Investors looking to copy the trading activity of members of Congress will soon have another option with a new exchange-traded fund (ETF) filed by Matthew Tuttle, who famously launched ETFs that bet against Jim Cramer and Cathie Wood.
What Happened: The new Tuttle Capital Congressional Trading ETF NPEL was filed Wednesday and could be active in August 2024 giving investors a new way to actively monitor the trading activity of members of Congress,
Benzinga actively tracks the trading activity of members of Congress, particularly Nancy Pelosi, whose husband Paul Pelosi is a venture capitalist who trades large positions in stocks (our government trades page can be found here).
Tuttle Capital Congressional Trading ETF will be an actively managed ETF that invests in equities bought by members of Congress and their spouses.
"Members of Congress are permitted to actively trade stocks, options and other financial assets, including securities of companies that may be affected by the outcomes of legislative and executive meetings in which those members of Congress participated," the filing said.
The ETF will take into account the historical performance of members of Congress, their respective Congressional committees and their seniority to decide whether to invest in stocks disclosed as purchases by members of Congress.
"Just like I want to look at 13F filings of the best money managers only, if I want to clone congressional traders I will want to follow the best only," Tuttle told Benzinga.
Tuttle said that there are several members of Congress "who have amassed huge wealth trading," with some performing better than full-time money managers.
"Sometimes they seem to be amazingly prescient in knowing good or bad things that are going to happen to companies they oversee. These are the people who's stock trades I would want to follow."
The initial ETF holdings will consist of positions held and disclosed by Congress members from the last three years.
Tuttle's new ETF plans to hold around 50 equity securities in the portfolio. Tuttle will serve as the fund's portfolio manager.
Why It's Important: The new ETF will invest in trading activity of both Republican and Democratic members of Congress, which could be a key difference from two Congress trading ETFs that launched in 2023.
The Series Portfolios Trust Unusual Whales Subversive Democratic Trading ETF NANC and Series Portfolios Trust Unusual Whales Subversive Republican Trading ETF KRUZ track the trading activity by political party affiliation.
A plan to hold 50 equities in the ETF also serves as a key difference with the existing congressional trading ETFs holding hundreds of stocks each, with some holdings representing 0.01% of assets.
Tuttle planning to look at the performance of members of Congress and their committee assignments will also serve as a key differentiating factor.
Past performance of Pelosi's holdings could be a key area Tuttle is watching. The ticker of NPEL likely highlights the trading activity of Nancy Pelosi being a key feature.
"Nancy Pelosi is up there in that conversation of the best of the best, and she even does it part time, which in my mind makes it even more of an accomplishment," Tuttle told Benzinga. "How she is able to spend so much time having oversight on all sorts of companies and then able to find the time to trade those companies' stocks is just admirable."
Here's a look at the one-year and year-to-date performance of the existing Congress ETFs versus the S&P 500, as tracked by the SPDR S&P 500 ETF Trust SPY.
- NANC: 1-Year: +32.9%, YTD: +18.5%
- KRUZ: 1-Year: +20.3%, YTD: +8.7%
- SPY: 1-Year: +25.1%, YTD: +14.2%
Read Next: 10 Best Stock Traders In Congress In 2023 (Spoiler: Nancy Pelosi Has Reentered The Chat)
Image: Midjourney
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
Comments
Trade confidently with insights and alerts from analyst ratings, free reports and breaking news that affects the stocks you care about.
