Earlier this week, Subversive Capital Advisors rolled out two actively managed ETFs that base their investments on the financial disclosures of Democratic and Republican lawmakers as well as their families. The two funds have tickers designed to evoke the names of Democrat Nancy Pelosi and Republican Ted Cruz.
The Unusual Whales Subversive Democratic Trading ETF (NANC) and the Unusual Whales Subversive Republican Trading ETF (KRUZ) both launched on Cboe Global Markets on Tuesday with expense ratios of 0.75%.
Sitting members of Congress must disclose their investments in publicly traded companies due to the Stop Trading on Congressional Knowledge (STOCK) Act signed into law in April 2012. The fund’s manager trawls through these disclosures, known as period transaction reports, buying and selling securities in accordance with the trading actions of the congressional representatives associated with the fund’s targeted party. The manager may opt out of mimicking very small trades that represent less than 1% of the total portfolio, according to the prospectus.
As of Feb. 10, NANC’s top holdings include Microsoft Corp. (7.6%), Amazon.com Inc. (6.5%) and Alphabet Inc. (5.49%), while KRUZ’s top holdings include Magellan Midstream Partners (3.5%), Microsoft (2.6%) and Energy Transfer (2.2%). While NANC’s portfolio includes roughly 780 securities, KRUZ’s holds around 525, based on information posted on the issuer’s website.
PTRs don’t need to be filed until 30 days after the congressperson or their spouse has become aware of the transaction, and within 45 days of the date of the transaction, the fund document says.
These aren’t the first politically oriented ETFs to list on the U.S. markets, though the existing products have not gathered assets above $40 million. The American Conservative Values ETF (ACVF) is actively managed and excludes companies that are seen as being in opposition to conservative values, while the index-tracking Point Bridge America First ETF (MAGA) invests in companies in the S&P 500 index that support the Republican party via their corporate political action committees and employee donations.
Similar to MAGA, the Democratic Large Cap Core ETF (DEMZ) also tracks an index and invests in companies that make more than 75% of their political donations in support of Democratic causes and candidates.
In early trading on Friday, NANC was down 0.6%, while KRUZ was down 0.1%.
Subversive Capital has a lineup of six ETFs, none of which has gathered more than $1 million in assets under management.
Contact Heather Bell at firstname.lastname@example.org