Tuttle Capital Management has filed for a unique exchange-traded fund (ETF) that aims to capitalize on the investment decisions made by members of the United States Congress and their spouses. The proposed “Tuttle Capital Congressional Trading ETF” will actively manage a portfolio based on the stocks reported in the mandatory public disclosures of Congressional members. This intriguing strategy seeks to leverage the financial moves of those with potential insider insights into the legislative process.
How the ETF Will Operate
According to a regulatory filing on June 11, the Tuttle Capital Congressional Trading ETF will track and invest in the stock holdings disclosed by U.S. lawmakers. These disclosures are required under the Stop Trading on Congressional Knowledge (STOCK) Act of 2012, designed to curb the misuse of non-public information by elected officials for personal gain.
The ETF will select which members of Congress to follow based on several criteria:
- Historical Performance: The track record of their investment returns.
- Committee Memberships: The relevance of the committees on which they serve to the industries of their investments.
- Seniority: The influence and tenure of the Congress members.
Management Fees and Investment Approach
Tuttle Capital proposes a 0.75% management fee for the ETF, positioning it as a competitively priced actively managed fund. This fee structure is in line with the market for actively managed ETFs, offering investors a chance to potentially benefit from the financial acumen of influential lawmakers.
| Feature | Details |
|---|---|
| Management Fee | 0.75% |
| Investment Strategy | Actively managed, based on Congressional stock picks |
| Selection Criteria | Historical performance, committee service, seniority |
| Disclosure Basis | STOCK Act public filings |
Tuttle Capital’s new ETF proposal is not the first to explore the niche of Congressional stock tracking. In February 2023, Subversive Capital Advisors launched two ETFs: the Unusual Whales Democratic ETF (NANC) and the Unusual Whales Republican ETF (KRUZ). These funds also invest based on the stock picks of U.S. lawmakers but are categorized by political affiliation.
So far in 2023, both of these ETFs have shown notable performance:
- Unusual Whales Democratic ETF (NANC): Up 17% year-to-date.
- Unusual Whales Republican ETF (KRUZ): Up 8% year-to-date.
For comparison, the S&P 500 index has returned 12.7% over the same period, according to Yahoo Finance and MarketWatch. This performance indicates that tracking the investments of lawmakers could potentially offer competitive returns.
Tuttle Capital’s Innovative ETF History
Tuttle Capital is well-known for its creative and unconventional ETF offerings. In 2022, they introduced two ETFs based on the investment advice of CNBC’s “Mad Money” host, Jim Cramer:
- Inverse Cramer ETF: This ETF bet against Cramer’s investment tips.
- Long Cramer ETF: This ETF followed Cramer’s recommendations.
While these ETFs garnered significant attention, they had relatively short lifespans. The Long Cramer ETF was operational for about five months, and the Inverse Cramer ETF lasted approximately 11 months before both were shut down.
| ETF Name | Strategy | Duration |
|---|---|---|
| Long Cramer ETF | Follow Jim Cramer’s stock picks | 5 months |
| Inverse Cramer ETF | Bet against Jim Cramer’s stock picks | 11 months |
In January, Tuttle Capital also filed for six proposed leveraged and inverse Bitcoin (BTC) ETFs. These ETFs aimed to offer amplified returns linked to a spot Bitcoin ETF, though they are not currently listed on Tuttle Capital’s website as active products.
Matthew Tuttle, the CEO and Chief Investment Officer of Tuttle Capital, continues to explore innovative ETF concepts. Recently, he mentioned that an ETF tracking the stock picks of Keith Gill, famously known as “Roaring Kitty,” could be an “interesting idea.” Gill gained fame and notoriety for his pivotal role in the GameStop (GME) stock surge. This idea, though casually proposed by The ETF Store President Nate Geraci, highlights Tuttle’s openness to unique and potentially lucrative investment strategies.
The introduction of the Tuttle Capital Congressional Trading ETF comes at a time when there is increasing scrutiny over the financial activities of lawmakers. The STOCK Act mandates transparency in the financial dealings of Congress members to prevent conflicts of interest and insider trading.
Tuttle Capital’s approach to leveraging this information through an ETF could offer investors a novel way to benefit from the investment decisions of lawmakers, which are often seen as informed by their unique positions and access to information.
Tuttle Capital’s latest ETF proposal, targeting the stock picks of U.S. Congress members, represents an innovative approach to investing in the political landscape’s financial decisions. With a 0.75% management fee and a focus on actively managed strategies, the Tuttle Capital Congressional Trading ETF aims to provide investors with a distinctive opportunity to capitalize on the financial insights of lawmakers. As the ETF market continues to evolve, Tuttle Capital remains at the forefront of exploring and launching unconventional investment products.
