At The Money: Investing in Freedom

Summary of At The Money: Investing in Freedom

by Bloomberg

15m•March 25, 2026
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Overview of At The Money: Investing in Freedom

This episode of Bloomberg’s At The Money (host Barry Ritholtz) features Perth Toll, founder of Life & Liberty Indexes and creator of the Freedom 100 Emerging Markets ETF (ticker: FRDM). The interview explains the ETF’s freedom-weighted approach to emerging markets, how the index is constructed, why civil/political/economic freedoms matter for investment returns and risk, and recent performance and investor use-cases for the strategy.

Key takeaways

  • The Freedom 100 EM Index (FRDM) weights countries by composite “freedom” scores rather than market capitalization, favoring freer countries over large autocracies.
  • The index uses third‑party country-level data from sources such as the Cato Institute (personal/political freedoms) and the Fraser Institute (economic freedom).
  • “Freedom” is measured across three pillars: civil freedoms (life/liberty/property protections), political freedoms (rule of law, independent judiciary, press freedom), and economic freedoms (property rights, monetary policy, trade openness).
  • The strategy is presented primarily as a return-seeking, risk-management approach (“freedom premium”), not just a values/ESG play.
  • Fund highlights: Life & Liberty’s FRDM manages over $2 billion and outperformed peers — example: FRDM rose ~67% in 2025 vs. MSCI Emerging Markets ~33–34% and S&P 500 ~17.9% (period referenced in the episode).

How the Freedom Index works

  • Weighting method:
    • Uses composite country freedom scores to set country weights (not market-cap weighting). This reduces concentration in the largest autocratic markets.
  • Data sources:
    • Personal/political freedom metrics primarily from the Cato Institute.
    • Economic freedom metrics primarily from the Fraser Institute.
    • Both organizations are noted as independent and privately funded (the guest emphasized avoidance of government coercion in the data).
  • Composite scoring:
    • Approximately 87 individual variables feed the country-level composite score.
    • Scores combine civil, political, and economic variables to produce an overall freedom rank per country.

The three freedom pillars (why they matter for investing)

  • Civil freedoms:
    • Include security-related factors (violent conflict, organized crime, torture, trafficking).
    • Rationale: Personal safety and rule of law are foundational—without life and liberty, business activity and markets cannot function reliably.
  • Political freedoms:
    • Include freedom of the press, freedom of expression, judicial independence, multiple parties (no single-party rule).
    • Rationale: Independent media and political checks provide third‑party verification of data and protect investors from arbitrary intervention or data suppression.
  • Economic freedoms:
    • Include property rights, sound/independent monetary policy, openness to trade, business/regulatory environment.
    • Rationale: These determine whether businesses can operate, retain earnings, and have enforceable contracts—key to sustainable returns.

Why this differs from typical ESG or market-cap indexes

  • Not framed as “woke” or ideological: uses established, apolitical third‑party datasets (guest emphasized the Cato and Fraser Institutes’ independence).
  • Focus is practical: freedom metrics are presented as proxies for better institutions, lower political risk, and more reliable data — all of which support stronger long-term returns.
  • Objective: reduce concentration risk in large autocracies that dominate market-cap weighted EM indices and shift allocation toward freer emerging markets.

Performance and investor use cases

  • Performance example cited: FRDM up ~67% in 2025, which materially outpaced MSCI EM and the S&P 500 in the same period.
  • Typical investor usage:
    • ~95% of clients use FRDM as a core emerging markets allocation aimed at capturing a “freedom premium” (return-seeking plus risk mitigation).
    • A subset uses it as a value- or values-based ESG alternative.
  • Recommended audience: U.S. and Canadian investors seeking EM exposure without heavy allocation to autocratic regimes.

Notable quotes & insights

  • “Freedoms work together like parts of an automobile. You can’t have the steering wheel without the transmission.”
  • “Without freedom of the press or freedom of expression, there’s no independent verification for where any data…is accurate or complete.”
  • Practical framing: Freedom = rights to life, liberty, and property; without these, business and investment are fundamentally compromised.

Actionable next steps for investors

  • If you want EM exposure with institutional/rule-of-law tilt: review FRDM (ticker: FRDM) and its country exposures.
  • Check methodology details: review the specific composite scoring, included variables, and data vintage from Life & Liberty Indexes.
  • Compare to conventional EM benchmarks: assess historical return, volatility, concentration and sector exposure differences versus MSCI EM or other EM ETFs.
  • Consider allocation role: use as a core EM sleeve for return-seeking with political/institutional risk management, or as a complement to existing ESG holdings.

Limitations & risks (implied/important to consider)

  • Freedom-weighting shifts country exposure; this may increase concentration in some “freer” EMs and tilt sector/country risk versus market-cap indices.
  • Outperformance in recent years does not guarantee future results—political, economic and market conditions change.
  • Methodology depends on third-party indices that themselves have design choices and measurement limits; investors should review those sources.

Where to learn more

  • Look up the Freedom 100 Emerging Market Index/ETF (FRDM) and Life & Liberty Indexes’ methodology papers for the full country scoring and weighting rules.
  • Review the Cato Institute and Fraser Institute country data pages for the underlying freedom metrics.