Investors Vote No on Political ETFs

Investors Vote No on Political ETFs

The funds have failed to impress financial advisors.

Wealth Management Editor
Reviewed by: Staff
Edited by: James Rubin

Blending politics with investing might look good on paper, but in practice the idea has been mostly a bust.

Among the current crop of ETFs seeking to tap into political ideologies during this unprecedented election year, there are a few strong short-term performers, but inflows across the niche category have been weak.

The Unusual Whales Subversive Democratic Trading ETF (NANC), is up nearly 20% this year, which compares to a 16% gain by the S&P 500 Index. But NANC, an actively managed ETF that seeks to replicate the investing practices of Democratic members of congress and their spouses, has grown to just $135 million since its February 2023 debut.

 The political flipside of NANC, the Unusual Whales Subversive Republican Trading ETF (KRUZ), also debuted in February 2023 is up 8.8% but and has less than $25 million in AUM.

The Democratic Large Cap Core ETF (DEMZ) is up 17% this year and has $36 million in AUM, while the American Conservative Values ETF (ACVF) has climbed 13.6% year-to-date and has more than $96 million in AUM.

Political ETFs Fall Short With Advisors

Financial advisors, as the biggest buyers of ETFs, are generally not impressed with the niche because it leans too much on politics and not enough on sound investing principles.

“If you’re looking to support groups that represent your values, I have no problem with this, but if you’re looking for what’s best for your portfolio, I won’t be investing that way,” said Samuel Wagner, founder of WealthGuides in Indianapolis.

Miguel Gomez, founder of Sophronia Wealth Advisors in El Paso, Texas, agreed that the politics outweighs the investment value.

“These (political ETFs) may sound appealing on the surface, but looking deeper makes investing in these funds a no for me and my clients,” he said.

Matthew Tuttle, founder of Tuttle Capital Management in Greenwich, Conn., who is no stranger to niche ETFs, thinks the problem with political ETFs is they fail to go beyond the name when it comes to being unique.

“Any outperformance in these funds is more of a coincidence than it is a great investment strategy,” he said.

NANC, for example, holds nearly 750 individual securities and is benefitting from lopsided 14% weightings in Nvidia Corp. and 10% in Microsoft Corp.

Meanwhile, KRUZ’s largest weighting at 3% is JP Morgan, and Nvidia, the hottest stock in years, composes just 2.8% of the ETF.

“My feeling on this stuff is, if you’re going to launch an ETF you want there to be a viable investment case, not something that’s gimmicky, and not something that plays to your values,” Tuttle said. “Investing is about making money.”

Jeff Benjamin is the wealth management editor at, responsible for coverage related to the financial planning industry. This includes writing, hosting podcasts, webinars, video interviews and presenting at in-person events.

Jeff is a veteran journalist with more than 30 years’ experience covering the financial markets. He has won more than two dozen national and regional awards for his reporting. He most recently worked as a senior columnist at InvestmentNews where he wrote about investment products and strategies, as well as the broader financial planning industry. Prior to that, Jeff worked as an analyst at Cerulli Associates where he researched and wrote reports on the alternative investments industry. Jeff also worked as a money management reporter at Dow Jones Newswires, where he covered the mutual fund industry.

Based in North Carolina, Jeff is a former Marine and has a bachelor’s degree in journalism from Central Michigan University.