ETFs Tracking Congressional Trading Activity Show Divergent Investment Patterns Ahead of Election

With less than 30 days until the U.S. presidential election, specialized exchange-traded funds that track the investment activity of congressional members are demonstrating notable performance and sector allocation differences between political affiliations. The Unusual Whales Subversive Democratic ETF (BATS: NANC) and Unusual Whales Subversive Republican ETF (BATS: KRUZ) both utilize the Stop Trading on Congressional Knowledge Act disclosure requirements to gain investment insight from elected officials' trading patterns.

Year-to-date performance through October 25, 2024, shows NANC returning 25.24% (NAV Total Return), closely tracking major indices like the S&P 500 Total Return Index (23.14%) and Nasdaq Composite Total Return Index (24.06%), while KRUZ has returned 14.33%. Both funds operate on the "wisdom of crowds" theory, leveraging the collective intelligence of congressional members who must disclose trades exceeding $1,000 within 45 days under current STOCK Act requirements. These disclosures are filed with either the Senate Office of Public Records or the Clerk of the House of Representatives and made publicly available according to the Ethics in Government Act framework.

The sector allocation differences between the two ETFs highlight distinct investment philosophies between political groups. NANC shows heavy concentration in technology (42.48%), with significant exposure to consumer cyclical (12.08%), communication services (11.19%), and healthcare (11.05%). Conversely, KRUZ maintains more diversified sector weights with technology at 25.54%, followed by financial services (14.92%), industrials (13.81%), and energy (10.35%). The construction methodology weights holdings based on the relative dollar amounts disclosed by Congress members and their spouses, with larger transactions receiving greater portfolio weight.

Notably, only two companies appear in both ETFs' holdings: Nvidia (NASDAQ: NVDA) with NANC at 12.74% and KRUZ at 3.46%, and Microsoft (NASDAQ: MSFT) with NANC at 7.97% and KRUZ at 1.26%. Both companies represent leaders in artificial intelligence development, suggesting bipartisan recognition of their growth potential despite differing political ideologies. The performance data and holdings information is available through the respective fund pages and regulatory filings.

As congressional elections occur alongside the presidential election, the trading activity of legislative members provides insight into how political insiders anticipate policy changes that could affect various sectors. While bipartisan support has been growing for restricting congressional trading, the current legislative framework remains unchanged, allowing these ETFs to continue capturing trends from congressional investment behavior. The funds serve as turnkey solutions for investors seeking exposure to the collective intelligence of those most informed about potential policy changes and their economic implications.