I voted Democrat. What Next?

Posted by Reflection Asset Management on December, 11 2020
  

A new investment option for election day and beyond

Americans have had their fill of division, strife and sectarianism. The country is ready to heal and move forward and over 70 million individuals have already cast their vote for a more compassionate, collaborative future. But this is just one small part of the democratic process. What many citizens are not aware of, is the passive, indirect way in which some of their consumption decisions may be supporting pressure groups and even parties that are directly at odds with their political priorities.

Indeed Goods Unite Us, a non-partisan technology data platform that researches the political connections of brands and companies, has found that the average consumer funds politicians and political action committees about 3 times more through their purchasing choices than through direct political contributions. Goods Unite Us takes the data submitted to the Federal Election Committee, which records all political donations over $200, and matches it with information about companies’ political funding and contributions by major company executives. Together it provides consumers with a clear percentage breakdown of the company and/or senior executives’ donation distribution.

So thoughtful voters can now check that their purchases or savings and retirement accounts support brands and companies that promote the values they hold dear. But that was as far as it went. Until Reflection Asset Management (RAM) launched its latest product, the first ever ETF (DEMZ) that offers exposure only to those S&P 500 companies whose corporate and executive giving is at least 75% in favor of Democratic candidates, issue areas and political action committees.

Incorporating Goods Unite Us’ unique data analysis, DEMZ’s underlying index also weights and balances the portfolio in an effort to minimize risk. Values-based or E.S.G. (Environmental, Social and Governance) investing has been compatible with healthy investment returns.1 Companies that invest in communities by nurturing human capital and pursuing environmental sustainability are proving no less profitable. DEMZ’s niche in this sphere is to bundle a bespoke selection of S&P stocks into a liquid, cost-effective accessible ETF, for individual investors looking to express support for Democratic values in their investment strategy.

DEMZ highlights how political agency is much broader than casting a vote. With sophisticated data and a sensitive fund methodology, RAM offers investors the opportunity to believe in what they own, without compromising on their risk exposure. As the election results roll in, the DEMZ ETF shows how individuals have more influence than they might think in the promotion of shared Democratic values.

 

1 “The Biggest ESG Funds Are Beating the Market,” Mathieu Benhamou, Emily Chasan and Saijel Kishan, Bloomberg, January 29, 2020. https://www.bloomberg.com/graphics/2020-ten-funds-with-a-conscience/.