Before Donald Trump even took office, he was setting stock market records despite the conventional wisdom at the time. British bank Barclays predicted the S&P 500 would lose 11 to 13 percent if Trump won the election, but would rise two to three percent if Hillary won. Citibank predicted a five percent drop-off due to a Trump victory. J.P. Morgan predicted a three percent rise following a Hillary victory, compared to markets “falling further” if Trump won.
They were all hilariously wrong. In just the first month following the election, of the 21 trading days since Trump’s victory, the Dow reached all-time closing highs 13 of these days! That was before he was even in office, mind you. Anyone who has checked their 401(k) balance sheet since the election knows that things haven’t stopped since then. The S&P500 is up nearly 12% this year in a market that’s been the most peaceful (i.e. least volatile) in history.
Volatility Index: 11 out of 21 lowest closes in history in the last 2 months. Most peaceful market in history. $VIX pic.twitter.com/cdHt67Bfta
— Charlie Bilello (@charliebilello) July 14, 2017
Deciding to capitalize off the so-called “Trump trade” while appealing to Trump’s own base, Texas-based Point Bridge Capital is launching the “Point Bridge GOP Stock Tracker ETF.” ETF stands for “exchange-traded fund,” which are similar to mutual funds in that they hold a basket of stocks or investments, except they trade similar to stocks in that you can buy or sell an ETF whenever you please (while mutual funds are only settled at market close).
This is an exciting new development:
The ETF strategy starts with stocks in the S&P 500 and analyzes the political contributions of the employees and the company PACs. The top 150 Republican stocks based on their contribution data are then included in the ETF. Hal Lambert, Point Bridge’s founder and a major Texas Republican fundraiser, refers to the approach as “politically responsible investing.”
Lambert told TheDC the top five Republican contributors in the past two election cycles were: AT&T, Marathon Petroleum, Home Depot, Exxon Mobil, and Altria. “All of those stocks will be in the ETF,” Lambert said.
The top five Democrat contributors were: Alphabet (Google), Time Warner, Walt Disney, Apple, and Dish Network.
As of the most recent election cycle, the MAGA ETF will not have any large technology companies that are typically Democratic in their contributions, but Lambert maintains that with 150 stocks, it still contains plenty of industry diversity.
H/T The Daily Caller
As someone with a financial background, I believe it’s worth pointing out that the fund is extremely expensive relative to a plain vanilla S&P 500 fund. While the latter usually charge 0.05-0.1 percent annually in fees, the MAGA fund charges 0.71 percent annually. Still, it’s certainly a neat concept.
What do you think? Is the “Trump trade” going to keep going? Tell us your thoughts about the Trump effect on the economy, and share this cool story on Facebook and Twitter!
