US-based Strive Asset Management knows how to address sentiment among a section of Americans. Strive launched two ETFs this week. One is called “God Bless America” with the ticker symbol YALL. The other ETF has the ticker DRLL and invests mainly in oil and gas (76 per cent). They have since been dubbed as anti-woke ETFs in the media.
DRLL had already raised $300 million three weeks after its launch in August, writes US media, although that figure cannot be found on Strive’s site. The God Bless America ETF had its launch in New York this week. Strive AM positions itself as “anti-woke”.
Woke stands for being aware of racism and other social injustices towards minorities in society. In the US, partly also at the time of Trump’s “Make America Great Again”, a counter-movement has grown.
Antiwokers like Strive AM reject all attention to the E, the S and the G (ESG) - the mantra of environmentalists and responsible investors. “We are also activist, but along the other side. We have sent letters to more than 10 companies, such as ExxonMobil and Apple, to focus less on ESG and more on their profits,” says ceo Vivek Ramaswamy.
Maximising shareholder engagement
The God Bless America ETF, advised by Toroso Investments and funded by Curran Financial Partners, aims to invest in US companies with a “track record of creating US jobs”, according to the prospectus filed with the Securities and Exchange Commission (SEC). The ETF, which will trade under the ticker YALL, will exclude companies that have “emphasised political activism and social agendas at the expense of maximising shareholder returns”.
In that context, Strive said at YALL’s launch that it will boycott companies with a market capitalisation of more than a $1 billion that speak out on issues such as Georgia law that imposes some restrictions on citizen voting. Still, Strive’s strategy partly aligns with some progressive goals.
For instance, portfolio manager Adam Curran stated that at the top of the list of priorities is a preference for companies that treat their payroll as an investment rather than a cost. Issues such as job creation and fair wages are topics that advocates, such as the so-called Congressional Progressive Caucus, are pushing for.
On this point, Curran curiously agrees with BlackRock chief Larry Fink, who has said that companies’ policies towards their employees (the Social part in the ESG definition), are essential to shareholders’ interests.
Antiwoke hard to sell
So far, earlier principles-based ETFs have received little inflow. The Point Bridge GOP Stock Tracker ETF (MAGA), which invests in companies that support the Republican party, has attracted only 15 million in assets, despite the fact that it has outperformed the S&P 500 by a wide margin over the past year. Meanwhile, assets in environmental, social and governance-focused ETFs fell in the first quarter - a rare decline that will continue for now, according to Bloomberg Intelligence.
“These things are hard to sell as investments,” Eric Balchunas, Bloomberg Intelligence ETF analyst said earlier. “I just think they probably overestimate how many people will actually move their investments into these.”
Michael Venuto, Charles Ragauss and Adam Curran will manage YALL. The portfolio of the actively managed ETF will consist of about 30 to 40 companies.
BlackRock, which has come under fire from Republican-led states because of its deployed ESG policies, is also getting wind of Strive AM, according to a public response on its site to the letter published by BlackRock in response earlier to the US debate.
Strive also launched a tracker this week that invests in chip companies that the asset manager says could benefit from China’s “potential annexation of Taiwan”.
Robeco closely follows debate
Investment Officer spoke this week with Karin van Baardwijk, Robeco’s officially appointed CEO from 1 January. The Dutch asset manager is active in the US with its quant strategy as well as its ESG-integrated strategies. Van Baardwijk said in the interview, which will be published next week, that Robeco is closely following developments on the topic of sustainability in the US.