Less Dumb Investing

If you’re looking to divest from “woke” companies, you might be looking in the wrong place.

There’s a great Wall Street Journal article about the pitfalls of targeted investing.

There’s a growing crop of ETFs promising to align with conservative values—funds like the American Conservative Values ETF, which brands itself as an answer to the liberal agenda. Their pitch is simple: stop putting your money behind companies that, in their words, silence conservative voices. That includes firms like JPMorgan, Meta, and the New York Times.

The idea is to vote with your dollars. But the execution? That’s a little fuzzier.

Let’s take a closer look at the American Conservative Values ETF. Despite the culture war branding, it ends up looking a lot like a plain S&P 500 fund with higher fees. According to Dow Jones, around 335 of its ~370 holdings are already in the S&P 500. Its top holdings are names like Nvidia, Microsoft, Broadcom, and Berkshire—hardly the anti-establishment lineup you’d expect from a fund pushing back on corporate overreach.

The fund has basically tracked the S&P 500 over the past few years. It’s up about 2 percentage points more than the index in 2024, but that doesn’t mean it’s delivering unique alpha. It’s tracking the same mega-cap-heavy market. Just with more expensive marketing—and a 0.75% expense ratio.

If this feels familiar, it should. It’s the same playbook ESG funds used years ago: rebrand a standard tech-heavy portfolio as a values-based investment. Back then, it was climate; now it’s anti-woke. In both cases, you’re paying more for a label.

And yet, these funds are growing. The broader “principles-based” ETF category—whether left, right, religious, or cause-based—now tops $100 billion in assets. That’s 9x what it was just six years ago.

But the returns? That’s where the story falters.

The MAGA ETF—yes, that’s the real ticker—has underperformed the S&P 500 by over 20 percentage points in the last three years. It’s loaded with industrials and financials and lacks exposure to tech, which is where most of the market’s gains have come from. The MAGA fund charges a 0.72% fee.

Now, to be fair, its founder argues it should be compared to the equal-weight S&P 500 index instead, where the performance gap shrinks. But even then, you’re still paying a premium for a political filter that may or may not align with your broader investment goals.

FactSet’s Elisabeth Kashner offered a more pragmatic view: you could just buy a low-cost index fund, save 70 bucks a year in fees per $10,000 invested, and donate that to your favorite candidate. Same values, more control, better math.

The bottom line is this: it’s easier than ever to invest your politics. But make no mistake—it comes at a cost. And if you’re not careful, you’ll end up holding a slightly more expensive S&P 500 clone while telling yourself you’ve taken a stand.