The ongoing ETF insanity, which as of the end of August saw Vanguard fund inflows of $1.6 billion every day (or $100 million every single hour) has now boldly crossed over into the political arena, with the upcoming launch of the "MAGA" ETF, which hopes to "make America great again" by investing exclusively in companies that support the Republican Party, and Trump of course.
To keep it simple, the Point Bridge GOP Stock Tracker ETF will - as one would expect - list under the ticker “MAGA,” in reference to Trump's campaign slogan. In addition to MAGA, Hal Lambert, founder of Point Bridge, is planning a set of what it calls Politically Responsible Investing products. MAGA is expected to begin trading on September 7.
Unlike other ETFs which invest in specific industries, products, or factors, the ETF strategy will instead analyze the political contributions of the employees and the PACs of S&P companies. It will then pick the top 150 Republican stocks based on their contribution data for ETF inclusion. Lambert, a major Texas Republican fundraiser, refers to the approach as “politically responsible investing.”
Speaking to the Daily Caller, Lambert said that “corporations have been very active in political contributions and those effect the outcome of elections. Many are now becoming outwardly vocal in their attacks on President Trump and Republican policies to the detriment of their shareholders and the country. Investors need to support the companies that are supportive of President Trump and the Republican Party because that drives policy across the country.”
“How can a company that has a fiduciary duty to shareholders support candidates that want higher taxes on their company which ultimately harms their shareholders? Investors should have a way to say no thank you to companies that are actively against their interests.”
Lambert said that the top five Republican contributors in the past two election cycles were: AT&T, Marathon Petroleum, Home Depot, Exxon Mobil, and Altria. “All of those stocks will be in the ETF,” Lambert said. The launch of the fund comes as major corporations are increasingly getting involved in politics (just google GOOGLE).
Before rushing in, keep this in mind: one sector fund investors will miss is the one that has been the best performing YTD: tech. As of the most recent election cycle, the MAGA ETF will not have any large technology companies that are typically Democratic in their contributions, but Lambert maintains that with 150 stocks, it still contains plenty of industry diversity.
The fund, which is expected to list on the BATS exchange, has a rather generous annual expense ratio of 0.72%. Which is why investors may want to look to cheaper, knock-offs alternatives: according to Reuters, a rival group, Active Weighting Advisors LLC in Cape Girardeau, Missouri, plans a Republican Policies Fund and a Democratic Policies Fund listed under the tickers GOP and DEMS.
Is it unclear if there will be any correlation between the performance of the GOP or DEMS and the actual approval polling of either the Republican or Democrat party, although it is very clear that