could just go into that and and tell me what that looks like yes so you know what we've seen over the last several


decades is that uh you know disasters are something that's not they're not going away and for many reasons um particularly just you the value of assets and properties that people possess um when natural disasters happen the costs become seemingly uh more more devastating from a financial toll um while fortunately we've been able to do some more things that have probably um lessen the the human toll of some of these disasters uh the financial toll seems to continuous ly be growing uh one


of the stats that I think is extremely interesting is about two aprils ago the White House came out with their own report believing that by the end of this Century the cost to the US federal budget from natural disasters and climate change alone could reach roughly two trillion dollar per year and when you start to extrapolate that out to what those costs would be for other countries around the planet as well as for individuals and for businesses um you know those numbers could potentially be significantly higher than just that


calculation to the US federal budget cost and so when looking at that um you know a theme that that uh that looks at companies that are helping us on the preparedness side um becomes very important and I think you the the same adage that you hear with healthc care and in other areas of uh you know an ounce of prevention is worth a pound of cure is something that seems to to really be true and what we've seen um for this F fund is a collection of companies that help before during and after natural disasters so really sing


looking at the full life cycle which are the the various areas that um you are currently what we deal with from natural disasters and when we look at potential costs and damages in the future um could be a way of looking at how to address uh you know investing in in this uh not even an emerging theme but one that seems to be U continuously uh growing as a risk for people and one that many people don't have um different Financial tools to to potentially be able to to hedge or get different exposures to this


theme so yes as you say this is absolutely massive and I'm sure there's many companies involved at those three stages so what I was hoping you could do is talk a little bit more about those three stages and maybe mention some of the funds top Holdings across each of those categories absolutely so when you look at the the preparedness side of the equation um typically you'll look at companies that are involved in Construction Consulting engineering so when a company is building out a massive


new facility when a municipality is building a new Convention Center or looking at its existing infrastructure um there's a lot of analysis that goes into um building out infrastructure these days that uh take into account you know certainly sustainability and and how eco-friendly they are but also realizing the real risks of potential natural disasters and you know back uh when people started developing on on the coastline here in the United States and Canada um you know many people would look at you know 10 years 20 years 50


years worth of historical uh flooding and sea level um issues and now they're saying maybe a hundred years is is more accurate so taking into these uh you know varying and and all different types of natural disasters and how you can better build to to take into account these potential risks so um some of these these companies would even be a company like in Nvidia um which which actually helps for uh modeling and looks at you know where potential natural disasters can come from how it might


affect certain areas so you know working with these various technology companies um you know a huge Construction Consulting engineering company like aeom which takes on you know massive construction builds for you know as a multinational company around the world and looks at some navigating some of these potential risks um then you get to the you know actual natural disasters themselves and um something that really impacted uh New York City as well as your native Canada was the Canadian wildfires that occurred this summer and


that's something that most Canadians are are pretty familiar with as as a seasonal type of natural disaster but the smoke effects reaching the Easter Seaboard of the United States States and New York City was something that many people weren't that familiar with and you have companies like a Babcock International which make the helicopters that are used for firefighting um and also training Personnel that can help tackle some of those during the disaster types of scenarios and then what happens


after the natural disaster passes well in some cases you have issues with um uh with dredging and you need to rebuild uh Dunes along the coastline which is something that um uh Great Lake Dred and dock actually helped assist New Jersey rebuild over a dozen miles worth of Coastline after Hurricane Sandy came through so you there's all different types of natural disasters or different types of things that you could do for preparedness front um different things that you can do during and certainly


rebuilding after natural disaster uh is very important and on kind of a more individual uh your consumer side you we also have those companies like Home Depot and Lowe's that consumers may go to to help you know rebuild their homes after a natural disaster has passed so um as you can see you know some of these companies might specialized for numerous types of natural disasters some may have you know even more singular focuses on specific types of events but um you know many of these companies are operating in


the United States and North America as well as multinationals and even foreign companies comprise this basket I think that was a really good overview of just the brand of companies that you're looking at and how many different Industries are involved in this so I wanted to ask are there any other criteria that you look at when you're adding ETFs or adding companies to the ETF yes so it's not a requirement but U many of these companies do have um or have had within the last five years


contracts with government agencies like a FEMA that specialize in helping with the Disaster Assistance and Recovery um or other foreign entities similar to a FEMA there's also ways for uh companies that help uh create things like backup energy sources such as a gener which helps um which which sells generators uh around the world uh and then um also water technology companies are something that have become very important so not only is it you know for monitoring purposes and transportation of water but


also uh you different Technologies to to make sure that you have clean water you know what one thing that many people don't consider is after U you know a hurricane um you the flooding can bring so much debris and uh you know companies that help uh purify the water or companies like a clean harbors which comes and it removes hazardous waste and toxic chemicals and things like that are companies that could be absolutely critical that many people don't necessarily think of initially when thinking of natural


disasters yeah I I would reiterate again many companies that you're mentioning that make sense but I wouldn't have thought of them initially so really interesting to hear about so the ETF launched all the way back in 2022 so definitely there's been some time to gauge its performance and it's actually up I think about 20% since Inception so definitely the trend is upward there I wanted to ask though have you seen it move up and down in conjunction with natural disasters is there any Trend


that you can Mark there um yeah I think it's going to vary depending on the types of natural disasters that we see um but you during its um you know the the short history of the fun going back to we had actually launched it on the the official start of Atlantic hurricane season two years ago so on on June 1st um we have seen you numerous natural disasters we've seen one of the most devastating earthquakes in in the last few decades occur across turkey and Syria we've seen um you tremendous amounts of wildfires we've


seen drought we've seen um you know we've seen the first you know uh major uh storm hit the Pacific Coast um just uh several months ago in Mexico and um some of these are you predictable some of them aren't um but the the one event that seemed to bring a lot of attention to these companies was actually the event of the Canadian wildfires um where we saw a tremendous amount of media coverage um but also uh on financial news networks um looking at the at at the the the impact U you and


actually telling people in real time kind of what they're going through what they need to do to prepare themselves and you know many of these natural disasters are only you a couple couple days where they get coverage um and financial news networks and uh the Canadian Wildfire seemed to be one that captured a lot of interest and you know possibly that that could be some of the reason that we saw an increase in demand for our fund at that time wow and unfortunately from what I hear it looks like we're probably


heading toward another bad Wildfire season coming up in 2024 one thing I wanted to ask ask you know it feels to me that natural disasters we hear more and more about them and it's just really in the media we're hearing the headlines all the time is there a trend toward we're actually seeing more of them or is that an illusion and it's more just you know the new cycle is is so much more present now yes so the way that many people try to track uh natural disasters over a time period is looking at what they call


billion dooll events so events that cost over a billion dollars in in Damages and that seems to be um kind of a pretty uh well covered topic there and um you know over the last several decades we've been seeing a tremendous many more of these events occurring and so you that's something that I think you know insurers look at heavily um and we've seen you new types of vehicles be um come about to try to address things like this um you know one one extent that I think has grown in popul ity have been catastrophe


bonds which are something that looks at you know natural disasters and trying to find ways of of funding to to better be prepared for these types of events and so I think there are potentially more tools um but then you have issues where you have uh you have certain insurers leaving states that are higher risk in flood areas and Wildfire areas and trying to carve out those specific areas because they are such high risk so um you know one of the reasons though as we mentioned why you're seeing you the high


dollar amounts associated with natural disasters in many cases can be attributed to just the increase of wealth of the global economy and you know you look at an area like South Florida and you've had tremendous amounts of Investments made second homes third homes uh you know tons of people moving there after natural or after um the the pandemic uh really started parking up in the United States and because you have so many assets and wealth that are now in these different areas that are at higher risk of natural


disasters when these events do occur it's not that surprising that you're having an increased um you know amount of Damages associated with a financial term okay yeah that does that makes a lot of sense the other thing I wanted to ask so as we mentioned the fund launch back in 2022 I'm curious about the amount of interest that you're seeing from investors if people are are looking at it and getting involved in it obviously I think that people will be able to see the proposition here but then there's


also the angle where you know you're essentially making money when bad things happen so I wonder if there's any hesitance connected to that that you see yeah it's tough to say you know I I don't believe that the the companies in here are are exploitive you know in the in the United States there are are very firm rules about um price gouging and you when you have natural disasters you aren't just allowed to just start jacking up the prices on things to take advantage of that uh situation um you


these are companies that are um and to the extent that people are viewing it as um you know cheering on bad things um I I think it's quite the opposite these are companies that should be championed they're the companies that are helping us prepare for you know these natural disasters they're helping us in the middle of natural disasters providing equipment and personnel and expertise to help us weather those storms and then they're helping us rebuild our lives after natural disasters so I really do


believe these champ these companies are ones that should be championed and not uh demonized or vilified because they play a critical role and you know for these companies to to have a strong standing to be well capitalized to be able to raise money as needed that's you know potentially going to help their ability to you know to weather storms as well and be there when we need them the most whether that's their ability to go out and invest in creating new facilities and factories to produce more


equipment for them to invest in technology to better help analyze uh for these types of uh you know pending threats um to the ENT that they're better positioned uh capitalized and and um and and you know strong standing in the capital markets um might actually help us so I think it's it's really important that these companies are are viewed in this light and not as ones that are necessarily opportunistic that said um you know for for someone that is going through a natural disaster if they


are invested in companies that are actually performing you hopefully that's you know some type of you know protection that that they may be able to you know receive if if that event does occur so you know we're looking at you know different tools that we could help provide investors to exposures that they might not be having and if you look at the Holdings of fixt uh there's very little overlap with other funds out there whether that be an infrastructure whether that be a climate change fund um


you know you have many people investing in you know ESG related strategies because they believe that they're going to make the world a better place this isn't build as an ESG fund or an ESG strategy um but this you know looks at the real world scenario you natural disasters do happen and these companies in many cases help us and you know I kind of look at it as when my house is six feet underwater I'm not going to be wishing that I put my money in a more uh carbon neutral bank I'm going to need


companies that are going to help rebuild my life and that's what I think a lot of these companies are doing for for peoples for communities um and for Nations great and you know I had that question in mind from before we started talking and I wanted to ask it but as you've been going through it with me what I'm seeing is a lot of the companies in the ETF are not this is not really their their main focus necessarily like a Home Depot has many other things going on and they just happen to be associated with this theme


as well so I imagine that's an element as well yeah in many cases um you know the these companies aren't singularly focused on natural disasters um you know you do have a company like MSA safety which helps um you know make the helmets that firefighters use a breathing appar apparatuses and things like that um but you know even on you know kind of an infrastructure front you know one you know where you have spending from governments that may happen whether or not you have a natural disaster but


certainly for rebuilding after a natural disaster um you know you need construction you know hard hats and helmets and things like that for um you know the individuals that are working on you know Building New Roads or rebuilding old roads um so sometimes you do have uh you know overlaps in some of the use cases for some of these companies in their products I think the one final point that I wanted to mention is many of the companies that you're mentioning they're involved in especially the ones involved


in construction and Industry these are also the types of companies that you might worry about when it comes to a recession and it doesn't seem like we've decided if we're going to have a recession or not in the US or elsewhere in 2024 but I know a lot of people have concerns about that so any comments that you would make on that note yeah you know to the extent that company are heavily relying on you know Municipal um you know spending um you know if the if if tax revenues are down uh you


governments have less money to be able to spend um you know a lot of this goes back to the ounce of cures worth the pound of prevention equation and um you know if you are going to build you know there are you know constantly um you know increasing in uh you know demands for what is a passible uh level or quality or um you know what Safeguard you have in place when doing new building projects so some of these companies that are already putting a name in for themselves as far as being you know a company that is able to look


at things like uh preparedness for natural disasters you know they might have a leg up on companies that aren't necessarily taking that next step to look at you know preparedness and sustainability so you know I think a lot of these companies are trying to put themselves in uh the best position to win these contracts that they can um and looking at you know the natural disaster risk and and profiles um is very important you know it's you kind similar like cyber security it's a very important industry um you know if you're


a company you need cyber security protection you don't know if you're ever going to have a breach but you know there may be a breach and you know there are many rules and regulations depending on what industry that you're in that you have to spend on some type of cyber security so um it's tough to say if there's any floor for these companies in a in a recession but when you are you know municipality and you're building a new road or you're trying to build hardened infrastructure things like that


you know many of these companies are providing solutions to to hopefully win some of those contracts very good points and that's that's everything that I have for you I think this has been a really good overview of the ETF but I'll put it back to you before I let you go and ask if there's any final thoughts that you would leave investors with you know I think this is a product that hasn't necessarily um gotten a ton of awareness so I really appreciate that you're putting this in front of your audience


there's a lot of overlap um with you know with many you know people focus on on the resource World which uh you know certainly a lot of your audience is um you know many people rely on you know governments or other bodies to help us when when disaster strikes I think a lot of people that look at resources and things like that um are a little bit more familiar with you know personal preparedness and I think you know you're the way that people invest the things that they do for their homes the you


know the things that they can do to prepare themselves um is really important I think there's a lot of interesting overlap and I really appreciate you putting this concept in front of your audience and if anyone has questions they can certainly visit our website pure.com and reach out to us and happy to answer any questions that they might have well perfect thank you so much for for going over this I can really see the overlap between the two industries so I hope that it does resonate with the


audience thank you again for being here thanks Charlotte of course and once again I'm Charlotte McLoud with investing news.com and this is founder [Music] Channon