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Democratic Donors Are Beating The S&P (And Republicans); Take A Look At This Motif

Democratic Donors Are Beating The S&P And Republicans; Take A Look At This Motif

  • Motif Investing constantly looks for “trends, ideas and world events that could create an investment opportunity,” and then picks 10 to 30 related stocks to build portfolios around, weighing them based on their exposure to the coinciding idea, event or trend.
  • The people at Motif Investing have developed a portfolio of U.S.-listed equities of companies that actively donate money to the Democratic Party.
  • The companies included here destine at least 50 percent of their total donations to the political party.
  • Although “Democrats control the White House and Senate again [and] have some momentum with the US Supreme Court’s upholding of the federal health-care legislation known derisively by detractors as ‘ObamaCare’ […] the to-do list is extensive,” the people behind the creation of this motif explained.

    “For the White House to lead the way through the partisan gridlock that exemplified the first term, the President may have to make concessions to help bridge the divided Congress and get the results expected from a ‘smart government.’

    “As Democrats make strides toward executing on the President’s vision, some big Democratic supporters could be expecting benefits to come their way,” they added.

    Related Link: Avoid Market Volatility With This Classic 60/40 Investment Strategy

    The Motif

    So, Motif identified the companies that actively donate money to the Democratic Party through Political Action Committees (PAC), individual contributions and various other channels. They then eliminated all of the ones that allocated less than half of their total donations to the Democratic Party.

    The result: a portfolio – comprising five companies in three different sectors – that has managed to beat both the S&P 500 and the portfolio of Republican Donors (companies that actively donate money to the Republican Party).

    Performance And Allocation

    The Democratic Donors motif has returned 16.6 percent over the past year and 7.3 percent over the past month alone. Thus, it has managed to outperform the S&P 500, which rose roughly 4.4 percent in the past year and about 3.6 percent in the past month. Moreover, the portfolio has also managed to beat the comparable Republican Donors motif, which surged 9.7 percent in the past year and 3.8 percent in the last month.

    In terms of asset allocation, 41.6 percent was put in technology stocks, 37.7 percent in commercial services stocks and 20.7 percent in consumer products and services.

    As for individual stocks, allocation goes as follows:

    • 21.1 percent: Alphabet Inc (NASDAQ: GOOGL)
    • 20.7 percent: Comcast Corporation (NASDAQ: CMCSA)
    • 20.5 percent: Microsoft Corporation (NASDAQ: MSFT)
    • 19.6 percent: Interpublic Group of Companies Inc (NYSE: IPG)
    • 18.1 percent: WPP plc - American Depositary Shares each representing (NASDAQ: WPPGY)

    Disclosure: Javier Hasse holds no positions in any of the securities mentioned above.

    Image Credit: Public Domain


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