- A data provider tracks the stocks trades of members of Congress
- An asset management firm created two ETFs tracking how Congress members invest
- The Democratic and Republican-focused ETFs have had much different results
If you ever wanted to know what stocks Congress members invest in, there’s an ETF for that.
With more than 3,000 different exchange traded funds (ETFs) in the U.S. alone, investors can find an ETF for just about anything.
There are even some ETFs that track what members of Congress are investing in, thanks to a database called Unusual Whales.
Unusual Whales is a data provider that tracks what elected officials are investing in through public disclosures, made possible by the Stop Trading on Congressional Knowledge, or STOCK, Act. It also follows the investments of notable figures like Jim Cramer of CNBC, Keith Gill, aka “Roaring Kitty,” and David Portnoy of Barstool Sports.
An asset management firm called Subversive uses that data to create two ETFs — one focused on the portfolios of Democrats in Congress, and one focused on the investments of Republicans.
One is beating the other by a wide margin. Let’s take a look.
Subversive Unusual Whales Democratic ETF
Launched in February of 2023, the Unusual Whales Subversive Democratic Trading ETF (NYSE:NANC) invests in stocks purchased or sold by Democratic members of Congress or their spouses. This includes U.S. Rep. Nancy Pelosi (D-CA), whose husband Paul Pelosi owns a venture capital firm and who the ticker, NANC, refers to.
The ETF is heavily invested in big tech, as its largest holdings are NVIDIA (NASDAQ:NVDA), which makes up 13.2% of the portfolio, followed by Microsoft (NASDAQ:MSFT) at 9.2%. Other top 10 holdings are Apple (NASDAQ:AAPL), Amazon (NASDAQ:AMZN), Alphabet (NASDAQ:GOOGL) (NASDAQ:GOOG), Salesforce (NYSE:NYSE:CRM), CrowdStrike Holdings (NASDAQ:CRWD), and Netflix (NASDAQ:NFLX).
Overall, it currently holds about 750 stocks, including all of the stocks that Democrats and their families invest in. It is actively managed, based on the trades made by Congress members, and weighted using a proprietary system that weighs stocks by how much assets Congress has invested in them. Roughly 54% of the assets are in the top 10 holdings.
It is trading at $37 per share and has an expense ratio of 0.75%.
The ETF has a short track record, but has performed well, beating the S&P 500 with a one-year return of 32% as of June 30, compared to 25% for the benchmark. Year-to-date as of July 10 it has returned 23%, beating the S&P 500’s 17% gain YTD.
Subversive Unusual Whales Republican ETF
The Unusual Whales Subversive Republican Trading ETF (NYSE:KRUZ) is similar to its Democratic counterpart, except that it invests in only the trades made by Republican members of Congress and their families. The ticker likely refers to U.S. Sen. Ted Cruz (R-TX), whose trades this ETF includes, among others.
As one might guess, the Republican portfolio is much more conservative, including a lot of stable, value-oriented stocks among its largest holdings.
The biggest position is in JPMorgan Chase (NYSE:NYSE:JPM), but at only 3.3% of the total assets. NVIDIA is second at 2.9% and Comfort Systems (NYSE:FIX), an HVAC company, at 2.5%. Other top 10 holdings include United Therapeutics (NASDAQ:UTHR), Intel (NASDAQ:INTC), Arista Networks (NYSE:ANET), Elevance Health Inc (NYSE:ELV), National Fuel Gas Company (NYSE:NFG), Texas Instruments (NASDAQ:TXN), and Shell (NYSE:LON:SHEL).
There are fewer stocks in this portfolio, with roughly 490 positions at present, but it is more diversified with only 20% of the assets in the top 10 holdings.
As one might expect, looking at the holdings and knowing the market we’re in, the Republican ETF has underperformed. The ETF is trading at about $30 per share and is up about 19% over the past one-year period through June 30. Year-to-date it has returned 12% as of July 10.
In both cases it has underperformed the S&P 500 and the Democratic ETF. It also has a higher expense ratio at 0.83%.
Which is the better ETF?
It should be noted that this is just a one-year sample, as both funds were launched last year. But so far, the Unusual Whales Democratic ETF has done a better job of taking advantage of the bull market, loading up on tech and AI stocks.
That’s not to say the Republican ETF won’t be better in the long run, as it should be less volatile and not react as much to market fluctuations. Only time will tell.
Are either of these ETFs a good buy? It is hard to say with only a one-year track record, but growth investors may flock to the Democratic ETF while value investors may prefer the Republican ETF.