ETFs in the White House? Ex-Soros CIO Eyed for Treasury

Donald Trump may be poised to appoint the first Treasury Secretary with experience in the ETF industry. 

Trump’s transition team is talking with Scott Bessent, Soros Fund Management's ex-investment chief and founder of hedge fund manager Key Square Group, according to Bloomberg News, which cited people familiar with the conversations. Key Square in August applied, along with Tema ETFs, to launch an exchange-traded fund with the ticker KALT. 

Treasury Secretaries are often pulled from the ranks of the financial industry; Steve Mnuchin, who ran the Treasury Department in Trump’s first term, worked for hedge funds and Goldman Sachs. At the same time, Janet Yellen, the current Secretary, is an economist from academia. An ETF veteran would be unprecedented, experts said.

“If this happens, Bessent could be the first-ever ETF issuer/Treasury Secretary,” Bloomberg ETF analyst Eric Balchunas tweeted. He wrote that the ETF should launch soon unless Bessent’s candidacy causes the firm to cancel the plan. 

Kudlow, Lighthizer, Lutnick

The Trump team is still talking with other possible candidates, news outlets said. They include Fox Business’s Larry Kudlow, former Trump U.S. trade representative Robert Lighthizer and Cantor Fitzgerald’s Howard Lutnick, co-chair of Trump's transition team. News reports said that hedge fund manager John Paulson has pulled his name from contention. 

Bessent recently shifted career directions. In August he left his post as chief investment officer at George Soros’s $30 billion office to set up Key Square with $2 billion in startup funds from Soros. Reports said he’s also taught at Yale University. 

The KALT ETF according to the prospectus, will, at the managers’ discretion, utilize any investment vehicle including stocks, bonds, commodities and currencies to “provide positive absolute returns regardless of market conditions.” It’ll employ “multiple alternative investment strategies.” While its expense ratio wasn’t disclosed, such investment strategies typically charge among the highest fees.