According to a new report commissioned by IFM Investors, Australian pension fund investment in the US is expected to soar over the next decade – from US$400 billion to more than US$1 trillion ($1.6 trillion).
As a delegation of Australian super funds returns from a contentious trip to the US, it’s been noted that by 2035 the lion’s share of this (86 per cent) will be invested in US public markets (see graphic below).
With the US investment landscape being dramatically reshaped by President Donald Trump’s worldview, what approaches should asset owners take to obtain strong returns?
Perhaps they need to ensure their US portfolios have sufficient exposure to the rapidly emerging anti-ESG, anti-woke, anti-climate, anti-diversity, equity and inclusion (DEI), pro-patriot and American-first investment themes.
They could also consider replicating the stock trading patterns of Republican — and Democrat — members of Congress who may have the ‘inside oil’ when it comes to company announcements.
Fortunately, there are growing number of exchange-traded funds (ETFs) — or, in some cases, more accurately WTFs — that can help here (see list below).
Azoria 500 Meritocracy
Azoria Partners’ SPXM ETF, which has been launched by one of Trump’s Make America Great Again (MAGA) mates James Fishback (see photo below), will only invest in companies that don’t have diversity, equity and inclusion (DEI) initiatives.
SPXM will mirror the S&P 500 index — but exclude three dozen companies that dare to use DEI quotas in hiring or promotions.
These companies include Starbucks (despite the company recently rebranding its “Inclusion, Diversity and Belonging” initiatives to the safer “Belonging at Starbucks”), Best Buy and United Rentals.
Fishback explains that in recent years “many American companies have been infected by a new orthodoxy that rejects the time-tested principle of meritocracy and instead embraces something new and toxic: hiring based on race and gender”.
Such hiring quotas “are no way to run a business in America. They betray merit, reject the values that made America great, and pervert sound business practices”, according to Fishback.
Azoria claims that “year to date, a portfolio of these three-dozen anti-meritocratic companies has returned just 12 per cent, compared to the S&P’s 30 per cent” and that over the past three years, the anti-meritocratic portfolio has returned 17 per cent compared to the S&P’s 60 per cent”.
Azoria has the doubtful ambition of making every company in the S&P 500 a meritocracy again. “We come in good faith,” it says. “We don’t seek to hurt these great American companies. We simply want to help them unlock value by doing the right thing”.
Fishback is also the brains behind the populist proposal to redistribute savings found by Leon Musk’s plaything the Department of Government Efficiency (DOGE) via stimulus cheques.
Under Fishback’s plan “DOGE Dividends” of, say, US$5000 would be distributed to every American tax-paying household. Fishback may even like to see things taken one step further and perhaps encourage US taxpayers to invest their cheque proceeds in SPXM.
Fishback has been serving as an advisor to DOGE and is close to former presidential candidate Vivek Ramaswamy, who had been appointed to co-chair DOGE with Musk. Fishback offered to take the place of Ramaswamy when he quickly departed DOGE to run for Governor of Ohio.
Strive US Energy (DRLL)
Ramaswamy’s Strive Asset Management – whose backers include US Vice President JD Vance and Silicon Valley investor (and Vance mentor) Peter Thiel – also promotes a range of ‘shareholder first’ ETFs.
The most well-known is DRLL, whose ticker is a reference to the ‘drill, baby drill’ slogan that Trump incorrectly claims as his own.
The slogan was made famous back in 2008 by then Republican vice-presidential candidate Sarah Palin who borrowed it from former Maryland Lieutenant Governor Michael Steele.
When launching DRLL back in 2022 Ramaswamy explained the ETF delivers a “post-ESG mandate to the energy sector to drill for more oil, to frack for more natural gas – to do whatever allows them to be more successful over the long run without regard to political, social or cultural agendas”.
DRLL (like Strive’s other ETFs) is a passive ETF following the Bloomberg US Energy Select Index and has 44 per cent of funds invested in Exxon and Chevron.
But DRLL claims it does “use the power of shareholder engagement and proxy voting to influence energy companies to focus on returns “and abandon political agendas, specifically ESG-imposed constraints”.
It is unclear, however, what “ESG-imposed constraints” Exxon, Chevron – and other DRLL investees like ConocoPhillips and Marathon Petroleum – take much notice of.
Truth.FI
Nasdaq-listed Trump Media and Technology Group, the operator of Truth Social (see image below) recently launched its Truth.Fi financial services platform.
It will include a series of ETFs including Truth.Fi Made in America; Truth.Fi U.S. Energy Independence; and Truth.Fi Bitcoin Plus.
The ETFs are part of Trump Media’s plans to create “a robust ecosystem through which American patriots can protect themselves from the ever-present threat of cancellation, censorship, de-banking, and privacy violations committed by Big Tech and woke corporations,” according to CEO Devin Nunes.
It will be interesting to see if the ‘Plus’ means the Bitcoin ETF will also invest in the $TRUMP and $MELANIA meme coins/tokens. It will, however, probably steer clear of $IVANKA, which Trump’s daughter Ivanka warns is a fake coin being promoted without her consent or approval.
Point Bridge America First (MAGA)
Point Bridge Capital is run by long-time Republican Party fund raiser Hal Lambert. Its MAGA ETF tracks an index of US large-cap companies whose employees and political action committees are highly supportive of Republican candidates.
MAGA screens the components of the S&P 500 Index for companies whose political campaign contributions (from employees and political action committees) meet a minimum threshold over the previous four years.
Eligible companies are then ranked by a “proprietary process” based on the total net dollars and the net percentage of dollars given to Republican candidates versus Democratic candidates.
Its investments include companies like online trading platform Robinhood Markets (HOOD), which donated US$2 million to Trump’s campaign. HOOD is expected to be a beneficiary of Trump’s support for cryptocurrency gambling.
Interestingly, the US Securities and Exchange Commission (SEC) has just closed an investigation into Robinhood’s crypto arm, without taking any enforcement action.
American Conservative Values ETF (ACVF).
ACVF is an actively managed fund which seeks to invest in 400 to 600 US large cap companies that represent political conservative values.
The ETF “seeks to boycott as many companies hostile to conservative values as possible, while remaining confident that it can provide large-cap performance and risk”.
ACVF president Tom Carter says “We do not want to give the companies that are eagerly working to destroy conservative values our hard-earned investment dollars”.
In February ACVF “rebalanced” its portfolio, by adding Trump Media; ammunition manufacturer Olin; and two firearms companies Sturm, Ruger & Co and Smith & Wesson.
The ETFs exclusion list (see image above) includes American stock exchange Nasdaq Inc, which recently had its diversity requirements for listed companies struck down by a US court.
If ACVF really wants to send a strong message to Nasdaq perhaps it should refuse to invest in every company listed on the exchange.
God Bless America ETF (YALL)
YALL is an actively managed fund providing broad exposure to US-listed stocks but which screens out stocks perceived to have strong stances toward the politically left and/or liberal political activism, as well as social agendas, at the expense of maximizing shareholder returns.
It also avoids companies that are bold or stupid enough to make left-leaning public statements about political issues unrelated to their business.
Unusual Whales
Unusual Whales is trading platform that tries to level the playing field for investors, alerting them to what influential players are doing.
The Unusual Whales Subversive Republican Trading (KRUZ) and Unusual Whales Democractic Trading (NANC) ETFs were established “on the premise that members of Congress, such as Nancy Pelosi and Ted Cruz, have access to non-public information that can influence their investment decisions”.
The two ETFs track the trades of Congress insiders and their spouses to “capitalize on their potentially advantageous knowledge”. KRUZ seeks to trade in stocks bought purchased or sold by Republican members of the US Congress and their families. NANC does the same for Democrat members.
Under the STOCK Act, Congress members and their families are required to disclose their trading activities through Periodic Transaction Reports but they are not subject to insider trading laws.
The Unusual Whales Congressional Trading Report for 2024 showed that Democrats averaged a 31.1 per cent return in 2024 while Republicans averaged a 26.1 per cent return versus the S&P 500’s 24.9 per cent return.
The top 10 traders in 2024 list was made up of six Republicans and four Democrats with five Congress members having returns of more than 100 per cent.
In late January bipartisan legislation – the No Corruption in Government Act – was introduced to prohibit insider trading by members of Congress and their spouses.
If the legislation is passed it will prevent members of Congress and their spouses from holding or trading individual stocks.
A New York Times investigation in 2022 found that about 20 per cent of Congress members had bought or sold stocks where they may have had a conflict of interest.
During the 117th Congress, 78 members violated the STOCK Act that requires public disclosure of trades within 45 days.
Perhaps the days of US politicians having a whale of a time on the stockmarket are numbered.
