Operator: Your next question comes from the line of Alex Blostein with Goldman Sachs. Please go ahead. Alex, your line may be on mute. Your next question will come from the line of Craig Siegenthaler with Bank of America. Please go ahead.
Craig Siegenthaler: Good morning, Seth. Hope you and the team are doing well.
Seth Bernstein: Thank you, Craig.
Craig Siegenthaler: So I got a bond question for you. The Fed is still raising rates and this looks like it’s partially delaying the recovery and bond flows, although yours have been improving. So if the Fed needs to keep raising rates, how do you then think about the bond reallocation trend in the second half and any commentary across channel or product including tax force, munis and vehicle be helpful too?
Seth Bernstein: Okay. Thank you, Craig, for the question. In my view, we’re much closer to the end than to the beginning, of course, stating the obvious in the Fed’s cycle. And as Wednesday’s comments from Chair Powell, I think indicated. And so I do think people are increasingly confident we’re seeing interest not just from Asian on investors, Asian retail investors to begin to reallocate back, and it’s been pretty consistent for us for a while now. But we’re also seeing interestingly, public institutional demand as well and we’re seeing it even in the insurance pace where we see opportunities for them to extend duration and credit. But that being said, Craig, to your point, if we should have a nasty surprise with subsequent inflation readings and the Fed needs to continue raising that will put off that bonds are back by one or more quarters.
But actually just given the trends in the economic reporting that we’ve seen of late, it seems less likely that that’s the risk we’re facing. I guess one final point I’d raise, I may turn it over to Onur to add if he had some comments. We continue to see muni interest by U.S. retail much strong, not as strong as it was in the first quarter, but continues positive and strong for us, and performance is quite good there. And remember, we really haven’t seen as an industry strong muni demand for a long time. And I do think that continues because the thirst for income is really unquenchable.
Onur Erzan: Yes. Thanks, Seth. It’s Onur again. I’ll just add obviously market share gains matter. As Seth pointed out, we continue to gain market share in segments of fixed income, particularly tax exempt in U.S. retail. And our expansion of vehicles should only help that both on the different flavors of SMAs, particularly the customized SMAs and tax exempt that has strong distribution followership, as well as the growing range of ETFs, which are off to a very good start, as Seth mentioned in his remarks. So for instance, in fixed income, we expect to end the year with a larger number of fixed income ETFs, even greater than the three fixed income ETFs we have today. So that will help with the vehicle expansion as well.
Craig Siegenthaler: Thanks, Onur. For my follow-up, I just want to go a little deeper on the muni side because you are gaining lots of share there and industry flows are still a little negative, but you’re putting up really impressive organic growth. So what factors are really driving that delta and how sustainable do you think these share gains are into 2024?
Onur Erzan: Absolutely. So we believe we have structural strengths and advantages. This is supported by a number of factors, number one, we invested significantly in our fixed income technology all the way from trading onto the backend portfolio construction. So as a result, we believe we have a differentiated set of technologies that makes our SMA platform very competitive. On back of those technical capabilities and strength that’s recognized by the markets, we have been expanding our distribution relationships, not only in our traditional distribution partners in the national wires as well as regional broker dealers, but there’s definitely growing uptake from RIAs, which is definitely a high growth channel for us. And as I mentioned, adding more vehicles like ETFs will only accelerate that opening new doors in channels like RIA.
