-
An ETF that tracks the trades of Democrats in Congress has outperformed the S&P 500 since its launch last year, returning 30%.
-
The Unusual Whales Democratic ETF reflects how those individuals have been riding tech-industry momentum to further gains.
-
The fund’s biggest weightings include market standouts Microsoft, Amazon, Apple, and Nvidia.
An ETF that tracks the trades of Democrats in Congress and their spouses has outperformed the broader stock market since its launch last year.
The Unusual Whales Democratic ETF, which trades under the symbol “NANC” in a nod to former House Speaker Nancy Pelosi, has surged 30% since its launch on February 7, 2023. That compares to a gain of 24% for the S&P 500 over the same time period.
Looking underneath the hood of the ETF, it’s clear that an outsized bet on mega-cap tech stocks has driven much of the outperformance over the past year. Microsoft alone represents nearly 10% of the fund, and its top 10 holdings make up a highly concentrated 50% of the fund.
Other top tech holdings within the NANC ETF include Amazon, Apple, Nvidia, Salesforce, Alphabet. When combined with Microsoft, those six stocks comprise 32% of the fund’s total market value. Other major holdings include Crowdstrike and Netflix. The fund has a total of 719 stocks.
The lawmakers tracked by the fund own holdings in many of the same stocks most popular with hedge funds. Amazon, Microsoft, Alphabet, Nvidia, Apple, and Salesforce are among the top 10 most widely owned stocks amongst major firms, a recent Goldman Sachs analysis found. Both groups are trying to ride the continuing momentum of the market’s best-performing stocks.
Meanwhile, a Republican-focused fund with the same methodology has been underperforming the market. The Unusual Whales Republican ETF, which trades under the symbol “KRUZ,” has gained about 15% since inception. The comparison is reflected in the chart below.
Lawmakers trading stocks have come under intensifying scrutiny in recent years, as some members of Congress have made timely trades in stocks they could have theoretically influenced, or had access to sensitive information about.
One of the main selling points of the NANC ETF is that — if there is, in fact, a trading advantage being employed — tracking those investments could beat the market. But right now, it appears they’re employing the straightforward strategy of loading up on mega-cap tech winners.
Read the original article on Business Insider
