David Nicholas
Building an ETF Suite from a Wealth Practice
David Nicholas spent over 20 years as a financial advisor before launching Nicholas X Funds, building ETFs from the same options-driven strategies he used for private wealth clients. The idea started during COVID when clients kept asking for treasury exposure and Nicholas realized he could recreate what insurance companies do with their balance sheets, but in a liquid ETF wrapper. His first fund, FIX, attracted big institutional investors including a couple of foreign governments. His crypto fund BLKX (Blocks) blew past $200 million. Now he's scaling fast, going from three funds to nine, pouring revenue from existing products right back into new launches.
On this episode of Behind the Ticker, David walks Brad through the options engine that powers his entire product suite, the new silver and gold income ETFs, and why he's betting everything on this next wave of growth.
The Options Engine Under the Hood
The common thread across every X Funds product is a core asset paired with a defined-risk options overlay. But these aren't cookie-cutter covered call strategies. Nicholas is pretty blunt about why: covered call ETFs have rarely ever beaten the underlying. When the market rips higher, a short call caps your upside and you miss the move.
His solution is to lean heavily on short put spreads on equity positions where the team has high conviction. In a rising market, the equities go up, the put premium gets collected, and nothing caps the upside. The tradeoff is more downside exposure when things go south, because you're losing on both the puts and the equity positions. But Nicholas argues that if you believe markets go up over time, put spread strategies will outperform call strategies over any reasonable horizon because you're never leaving gains on the table.
FIX, the fixed income and annuity product, works differently. It holds treasuries as a base, then sells short spreads on HYG (the junk bond ETF) to harvest yield. All of that income goes into buying long index call options. If the S&P is negative over the option's term, the only thing at risk is the income from the HY spread. On top of that, there are monthly opportunistic sector trades, typically risking about half a percent each. Nicholas gave a live example: they were short XLP (consumer staples, which was overbought by RSI) and long XLU and XLF. The math is straightforward: treasuries yield 4%, and they only need 30 basis points per month of additional return to hit their target. That's 3.5% extra over 12 months, putting the total yield in the 7.5 to 8% range above treasuries.
SLVX: The Silver Income Play
The Nicholas Silver Income ETF (SLVX) splits roughly 50/50 between silver mining equities and actual silver spot exposure through ETFs like SLV, SIVR, and PSLV. Nicholas sees silver as a dual-demand metal: it acts as a monetary hedge like gold, but it's also an industrial input, which gives it a different demand profile.
The options overlay works differently on each sleeve. On the equity side (names like First Majestic, Pan American, Wheaton, Silver Corp, Fortuna), they sell put spreads at or below the money. If the stocks go up, they keep the full premium and capture all the upside. On the silver ETF side, they sell call spreads but also buy a long call above the spread. So if silver rips, they miss a small gap in the middle of the spread but capture everything above their long strike. The gold fund GLDX uses the exact same structure, just swapping gold companies and gold ETFs for the silver equivalents.
None of these funds track an index. They're fully active. The options strategy is actively managed, with the ability to switch from calls to puts, add or remove hedges, and adjust positions based on market conditions. Nicholas emphasized this is driven by the trade desk and management team, not a set-it-and-forget-it algorithm.
The NAV Decline Question
Nicholas addressed the criticism that option overlay income can mask NAV decline head-on. His distinction is important: there are two types of NAV decline. One is from overdistributing relative to what the fund earns. The other is the underlying assets going down in value. He's fine with the second kind and allergic to the first.
In Blocks, the options positions actually generate closer to 50% yield, but they distribute only 36%. They could declare 40 or 50% like some competitors, but that would drive NAV decline from overdistribution. At 36%, they have about an 80% success rate on their trades, which nets out to the distribution being sustainable. Since inception, Bitcoin has dropped roughly 20 to 30%, yet Blocks is roughly flat over the same period, meaning the strategy has meaningfully outperformed the underlying asset.
Crawl, Walk, Run
Nicholas is refreshingly honest about the business side. He's taking all the revenue from existing funds and pouring it back into the six new launches. He described his biggest challenge as marketing ETFs compliantly. You can have the best performance in your category, but if no one knows about the fund, it's an expensive business to run. The compliance "no stamp" finds its way onto plenty of marketing ideas.
Scaling means replacing himself. The first three funds had his fingerprints on everything from construction to design to marketing. Now it's about bringing on people who are smarter than him in specific areas to push beyond what his personal ceiling allows.
Key Takeaways
- X Funds uses put spread strategies rather than covered calls on equity sleeves, preserving full upside participation while generating income. The tradeoff is more downside exposure in falling markets.
- SLVX splits 50/50 between silver miners and silver spot exposure (via SLV, SIVR, PSLV), with different options strategies on each sleeve: put spreads on equities, call spreads plus long calls on the commodity side.
- Blocks generates about 50% yield from options but distributes only 36%, targeting an 80% success rate on trades and avoiding NAV erosion from overdistribution.
- FIX needs only 30 basis points per month of additional return from opportunistic trades to hit its 7.5 to 8% total yield target above treasuries.
- Nicholas is reinvesting all fund revenue into new launches, scaling from three to nine funds in a single year.
Listen to the full conversation on Spotify, Apple Podcasts, or YouTube.
Full Transcript
5,638 wordsMachine transcribed from Brad Roth's conversation with David Nicholas, with speakers identified automatically. Timestamps link to that moment on YouTube. Lightly cleaned, otherwise unedited.
Welcome to Behind the Ticker, the podcast where we go beyond the symbol and into the strategy. I'm Brad Roth, founder and chief investment officer at Thor Funds. And in each episode, I sit down with ETF managers, CIOs, and industry leaders to break down how these funds are actually built, how they behave in real markets, and how advisors use them in real portfolios. Most people just see a ticker symbol, but we know much more goes on behind the ticker.
Hey, David, welcome to the show.
Great to be here. Excited to be on the show. So before we get started, why don't you take just a little bit of your time, tell everybody a little bit about your background. If I did my research correctly, looks like you were a financial advisor for over 20 years, and now you're building out this suite of ETFs under X funds. So how'd you go from running a wealth management practice to now launching
ETFs? Yeah, it's a pretty interesting transition. Had a great career. I was 20 years financial advisor. We still have a private wealth firm that we run here in Atlanta. But yeah, it really started during COVID. My background, we did a lot of insurance-based strategies where if you look at the average insurance company's balance sheet, they are 90%, 95% fixed income. And then they take a little bit of the interest that they are on the fixed income, and they typically go long call options to get some upside exposure. So with FIX, which was our first fund, we thought, what if we could recreate what the insurance companies are doing, but do it in a liquid wrapper?
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And so if you know of fixed annuities, these are generally longer term contracts, five, eight, 10-year contracts. So the whole idea was like, hey, can we take that and make it liquid? And so we had clients asking for treasuries. We didn't really want to charge fees. So we came up with a way that we could create a product where we could hopefully get a little bit of a premium to treasuries and keep it in a liquid wrapper. So that was our first fund. It saw some success, and it's been great. We had some big institutional investors in that, a few foreign governments, which use some of their treasury allocation to invest in FIX. So it's been great. So that was our first fund. And then GIX was our second. Blox was our third crypto fund. And then we have four
More, I would say along the lines of Blox, four more fanatic funds, our silver, gold, defense, and nuclear fund. So really excited. And we have two additional funds coming out here shortly that are Bitcoin-based funds, our overnight fund, and a Bitcoin tail hedge fund. So lots of stuff. And I think we've got a few more that's in the lab right now that we're working on. So this is really exciting for us. And it's a big year of growth going from three funds to, within a month, we'll have, gosh, nine funds. So pretty exciting.
No, it is exciting. And I definitely want to get into the business and some of your products today specifically. But before we get, down to business, what do you like to do for fun? Any hobbies when you're not behind the desk or thinking about, the next new fund you're going to launch?
Yeah. I love being with my kids and my family. So it's for me, being a dad is just the best. Probably sounds cliche, but I grew up single mom, didn't have a dad around. And so I've always wanted to be just the best that I could be. So it's, again, it's balancing. There's a lot of work to do. And we work really hard here. But if I'm not here, I'm at home with my kids. So yeah, we love to travel. We love to, my son loves cars, fast cars. So, we love, going and looking at cars and racing cars and traveling together. really, it's if I'm not here, I'm with family. And, I try to read when I can, but it's usually early mornings.
But family travel pretty much sums it up.
Yeah. It's funny. Our sons are similar. He likes fast cars too. He always, he sits in the back of, sits in the back of my car and goes, go fast, daddy. And I don't know where he got the Southern draw, but anytime he's in the back, man, he just wants to go fast.
I love it. I love it. I know. I get all three, I have two girls and a boy and I can fit them in all my car and we just, we fly. And so they love it. Yeah. Yeah.
So let's talk about X funds. As you, as you noted, you started with FIAX back in 2022. And then you went to GIAX and then blocks, which is BLOX, which is just across a hundred million in assets. And so now you've just launched four new funds. As you said, we've got silver, gold, nuclear, and weapon at a very high level. What's the common thread across all of these funds?
Yeah. So, so BLOX actually, we are a little over 200 and just under 250 million, which has been unbelievable. I would say the common kind of thread between them all is really, it's this idea that you have a core asset and then you've got an option to overlay that can generate additional income. And so the, with the BLOX and the fourth thematic funds, what we really, I think we're the first to really do this is it's half commodity and then half companies that benefit from that commodity doing well. And so with BLOX, obviously it's, it's 40 to 50% Bitcoin and Ethereum. And then you've got the companies that benefit from the blockchain or crypto. For our silver fund, we have silver as the commodity, as, as the sleeve, but then we have the
Silver miners. So silver royalty companies, silver construction companies, same thing with gold, right? Gold as a, as a commodity, you have the ecosystem of gold. A weapon is a little unique in that the commodity are really is the rare earths. So it's all the rare earth materials that go into a lot of our defense sector that we need for ships and planes and ammunition and missiles. And then we balance that with our traditional defense companies. And then the same thing for our nuclear ETF as well, you have the commodity and then you actually have the nuclear industry company. So really unique. There really wasn't a lot of funds like that, really any funds that balance the both together, but then add the options overlay. And we want our
Options overlay to be additive, not detract. So, and it's the way we structure our options. We use spreads generally versus just straight covered calls or short puts. So it's really unique in that structure for the funds.
Yeah. We're going to get, we're going to get into that option overlay here in a second, but more of a business or philosophical question. you've launching, you launching four new funds and, you just mentioned to me, you're launching more pretty much simultaneously, right? Walk me through the decision to come out with four all at once. it's pretty ambitious, especially those of us who, are, are on the smaller side of the issuance, a smaller side of issuers. So can you just talk us through the business decision about, Hey, look, we're really passionate about this. We've seen some success. These are the right ones. Let's do it now.
Yeah. It's actually a really important question because we really launched one fund a year for the last three years. And so if you think about that, there's, yeah, there's a lot of work that goes into launching a fund. And, again, we don't have economies of scale, like a Vanguard or a BlackRock or a State Street that can list and launch funds, no issues whatsoever. So it takes a lot of, of carry to get these funds off the ground from a compliance perspective, marketing standpoint expense. So, right. I would tell you that it's actually because of our investors that have believed in us and invested in the funds. FIX, once we crossed over a hundred million, we got ready to start our second fund. GIX, we saw some early success on that as well.
So we started to launch our third fund. Blox immediately shot up to a hundred million almost overnight. So then we started moving the needle on our other funds. And so I think what we saw over the last three years is that if you put out a product that is unique and that has good performance, the AUM will fall. And so instead of delaying these out, we just said, you know what, and that this is, we're taking, I'm publicly sharing this, but I'm basically taking all of our revenue that we were getting off these funds, a majority of it, and pouring it back into these new six funds that are being launched. So again, it's me with a lot of faith saying, we're going to bet everything
On these funds as we go forward, not in a risky way, just in a, Hey, we're going to take what our investors have invested in us so far, use that revenue to go give them more value from a fund standpoint. And hopefully it'll be a success and it'll, and it'll build on itself.
Yeah, no, it's great. It's, it's conviction in yourself and your team and, and your, your product and, delayed gratification, I guess. Uh, because the idea there would be hopefully revenues are a lot bigger with more funds. And so let's talk about the option overlay. You just, you just touched on it a bit. It's really the engine across your entire suite, right? For somebody who might not be familiar, can you walk everybody through how the defined risk option strategy actually works and how it, how it generates income?
Yeah. So it's, it's really interesting in that we've got, uh, FIX is a little different, I would say than, than the other, uh, other six, seven funds in that it's, we really use some unique structures in that where we're doing a, um, a really risk defined trade. So in, in FIX, just quickly to, and I'll address the other ones, but in FIX is really new. We're actually using a high, we have a treasury underlay, but we're also, we're doing short spreads on HYG, which is a junk bond ETF. So we're generating the yield, we're, we're, we're harvesting the yield from our HYG spread. And then all of the yield that we capture from that spread, we go and buy a long index call options.
And so really what we're doing is if, if the SMP is negative over the, over the term of our expiration, all we really risked was the income that we generated from our HYG spread. And so it's actually a way to get a low risk exposure to the market. So we're actually paying for our, our long call exposure. So that's one element of it. And then we also do some either short calls or short put spreads, what we call opportunistic trades. So we may have monthlies on where we are, I think we are long XLU right now, long XLF, short XLP. So it's like, you've got the long index exposure going on in the background, but then you have these monthly kind of opportunistic trades that go on as well. So that keeping FIX separate, everything else is really unique in
That we generally are doing a structure where we're selling put spreads on our equity positions that we have high conviction in. And one of my challenges always been with cover call ETFs is cover call ETFs rarely ever beat the underlying. So if the market rips higher and you have a short call on, right, you're limiting your upside gain. Excuse me. So what we did is on the short put spreads is we can capture all of the upside without really capping our upside. And then on the ETF side is where we're selling our call spreads. So lower volatile assets, but the ability to earn some higher
Income as well. So you said something super interesting there, which is, I believe it's in the fixed income and annuity product about how you're actually long some asset classes, your short some asset classes, like, is that an active ongoing decision or is it just kind of part of the portfolio construction process? And if it is an active decision, like what is driving that decision?
What's the process there? Yeah. So with FIX is really unique. So you'll see like early on, we were doing a lot of opportunistic trades every month. We were doing an opportunistic trade and we have a lot of algos that we run. But what we found out was short term opportunistic trades, we really were lagging. It was just tough to beat the indexes, right? In a year like 2023 or 24, 20 markets were just shooting straight higher. And so what we decided to do is actually shift the strategy more recently is where we kind of have these three to six month long call exposure on. So we let the market do its thing. And then we're going to get broad exposure through all the ups and
Downs. Because what we found out was in April of 25, when we had the tariff issues, we had some options that were expiring right then, right? End of March, end of April. And it was just bad timing. And so to avoid that, we do these longer data, three to six month long call exposure to the indexes. And then right, we have these opportunistic trades where we have an algo that we run, but we also, I'll give you some of the simple stuff that everyone knows about, right? Like you can look at relative strength levels for a lot of these ETFs. And so like, if you look at XLP right now, XLP has just been on a tear, consumer staples. And why? Well, people are concerned about the economy slowing down, there's tech's
Been overvalued. So we've been buying staples. Well, if you look at it from an RSI standpoint, it's completely overbought. And so that would be one of the first areas that we look at. What's the strength overbought, oversold indicators for a certain sector? XLP is very overbought at this point. So that would be an example of a name that we have a short position on currently. And then a name like XLF, XLU are going to be names that if we have conviction on them, maybe they are oversold. So it makes sense to go ahead and do a short term trade on them. Or there's just a macro theme around interest rates or around growth that we think would benefit those sectors. So again, very opportunistic, but we're taking half a percent risk on each of those
Trades. So we have three of those trades on right now in FIX. They're all at half a percent risk each. One and a half percent max loss on all three of those. We don't want to lose on all three of those. But I can tell you, XLP is probably going to be down when XLU and XLF are up. And so we can actually kind of manage those trades where if we see one that's up, we may take profits early. But again, treasuries are yielding four. All we need is 30 basis points per month of additional return over a 12-month period. That's three and a half percent. So you're at seven and a half, eight percent of additional yield added over by the treasury. So it doesn't take a lot.
And we usually can do that with those opportunistic trades.
That makes a ton of sense. Thanks for going into that with me. But let's get back to, let's get to the topic at hand, which is these new funds you just launched. I couldn't, there couldn't be better timing to talk about your Nicholas Silver Income ETF SLVX. Walk me through the structure. From what I understand, you've got an equity sleeve with miners, the commodity sleeve with actual exposure, and then the option overlay on top. So how do these three pieces work together?
Yeah, I really like silver here. And I look at silver as like a dual demand metal. It can act as a hedge, a monetary hedge, but it's also an industrial input. So in that, that's a little bit different from gold, whereas gold generally acts as your hedge against geopolitical or monetary risk, where silver does have that industrial component. And so it participates in these precious metal cycles like we've seen in the last year, right? Whether it's rates, dollar, liquidity, geopolitical risk. But it really is a bet on where we think industrial growth is headed. And so I do think there's a lot of, we've already seen it, but I do think there's a use case for silver in the next three to five years that the market still is not fully pricing in. But
The way that we were structuring the portfolio, I can just give you from an allocation standpoint. So really what we have as a breakdown is, I can give you some of the weightings here as this pulls up. So about 50% of the portfolio just roughly is going to be our silver equity companies. So these are going to be, again, when you think about, I want exposure to silver, it's like we take the Warren Buffett approach. We want to own the whole silver ecospace. So 50% are going to be silver miners or silver industry companies. So these are going to be names like First Majestic, Pan American, Wheaton, Silver Corp, Fortuna. So that's your equity sleeve. And then the other 50% is going to be actual silver spot exposure through silver ETF. So like SLV,
SIBR, PSLV. So these are going to be where we're getting that actual silver exposure, marrying that with the equity positions, and then we're doing our options overlay. So we have a mandate where we can do call spreads, put spreads. But again, if we are bullish on a sector like silver, I don't want to cap my upside on the silver equity positions because the silver equity positions can act as a leveraged trade to the price of silver. And so really what we're doing on that side is we are selling put spreads on the equity positions. So again, we sell a put spread at the money or a little bit below the money. That position goes up in value. We capture all the premium from our put that we sold and we get the upside exposure of the stock. On the SLV positions,
We start out selling call spreads. So that does cap part of our upside on the actual spot price of silver. But we're buying a long call on that underlying ETF as well. So if it does rip, which we've seen silver rip, we're going to miss out on that little bit of a gap in the spread. But once it gets to our long strike, we're going to capture all the upside return from there. So again, half of the portfolio is the equities, half the portfolio is the actual SLV exposure, silver exposure. And then we have the options overlay working on each side. So we can hedge. So just like blocks, we can buy protective puts or protective put spread. We can sell calls on the equity positions if we feel like there's some downward movement on it. So we have some broad
Mandates between the two of the two buckets. That's what I was going to say, just listening to you talk. These are less, I would say, traditional index and option overlay products, because there is what it sounds like to me, a pretty heavy active component underlying here where you guys are actually in the portfolio making some decisions based on what's going on. It's not just a set it and forget it type product. Am I reading this right?
Yeah. So we don't track an index. So a lot of ETFs, which are great, and I actually think there's a lot of value in tracking an index. It's actually a well-established index. None of our ETFs are index trackers, meaning they're more passive. So they all are active funds. And so when you're buying a fund that's active, you're putting a lot of weight on the manager's ability to select positions and manage the fund. So yeah, option strategy is completely actively managed. We can put hedges on, take hedges off. We can switch from calls to puts at any moment. So it really is a lot of, it's driven by our trade
Desk and the management team. I love that. So you touched on the difference between silver and gold, silver having the industrial use case and the extreme high demand for it now, but you've also launched GLDN alongside, which is your gold cousin to silver. Is there a difference in approach? Is it basically the same type of fund just with different exposures? So you're just looking at a different
Area of the market. That's exactly right. So it's really just the exact same structure. So the build is exactly the same, right? Half gold companies and then half actual gold exposure. And then we do the options overlay. So it really just comes down to what is your base case on metals in that, or do you, do you want the more defensive hedge against monetary policy, which will be gold? If you continue to think that the price of gold will be supported and increase, which we do, that's going to positively impact miners. So if you look at the miners return over the price of gold, it's, there's certainly been outperformance. So you're going to capture it there. So yeah, same structure, same fund, just silver versus gold and the different use cases for each of
Those different asset classes. Yeah. One of the criticisms that I've, I've heard of option overlay strategies is that the income can mask what's really happening, the total return. the investor sees a big distribution, but the NAV, might continue to decline. It sounds like to me, I'm answering my own question is your ability to be active in some of these funds is how you're kind of managing that trade-off. Would I be right to assume that?
Yeah. So I would say that that is true for call spread products. If you're like, if a lot of the income is driven by the put spread strategy, which is, which ours is, there's really, let's just say you had a fund that was only put spreads. So you had the, you had the underlying position and then the put spreads in a rising market. If those underlying positions were going higher, the option strategy wouldn't mask anything, right? Because the equities are, positions are going up and you're not capping any of the upside, you're getting additional upside. So I think where, where there's a challenge is if you're in a rising market and you have a covered call income strategy. So it's, you're generating income, but you're not keeping up with the underlying
Positions that are in the portfolio. Where I think a strategy like ours is going to underperform, when you're selling put spreads, you're just going to have more volatility or you're going to have more downside exposure. So, if, if an asset class is down and you're selling put spreads, we're losing on our put spreads and we're losing on our equity positions as well. So I think it's just understanding that. But again, if you look at, or if you believe markets go up over time, which we know they do, and which I believe we may not go up every month or every year, but if you look at a three, five, 10 year track record, equity markets head higher. So it puts spread strategy generally is going to outperform a call strategy just because you're
Not capping that upside. But the NAV decline is to address really your question, I think is there's the distribution rate, which a fund can declare any distribution rate they want. Right. And so we could say, Hey, we're going to declare a 50% distribution, right? It may just be that these underlying positions go up 50% and we distributed the, the, the cap gains, we sold some of these positions, but I like to tie the distribution rate to exactly what the options yield is generating. So for example, in blocks, we're actually generating closer to 50% yield off of our options positions. We're distributing 30%, 36%. So we could declare tomorrow and there's some other crypto competitor funds that are 40, 50% yield. We could easily declare 40, 50% yield on blocks,
But the idea is that you're probably going to see some significant NAV decline because of that distribution with blocks. We distribute 36 because we know that gives us about an 80% success rate. If we're 80% successful on a 50% yield, that should be about a 70, 80%. It's going to get us close to that 36 to 40% yield that we're returning. So I just think overall is if you look at it, there's two types of NAV decline. There's NAV decline because you're distributing more than the fund is appreciating, or there's NAV decline that the fund is going down just because the underlying positions are going down like take blocks, right? I don't have the exact numbers in front of me, but since inception, the price of Bitcoin is down. I wish I had the exact numbers
In front of me, but the price of Bitcoin is down something like 20 to 30%. So the underlying position, a big core of it is down yet blocks is somewhat flat over that time period. So that would say, well, David, maybe we're down slightly. Well, is that NAV decline? I would say, well, no, we're outperforming the underlying and we're not distributing enough to where it's dragging the fund down. So long answer, probably a little winded, but I'm good with a NAV going down because the underlying positions are going down. I don't want a NAV to go down because the
Funds over-distributing. Yeah. Makes a ton of sense to me. I think the million dollar question here is who are these funds really designed for and how should an advisor think about using them? I know everybody's risk tolerance is different, but if you're sitting down with an advisor and they already have a well-diversified portfolio and you're selling into that advisor with your vast array of products, why don't we just stick with SLVX? Since that was kind of the ETF at hand, how would you explain to an advisor to use this and implement it into an overall portfolio design, model portfolio
Design? Yeah. So I think, again, some advisors have, I would say, gotten a slow start to using commodities inside of a portfolio. You have some advisors that just love it and you have some advisors that say, Hey, gold and silver is not really an investment. It's more of a, it's, it's a commodity that we don't really put clients in. So I would say if you're open, if you're an advisor, that's putting your clients in gold and silver, I still think Warren Buffett, like you asked Warren Buffett about gold, silver, Bitcoin, they don't touch it. He hated it. Obviously the price has done well, so it made for a good investment. But I think if you're telling a client, I'll use it for us as our private wealth firm, we had clients asking for Bitcoin.
And we're like, well, we can go out and just buy Bitcoin through an ETF. Or if I'm an advisor, do I just want the commodity? Or again, do I want exposure to the whole sector? And so I would think of it as like, don't just buy the commodity, buy the whole sector. And again, it's the picks and shovels approach, right? It's like, I want to own railroads. Great. So railroad is your commodity. Well, what about the companies that provide the shovels and that provide clearing of the land and the company that provides the railroad tracks, right? So I would look at it as like, if I want to own railroads, yeah, I want to sort of the railroad, but I want to really, really where you make your money is on the ancillary, the picks
And shovels approach. So I would say that this is the ultimate picks and shovels approach where we have the commodity, but then we have the picks and shovels, which really the picks and shovels actually could outperform the actual commodity over time.
Yeah. I would agree with that. So just listening to you today and our discussion, it sounds like to me, your firm is the definition of crawl, walk, run, right? You started with one fund, blocks was a big hit. And now you're in that run stage where you're launching a lot of funds right now. Just looking back, what are some of the hardest parts that you've had to go through building this business to kind of get it to where it is today? And how do you think about really scaling in the future now that you're going to have a really diversified suite of product here going forward?
Yeah, no, it's a great question. And I had to do this transition in our private wealth business where, when you start a business and it's, as it's tough to start a business and but so much relies on you. And so, in our private wealth space, I had to intentionally remove myself from a lot of areas so that we could grow, right? And I would say in the ETF space, our first three funds, they were, they had my fingerprints all over them from construction design to marketing to, strategy outlook. And while that's great, and they've done well, for us to grow and scale, it's just, it's replacing the things that I can do with people that are even
Smarter than me. And I think that's where we're at right now is like, we are bringing on and hiring people that just, they really, this is what they do. This is what their skills are at. This is where they excel. And they can really take us to a whole nother level. And so, yeah, so I would think it's this transition of where I have all the decision making is really driven by me to where we could, I can only, my ceiling is so much. And so as we grow, the only way we can keep up with the growth and push to growth is to bring other people on. But as far as like the challenges, I would say marketing an ETF is challenging in that one, just from a compliance standpoint.
So it's very tough to market an ETF. So it's like, how do you navigate trying to promote your fund, but also navigate that with the compliance requirements? And it's a lot. And so I would say that, I have some friends that have ETFs, right? They can have the best performance. Like they're beating everybody else on performance. They have the best track record. But if no one knows about the fund, it's expensive and it's an expensive asset and a business to have. And so just got to really be able to figure out creative ways to market the fund. And so, we've been grateful that our investors have heard about us. We've been able to promote it, but that's probably our biggest challenge is how do you talk about the fund in a
Compliant way? Yeah. The, uh, the no stamp from compliance seems to find its way, uh, on our desk as we, as we try to market or do certain things, which is fine. it's, it is a challenge, but it's also what kind of makes it a little bit fun too. Cause it's, it's, uh, it's difficult and hard things are fun, but David, I appreciate you spending time with me today. Before I let you go, where can people learn more about X funds and all your new products and everything here coming out?
Yeah. So you can go to our website, which is nicholasx.com. We've got a lot of great information on the website there. We've got pitch books, fact sheets, uh, holdings information. So just nicholasx.com or you can actually follow us on X as well. Our, our, our, our handle is just X funds underscore. So a lot, lots of those two places you can really get a lot of great information.
Great. Well, again, David, thanks so much time or thank you so much for your time today. Thanks for hanging out with me. Absolutely, man. Thanks for having me.
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