Gayed rejects the idea that policy-driven investing must permanently align with one political party. A Democratic administration could favor deregulation in areas such as alternative energy, causing the portfolio's sector exposure to shift with policy priorities.

Political parties favor different sectors
A change of administration can change the portfolio's holdings
Alternative energy could benefit under Democratic policy
The investment focus remains profitability rather than ideology

“I'd argue it's not because even under a democratic regime, there will be some sectors that will be deregulated the Democrats, like like alternative energy”
Michael Gayed · 08:12

“I don't view it as a political play.”
Michael Gayed · 09:04

#politics#policy#partisanship#alternative energy

Hot Take· 2

Hot Take02:52

Regulatory Friction May Explain Part of the US-Europe Gap

Gayed argues that technology alone does not explain why US markets have outperformed Europe. Lower regulatory friction may also support faster product launches and stronger corporate earnings in the United States.

Technology is not presented as the only source of US outperformance
Regulation can delay time to market
Compliance friction can reduce earnings
Cross-market performance may partly reflect regulatory differences

“It's not just because of tech.”
Michael Gayed · 03:03

“Regulation is a stopping point, is a friction that hurts earnings and time to market.”
Michael Gayed · 03:09

#regulation#europe#us markets#earnings

Hot Take09:17

The S&P 500 Is Becoming an AI Thematic Fund

Gayed argues that the S&P 500 is no longer the diversified reference point many investors assume it to be. Its concentration in large-cap growth, semiconductors, software, and AI makes it an imperfect benchmark for a value-tilted deregulation portfolio.

The S&P 500 is heavily influenced by AI-related companies
Large-cap growth concentration weakens diversification
FMKT has a value tilt
Benchmark choice should reflect investor objectives and journey

“The S and P, now, i'd argue, is an AI index.”
Michael Gayed · 09:56

“It's not about are you beating the SMP is it is? It's is this does it fit your your objectives from a risk return perspective?”
Michael Gayed · 10:40

#s&p 500#ai#benchmarks#diversification

Explainer· 2

Explainer06:09

Why Thematic Funds Use an 80% Portfolio Threshold

FMKT commits at least 80% of assets to companies expected to benefit from regulatory shifts because that threshold establishes the portfolio's stated theme. The remaining flexibility can include bitcoin, ethereum, or gold, although Gayed says every holding still has some direct or indirect deregulation rationale.

At least 80% of assets must support the stated theme
Up to 5% can be allocated to bitcoin and ethereum
Gold is also permitted
Every holding receives a deregulation-related justification

“In order to be considered a theme, you have to have that eighty percent threshold”
Michael Gayed · 07:06

“Some of it's direct, some of it's more indirect, but there's always a justification for why we're positioning in particular.”
Michael Gayed · 07:20

#etf rules#portfolio mandate#crypto#gold

Explainer10:55

Why Flying-Taxi Companies Depend on Deregulation

Archer and Joby illustrate how regulatory relief can affect emerging transportation markets. Their commercial prospects depend partly on FAA approvals, making aviation regulation a meaningful constraint on how quickly flying-taxi services can reach customers.

Archer and Joby are speculative portfolio positions
FAA rules affect commercialization timelines
Flying taxis require regulatory approval before scaling
Deregulation can influence speed to market

“Those are classic deregulation plays because of the focus around flying U taxis basically and derelation as far as the FAA side goes.”
Michael Gayed · 11:11

#flying taxis#faa#archer#joby

Story· 2

Story01:24

The Offhand Adviser Comment That Became FMKT

The Free Market ETF originated when one of Michael Gayed's adviser contacts casually suggested an investment strategy focused on deregulation. Gayed then assembled an advisory firm and two subadvisers, approaching the launch more like a collaborative venture than his previous funds.

The concept came from an adviser in Gayed's professional network
Gayed credited the adviser for the original idea
Three partner firms were brought into the launch
The collaborative structure differed from Gayed's earlier funds

“one of the advisers said to me, you know what, it would be a good investment ideas, you know, something that focuses on deregulation”
Michael Gayed · 01:35

“This I wanted to actually have partners on because it's a very different way of my style of investing”
Michael Gayed · 02:12

#fmkt#etfs#fund launch#entrepreneurship

Story14:39

How the Iran War Prompted a Defense-Sector Review

When war with Iran began, FMKT's managers met and considered adding defense companies. Their reasoning focused less on geopolitics itself and more on whether regulatory and contracting friction would be removed to accelerate delivery to government agencies.

The portfolio managers meet weekly
The war triggered a review of defense companies
Government procurement speed became the central question
Defense was not previously a major theme in the fund

“When the war took place, they said, all right, we gotta get some defense companies in here and then figure ou which defense companies benefit…”
Michael Gayed · 14:44

“I don't view free markets as a geopolitical play.”
Michael Gayed · 15:15

#defense#iran#government contracts#geopolitics

Takeaway· 1

Takeaway16:54

Why Deregulation May Take a Year to Reach Earnings

Executive orders do not instantly improve reported corporate performance. Gayed expects actions taken in one year to begin appearing in earnings later, potentially leading to a market rerating if investors have underpriced the eventual effect.

Policy implementation has a financial reporting lag
Prior-year executive orders may affect current-year earnings
Markets may be undervaluing deregulation's impact
A later rerating could accompany rotation away from AI concentration

“Derelation has a lag, right”
Michael Gayed · 17:01

“The market I think is still largely undervaluing the impact of deregulation.”
Michael Gayed · 17:09

#earnings#policy lag#market rerating#rotation

Frameworks in this episode

Policy-to-Profits Screening Workflow

Theme-Fit and Momentum Allocation Rule

Insights & moments

⚡Myth Buster· 1

A Deregulation Fund Does Not Have to Be a Republican Fund

◆Hot Take· 2