Investing Insights Does It Pay to Copy Congress' Stock Trades?
Mar 28, 2025
Zach Evens, a passive strategies analyst for Morningstar Research Services, dives into the intriguing world of Congressional stock trades. He discusses two ETFs that track these trades, analyzing why investors might consider them. The conversation highlights the stark differences in investment strategies between Democrats and Republicans, particularly their tech stock preferences. Zach also points out the potential risks and limitations of relying on congressional data, urging caution for those exploring these thematic funds.
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Appeal of Congressional ETFs
- Investors may be drawn to ETFs mirroring Congressional trades due to potential political alignment and perceived stock-picking skills of Congress members.
- However, evidence of Congressional outperformance is mixed, with some studies showing positive results and others not.
Congressional Stock-Picking Prowess
- Studies on Congressional stock-picking performance offer mixed results, with no definitive conclusion.
- While anecdotal stories suggest potential outperformance, especially around market events, concrete evidence remains inconclusive.
ETF Background
- Subversive Capital sponsors the ETFs based on Congressional trading data.
- This data is aggregated by Unusual Whales, which collects and provides the information for portfolio construction.