New 'Anti-Woke' ETF Targets Pro-ESG, DEI Companies

A new "anti-woke" ETF is set to launch in the first quarter of the new year, according to an unveiling from startup asset manager Azoria Partners on Thursday. The fund will invest in the S&P 500, but will specifically exclude companies that "use racial or gender quotas in hiring, promotions, or pay decisions." 

The new fund, called the Azoria 500 Meritocracy ETF, will trade under the ticker symbol SPXM. It's not clear specifically which companies will be excluded, but in a speech, Azoria Partners founder James Fishback stated three-dozen companies employ diversity, equity, and inclusion (DEI) strategies in their hiring decisions.

"The premise is simple: companies that hire and promote on skill and ability will outperform those that do so on race and gender," said Fishback during his remarks at President-elect Trump's Mar-a-Lago resort.

Azoria Names Starbucks as Target

In his speech, Fishback specifically took aim at Starbucks, calling the coffee chain a "great American company... that has sadly lost its way."

Azoria Partners says that companies using DEI underperform in the S&P 500, returning just 12% year-to-date. The S&P 500 is up over 27% so far this year.

"Over the past two years, the anti-merit bunch returned 17% compared to the S&P 500’s 60%," Fishback claimed. "And the return differential isn’t just driven by a few outliers: 72% of the stocks in the anti-meritocratic portfolio underperformed the S&P over both time horizons. The key takeaway is that the S&P 500 would fare even better without these anti-meritocratic companies holding them back."

Antiwoke ETF Extends on Anti-ESG Popularity

Azoria isn't the first asset manager to launch conservative ETFs. Anti-ESG ETFs have picked up in popularity over the past two years, as investors decide to invest in funds that align with their politically conservative values.

The Point Bridge America First ETF (MAGA), is a fund that invests in companies whose employees and political action committees (PACs) support Republican candidates. The fund is up nearly 24% so far this year, just slightly lagging the S&P 500. 

Another example is the American Conservative Values ETF (ACVF), a fund that "seeks to boycott as many companies hostile to conversative values as possible." Year-to-date, the ETF is up 27%.

Besides Starbucks, Fishback didn't name the other companies he believes uses race-based quotas in hiring decisions. In addition to outperforming "the plain-old S&P funds like the SPDR S&P 500 ETF Trust (SPY) and the Vanguard S&P 500 ETF (VOO) by cutting out the anti-meritocratic under-performers and laggards that hold back returns," Fishback also says the fund will seek to make "every company in the S&P 500 to become a meritocracy again."

"We’re going to make our case in the marketplace of ideas for why these companies should do just that," he added.

Azoria didn't reply to a request for comment by the time of publishing.