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3 Politically-Charged ETFs Debut

October 18, 2017 9:01 am
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3 Politically-Charged ETFs Debut

The environment in Washington, D.C. is heated. All over the United States, political passions are running high. Issuers of exchange traded funds are looking to capitalize on those themes.

EventShares on Tuesday launched three smart beta ETFs designed to benefit from goings on in our nation's capital. The aptly tickered EventShares Republican Policies Fund (BATS:GOP) and the EventShares Democratic Policies Fund (BATS:DEMS) are actively managed funds designed to profit from the policies of those political parties.

GOP and DEMS “seek to construct portfolios expected to be positively affected by each respective party’s policies. Both seek to provide capital appreciation by unlocking value from policy-driven events and themes. Neither fund seeks to replicate the performance of a specific index,” according to a statement from EventShares.

Rooted In Research

As active ETFs, GOP and DEMS aren't married to the sectors investors often associate as benefiting from the policies of those political parties. Think energy and financial services for Republicans and healthcare and alternative energy for Democrats.

“The EventShares research process includes both a qualitative component that reviews current and prospective policy initiatives and their potential impact on specific sectors and stocks, and a quantitative process that screens for a set of proprietary metrics used to define the investable universe and manage portfolio risk,” according to the issuer.

Additionally, GOP and DEMS aren't constrained by asset classes or geography, meaning the new ETFs can holds bonds and stocks and venture outside the U.S.

An ETF For Tax Reform

With tax reform being a centerpiece of the Trump administration's agenda, EventShares has a new ETF for that, too. The EventShares U.S. Tax Reform Fund (BATS:TAXR) debuted as well.

“TAXR seeks to provide exposure to those companies that are poised to see the greatest benefit from the implementation of significant tax reform in the U.S.,” according to EventShares. “The company may introduce additional tactical ETFs going forward. Past examples of tactical situations around which an EventShares fund might have been constructed include the Dodd-Frank legislation, Obamacare, Quantitative Easing, and Abenomics.”

TAXR allocates 27 percent of its weight to industrial stocks and a combined 30 percent of its lineup to the technology and consumer discretionary sectors.

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