# At The Money: Investing in Freedom

An episode of [Masters in Business](https://invisiblenetwork.ai/podcast/730188152), 25 Mar 2026, 15 min.

Audio: https://podtrac.com/pts/redirect.mp3/traffic.omny.fm/d/clips/e73c998e-6e60-432f-8610-ae210140c5b1/4e4cd910-40a1-4619-a5f3-ae2b0012ffff/7a2f484b-156b-4a63-ba85-b418011378e6/audio.mp3?utm_source=Podcast&in_playlist=5873a3cb-298f-40bc-b71f-ae2b0013000d

The freest countries generate the best returns for investors. That is the thesis underlying the Freedom 100 EM Index ETF, and its proven itself over the past 1, 3, and 5 years. Perth Toll is the founder of the Life and Liberty indexes and the creator of the Freedom 100 EM Index (symbol FRDM). She was named one of 10 to watch in 2020 by Wealth Management Magazine and one of the 100 people transforming Business by Business Insider in 2021. Each week, “At the Money” discusses an important topic in money management. From portfolio construction to taxes and cutting down on fees, join Barry Ritholtz to learn the best ways to put your money to work. See omnystudio.com/listener for privacy information.

## Transcript

[0:02] Speaker 1: Bloomberg Audio Studios, podcasts, radio news.
[0:16] Speaker 2: I want to right for you. I want to I'm
[0:24] Speaker 2: Barry Ridoltson on today's edition of At the Money. We're
[0:28] Speaker 2: going to discuss how to avoid those countries that are
[0:32] Speaker 2: geopolitically dangerous to your wealth China, Russia, Saudi Arabia, Egypt,
[0:38] Speaker 2: and Turkey. To help us unpack all of this and
[0:41] Speaker 2: what it means for your portfolio, let's bring in Perth Toll.
[0:44] Speaker 2: She's the founder of Life and Liberty Indexes and creator
[0:48] Speaker 2: of the Freedom one hundred Emerging Market ETF stock symbol FRDM.
[0:54] Speaker 2: She was named one of ten people to Watch by
[0:56] Speaker 2: Wealth Management Magazine, one of one hundred people transform running
[1:00] Speaker 2: business by Business Insider. Her ETF, the Freedom one hundred
[1:05] Speaker 2: EM index manages over two billion dollars and has beaten
[1:10] Speaker 2: the SMP five hundred over one two and three years.
[1:13] Speaker 2: In twenty twenty five, FRDM was up sixty seven percent.
[1:18] Speaker 2: That's double the MSCI Emerging Market Index, which was up
[1:21] Speaker 2: about thirty three thirty four percent, which itself was double
[1:25] Speaker 2: the S and P five hundred, which was up seventeen
[1:28] Speaker 2: point nine percent. So Perth, before we get into the details,
[1:33] Speaker 2: remind us about the Freedom Index, what gets excluded and why.
[1:39] Speaker 3: Yeah, so, the Freedom Index is basically a freedom weighted
[1:42] Speaker 3: emerging markets strategy that uses third party quantitative freedom metrics
[1:48] Speaker 3: to weight countries instead of using market cap So, with
[1:52] Speaker 3: market capitalization weighted indices, you get a high weighting to autocracies,
[1:56] Speaker 3: and some of the world's biggest autocracies have a very
[1:59] Speaker 3: concentrated weight. With freedom waiting instead, you get a higher
[2:04] Speaker 3: concentration to the freest countries in the world, because we
[2:07] Speaker 3: believe that's where we're going to find the best growth stories.
[2:10] Speaker 2: Going forward makes sense. So I know, the index looks
[2:14] Speaker 2: at three broad categories to screen out different countries civil, political,
[2:20] Speaker 2: and economic concerns. Explain how you ended up on those
[2:24] Speaker 2: three items.
[2:27] Speaker 3: Yeah, so, we felt it was extremely important to encompass
[2:31] Speaker 3: all different kinds of freedoms, not just personal freedoms, not
[2:35] Speaker 3: just economic freedoms, because all freedoms work together. One of
[2:39] Speaker 3: the authors of the data set that we use has
[2:43] Speaker 3: said that freedoms work together like parts of an automobile.
[2:46] Speaker 3: You can't have the steering wheel without the transmission. The
[2:49] Speaker 3: car still won't run. So you have to have both
[2:52] Speaker 3: personal freedoms like civil and political freedoms, encompassing things like terrorism, torture, trafficking,
[2:57] Speaker 3: women's rights, freedom of speech, media expression, assembly of religion,
[3:03] Speaker 3: civil procedure, criminal procedure, judiciary independence, and things like that.
[3:07] Speaker 3: And also the economic freedoms that we're all more familiar
[3:10] Speaker 3: with as investors, things like taxation, rule of law, private
[3:13] Speaker 3: property rights, business regulations, soundness of monetary policy, and freedom
[3:18] Speaker 3: to trade internationally. So all of these things added together
[3:22] Speaker 3: give us a composite country score from our data think tanks,
[3:26] Speaker 3: the Cato Institute and the Fraser Institute, and we use
[3:28] Speaker 3: that composite score on the country level to derive our
[3:32] Speaker 3: country weights.
[3:33] Speaker 2: So I want to dig deeper into those three broad subjects.
[3:37] Speaker 2: But before we do, you know, there's been a lot
[3:39] Speaker 2: of pushback on ESG type investing and you know, morality
[3:45] Speaker 2: based investing. When I hear names like the Cato Institute
[3:49] Speaker 2: and the Frasier Institute, these are very conservative entities, not
[3:55] Speaker 2: the sort of groups you think of as oh, this
[3:58] Speaker 2: is just another woe way of moving money around. Investing
[4:02] Speaker 2: in freedom really is a fairly well defined way to
[4:08] Speaker 2: screen out risk bad players and increase risk, isn't it.
[4:14] Speaker 3: Yeah, So the Cato Institute and the Fraser Institute. I
[4:17] Speaker 3: don't know what you mean by very conservative, however these
[4:20] Speaker 3: are these are uh for example, the Free Frasier Institute
[4:25] Speaker 3: is UH known for their economic freedom data, the Cato
[4:28] Speaker 3: Institute more so for the personal freedom side of it,
[4:31] Speaker 3: more political freedoms and and uh civil civil freedoms. And
[4:35] Speaker 3: these are both entities that take no government grants, so
[4:39] Speaker 3: they don't take any grants from, you know, even the
[4:41] Speaker 3: US or the Canadian governments where they're based. That was
[4:44] Speaker 3: important to me because we all know the World Bank
[4:46] Speaker 3: debacle a few years ago where because they took money
[4:50] Speaker 3: from China and they, you know, under a Chinese coercion
[4:54] Speaker 3: changed some of their scoring. They had to actually scrap
[4:58] Speaker 3: a very useful index which we used, which was the
[5:01] Speaker 3: Doing Business Index. That is something that the community is
[5:05] Speaker 3: still trying to replace. And so this is something that
[5:09] Speaker 3: was important to me that they were independent from government coercion.
[5:13] Speaker 3: The other thing about them is one thing that I
[5:15] Speaker 3: noticed working with them all these years. And by the way,
[5:18] Speaker 3: we're completely independent from each other, so I have no
[5:21] Speaker 3: influence into their country scoring. They have no influence into
[5:24] Speaker 3: our country allocations. And it's it's you know, completely separate,
[5:29] Speaker 3: but having you know, had permission to use their data set,
[5:34] Speaker 3: having had some insight into how they work. One thing
[5:37] Speaker 3: that really impressed me was, you know, going into twenty sixteen,
[5:42] Speaker 3: going into kind of twenty twenty four, a lot of
[5:46] Speaker 3: the more conservative so called voices were kind of going
[5:51] Speaker 3: along with the political environment, whereas these guys never did,
[5:55] Speaker 3: and they called out the dangers of what they saw
[6:00] Speaker 3: in the American political situation from pre twenty sixteen. And
[6:06] Speaker 3: so this is this is a group that is extremely,
[6:10] Speaker 3: in my opinion, unbiased toward any government due to the fact,
[6:14] Speaker 3: partly due to the fact I'm sure that they are
[6:17] Speaker 3: completely privately funded and I've seen their kind of third
[6:23] Speaker 3: party independence firsthand through this work, this data set which
[6:27] Speaker 3: is completely third party for them, and also we're using
[6:31] Speaker 3: their third party measurements, so there's two layers third party
[6:35] Speaker 3: objectivity in there. So I've been really impressed with the
[6:37] Speaker 3: way that they've been very unbiased and very neutral and
[6:42] Speaker 3: very you know, i would say even centrist when it
[6:44] Speaker 3: comes to kind of looking at the government situation in
[6:48] Speaker 3: both the political situation in both the US and outside
[6:51] Speaker 3: of the US, and their commentary there so.
[6:53] Speaker 2: We'll talk a little bit about the US later. I
[6:56] Speaker 2: want to dive into these three broad subject matters that
[6:59] Speaker 2: drive the index, some of which seem a little obvious,
[7:03] Speaker 2: some of which not so much. Let's start with the
[7:07] Speaker 2: civil freedoms, where where you're looking at violent conflict, organized crime,
[7:13] Speaker 2: disappearance detainments, torture, terrorism, all those things sound like they're
[7:19] Speaker 2: not related to economics, but also seem to create a
[7:24] Speaker 2: terrible environment to do business.
[7:26] Speaker 3: Then yeah, I mean, if you can't walk down the
[7:29] Speaker 3: street without being concerned about being shot, then you can't
[7:33] Speaker 3: really be doing business. So and that's the idea there.
[7:36] Speaker 3: So if you want to use a kind of a
[7:40] Speaker 3: more colloquial way of looking at it, it's the right
[7:43] Speaker 3: to life, the right to liberty, and the rights to property.
[7:46] Speaker 3: So if you don't have life, we don't have anything else.
[7:49] Speaker 3: So that is the basis of all the other freedoms. Actually,
[7:52] Speaker 3: so the right to life, which I'm putting in the
[7:54] Speaker 3: civil freedoms category.
[7:56] Speaker 2: And now let's talk about political freedoms. Some of these
[8:00] Speaker 2: make a whole lot more sense. Rule of law, due process,
[8:07] Speaker 2: independent judiciary, multiple political parties, not single party rule, freedom
[8:13] Speaker 2: of the press, freedom of expression, how do all of
[8:17] Speaker 2: these things translate into better investment returns.
[8:22] Speaker 3: Yeah, so I'm going to focus on freedom of press
[8:24] Speaker 3: and expression for a moment here, and without freedom of
[8:27] Speaker 3: press or freedom of expression, there's no independent verification for
[8:33] Speaker 3: where any data, whether it comes from governments or whether
[8:37] Speaker 3: it comes from companies, whether any of that data is
[8:41] Speaker 3: accurate or complete. So you see in some of these
[8:44] Speaker 3: autocratic countries, they're not putting out data anymore. They're not
[8:48] Speaker 3: publishing some of their economic data because they don't want
[8:53] Speaker 3: that third party scrutiny from other countries, and in their
[8:56] Speaker 3: own countries they've already quashed it. So without third party
[9:00] Speaker 3: verification of data, which is what investors use to measure
[9:04] Speaker 3: the impact of their investments, you know, there's no way
[9:08] Speaker 3: to actually measure the true impact of your investments, or
[9:11] Speaker 3: whether you know your analysis of the investments is even correct.
[9:16] Speaker 2: Let's stay within political freedoms and talk about the rule
[9:19] Speaker 2: of law and an independent judiciary given the sanctity of contracts,
[9:26] Speaker 2: and how important it is to manage that. How significant
[9:30] Speaker 2: is an independent judiciary to the sort of index?
[9:36] Speaker 3: Yeah, so all the variables, there's eighty seven variables that
[9:41] Speaker 3: go into the country level composite score. An independent judiciary
[9:46] Speaker 3: is one of those, and it's just as important as
[9:49] Speaker 3: all the others. Like I said, you know, all the
[9:52] Speaker 3: freedoms work together like parts of an automobile. I would
[9:55] Speaker 3: say that, you know, it is of most importance, especially
[9:58] Speaker 3: in business, because if you don't know if your contracts
[10:02] Speaker 3: are going to be upheld, then how do you even
[10:06] Speaker 3: enter into tractual agreements? How do you even start that
[10:09] Speaker 3: business relationship? So that is extremely important, and also on
[10:13] Speaker 3: the you know, on the on the kind of more
[10:16] Speaker 3: extreme level of that, in emerging markets where there is
[10:21] Speaker 3: no independent judiciary, where there is no kind of rule
[10:25] Speaker 3: of law at play, anybody can be arrested, disappeared, or
[10:33] Speaker 3: you know, detained for any political reason that has nothing
[10:36] Speaker 3: to do with your actual business. So we saw this
[10:40] Speaker 3: when Jack mad disappeared again using China as a prime example,
[10:44] Speaker 3: because he said something the government didn't like at a
[10:46] Speaker 3: conference and then his you know, I pos got scrapped
[10:50] Speaker 3: and things like that. I think it's it's quieting down out,
[10:52] Speaker 3: but many other tyche entrepreneurs have disappeared since then. So
[10:57] Speaker 3: so in countries without rule of law, without judicial independence
[11:02] Speaker 3: and due process, you know, in China, ninety nine percent
[11:05] Speaker 3: of offenders are convicted.
[11:09] Speaker 2: That's a pretty substantial conviction rate, isn't it. Man. They
[11:12] Speaker 2: must have some great prosecutors of that.
[11:16] Speaker 3: So yeah, that's kind of like very basic fundamental things
[11:24] Speaker 3: that you need in order to conduct both life and
[11:26] Speaker 3: business that I think most of Wall Street overlooks.
[11:30] Speaker 2: So let's talk about the third leg of the stool,
[11:33] Speaker 2: economic freedoms. These include property rights, sound monetary policy, independent
[11:41] Speaker 2: central bank, free trade, business, credit and labor regulations, and
[11:47] Speaker 2: then the degree of government interference in private markets. All
[11:51] Speaker 2: of these are obviously so significant to operating a business
[11:57] Speaker 2: and investing in public glue trading companies tell us about
[12:02] Speaker 2: economic freedoms in the emerging market world.
[12:06] Speaker 3: Yeah, I think economic freedoms, of all the freedoms, get
[12:09] Speaker 3: kind of a bad rap because, you know, capitalism has
[12:12] Speaker 3: its critics, But if you don't have the freedom to
[12:17] Speaker 3: conduct business, if you don't have the freedom to you know,
[12:21] Speaker 3: use your own resources as you see fit to contribute
[12:26] Speaker 3: to the world, then you don't really have freedom. If
[12:30] Speaker 3: the government tells you what your occupation is to be,
[12:34] Speaker 3: or whether you can sell fruit on the street like
[12:37] Speaker 3: we saw in the Air of Spring, you know, whether
[12:40] Speaker 3: you can provide a living for your family. If you're
[12:43] Speaker 3: if you're dependent on the government to give you that
[12:46] Speaker 3: that fundamental right, then you're not really free. So without
[12:49] Speaker 3: economic freedom, you have no freedom. And then as far
[12:52] Speaker 3: as all the other things you mentioned in the economic freedom,
[12:55] Speaker 3: you know, data set, the private property rights, the you know,
[12:58] Speaker 3: free trade, soundness of monetary policy, you know, all of
[13:02] Speaker 3: those things are things that I think Wall Street has
[13:06] Speaker 3: traditionally taken for granted because we usually work in countries
[13:10] Speaker 3: that have all of these things already. So and that's how,
[13:14] Speaker 3: you know, we can be kind of myopic to the
[13:20] Speaker 3: freedom premium in emerging markets because in emerging markets these
[13:23] Speaker 3: things that cannot be taken for granted because not all
[13:25] Speaker 3: the emerging markets have them.
[13:27] Speaker 2: So how do you really think about the Freedom index?
[13:31] Speaker 2: Is it a value based fund, is it a risk
[13:34] Speaker 2: management tool or is this simply a pure return seeking strategy.
[13:40] Speaker 3: Ninety five plus percent of our clients, I would say,
[13:43] Speaker 3: are using it as a purely you know, freedom premium.
[13:47] Speaker 3: We believe that freedom freer countries will outperform in the
[13:51] Speaker 3: long run type of strategy. We do have some investors
[13:56] Speaker 3: who came in in the early days when ESGU was
[13:59] Speaker 3: a big thing and they have these ESG portfolios, but
[14:02] Speaker 3: I think that's that's going away a little bit. So
[14:06] Speaker 3: most of our clients do use this as a you know,
[14:08] Speaker 3: we believe it will outperform type of strategy. And of course,
[14:12] Speaker 3: you know, now after the outperformance that we've had in
[14:15] Speaker 3: the out of sample in the actual live performance of
[14:18] Speaker 3: the fund, most I think most people are using it
[14:22] Speaker 3: in that in that manner as their core emerging markets strategy.
[14:26] Speaker 2: So to wrap up, Hey, if you're a US or
[14:30] Speaker 2: Canadian based investor and you're interested in getting exposure to
[14:35] Speaker 2: emerging markets via an ETF, and you don't want a
[14:40] Speaker 2: funnel money to autocrats and dictators, and you want to
[14:44] Speaker 2: invest in the freest countries because it's a value based decision,
[14:50] Speaker 2: it's a risk management decision, or it simply has demonstrated
[14:54] Speaker 2: over the past few years to be a return seeking strategy.
[14:58] Speaker 2: Then take a look at the Freedom one hundred M
[15:01] Speaker 2: index ETF symbol f r DM. I'm Barry recalls you're
[15:07] Speaker 2: listening to Bloomberds at the money. I've got to recree

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