Exchange-traded fund (ETF) managers are jumping on the counter trend of politically oriented funds in a world abuzz with advocacy for ESG (environmental, social and governance) investing. In recent years, there have been ETFs traded under polarizing ticker symbols like “MAGA,” “GOP” and “DEMZ.” The latest to the game is called “YALL.”
New York-based Tidal ETF Trust is seeking to list an ETF named “God Bless America” under the ticker “YALL” on a national securities exchange, according to a filing with the U.S. Securities Exchange Commission on July 13.
The fund aims to track 30-40 companies with a market capitalization of at least $1 billion across about a dozen industrial and consumer sectors. It will favor “companies with a track record of creating American jobs” and exclude companies that “have emphasized political activism and social agendas at the expense of maximizing shareholder returns,” according to the filing.
Specifically, the fund will generally screen out companies that “make public statements about hot-button political items,” such as abortion rights, that are “unrelated to their business,” the filing said. A number of companies, including Disney, JPMorgan and Netflix, have announced plans to expand healthcare for employees seeking abortions in response to the Supreme Court’s overturn of Roe v. Wade ruling.
ETFs for both sides of the political spectrum
YALL will be advised by New York-based Toroso Investments and sub-advised by Curran Financial Partners, a South Carolina firm. A sub-advisor is usually hired by ETF managers to offer a specific style of investment—in this case, an anti-activism theme.
One of the most well-known political funds is the GOP Stock Tracker ETF, launched in 2017 by Point Bridge Capital with a goal to invest only in companies that “align with Republican political beliefs.” The fund is traded on Kansas’ BATS Global Markets exchange under the ticker “MAGA.” Its top holdings include L Brands, Apache Corp, Rollins, Inc., NextEra Energy, and Old Dominion Freight Line.
MAGA is down 10 percent in 2022, but is outperforming Dow Jones and S&P 500 indexes.
Also in 2017, ETF issuer EventShares launched two political funds, the Republican Policies ETF (“GOP”) and the Democratic Policies ETF (“DEMS”). Both funds were liquidated in early 2018.
On Election Day 2020, Reflection Asset Management launched a Democratic-themed fund called DEMZ Political Contributions ETF (“DEMZ”). The fund invests exclusively in companies that make at least three quarters of their contributions to Democratic campaigns and political action committees. It has a heavy exposure to the tech sector, with top holdings in Apple, Alphabet and IBM.