God Save America ETF: New fund will shun woke companies

Two US investment firms plan to launch a fund offering investors the chance to shun companies that emphasise ‘political activism and social agendas’ at the expense of shareholder returns. 

A 12 July filing with the US securities regulator reveals details of a new exchange traded fund, advised by Toroso Investments and sub-advised by Curran Financial Partners.

It aims to invest in companies ‘with a track record of creating American jobs and incurring capital expenditures within the US’.

If approved by the Securities and Exchange Commission, the God Save America ETF will list with the ticker ‘YALL’ and invest in a portfolio of 30 to 40 companies with a market cap of at least $1billion.

YALL will prioritise companies ‘with a track record of creating American jobs and incurring capital expenditures within the US’

The regulatory filing reveals little further detail about the ETF, which will invest across 11 sectors; energy, materials, industrials, consumer discretionary, consumer staples, health care, financials, information technology, real estate, communication services, and utilities.

There is not yet clarity on what fees YALL would charge, but it will be actively managed by Michael Venuto, Charles Ragauss and Adam Curran.

The filing comes at a time of a growing backlash against corporates’ focus on social, political or environmental issues.

It is not the first time an investment firm has attempted to cash in on ‘anti-woke’ sentiment, with offerings such as the The Point Bridge GOP Stock Tracker ETF (MAGA), which invests in companies that support the US Republican party, according to Bloomberg which first reported news of YALL’s listing.

A few years before that came the US-listed VICE ETF, which invested in so-called ‘sin stocks’ like tobacco, alcohol, gambling, pornography and guns.

However, investment offerings of this kind have often been met with muted investor appeal in the past.

‘These things are hard to sell as an investment,’ Eric Balchunas, Bloomberg Intelligence ETF analyst told news network. 

‘They’re probably overestimating how much people will actually move their investments into this. Even people who care a lot — people like cheap, they like liquid.’

Concerns about corporate’s non-business activity of this kind is not unique to the US.

Recently an HSBC banker was suspended for controversial comments about the investment industry’s growing focus on sustainability issues.

This week, Tory leadership contender Kemi Badenoch took aim at the likes of Unilever’s Ben & Jerry’s, which she said had a ‘main priority’ of ‘social justice, not productivity and profits’.

However, the vast majority of City firms maintain that environmental, social and governance – ESG – considerations are key when valuing a company, and understanding the risks and opportunities it faces.

Chief executive of the Association of Investment Companies Richard Stone recently called for greater regulatory oversite of ESG data in efforts to fight the ‘misallocation of investments, greenwashing and consumer harm’.

He said: ‘ESG is an increasingly important investment consideration for investors, but too many claims still do not stand up to scrutiny.

‘We have called for high standards so investors can clearly differentiate ESG funds from other investment products. We look forward to working with the FCA and the Treasury to ensure ESG data and ratings are robust and credible.’

This post first appeared on Dailymail.co.uk