The average consumer funds politicians and political action committee (PACs) about 3 times more through their purchasing choices than through direct political contributions. (see www.goodsuniteus.com) This occurs through passive support or patronization of companies whose political links are unknown or unchecked. DEMZ seeks to offer investors the opportunity to ensure that such unintentional backing does not result from their stock market investment portfolios, without sacrificing return potential. RAM’s proprietary S.E.E. (Social, Environmental and Expected Financial) methodology aligns social and environmental concerns with maximal expected financial performance.
Rooted in the belief that superior corporate performance can be achieved in harmony with the pursuance of specific social values, Democratic supporters will find in DEMZ companies that embrace:
DEMZ‘s unique methodology, which incorporates deep data analysis with algorithmic modeling, offers Democratic investors the chance to synthesize their political priorities with their investment goals, to believe in what they own.
DEMZ sets out to erase the contradiction between seizing the investment edge and advancing political priorities. DEMZ is the first cost-effective, accessible ETF that is designed to potentially optimize risk and maximize gain, while ensuring that investors own only those companies that share their commitment to Democratic causes and candidates. While investing in equities involves risk and principal loss is possible, DEMZ has been designed to attempt to reflect the risk and performance characteristics of the S&P 500.
As a wise person once said: size doesn’t matter with ETFs. JP Morgan has an excellent primer on ETF liquidity, which is available here.
Like most new ETFs, DEMZ asset base has grown from its launch value but there are days where trading volume is fairly light. However, as JP Morgan explains, “[p]erhaps the most common ETF misconception is that low daily trading volumes or small amounts of assets under management (AUM) indicate that an ETF is illiquid (i.e., difficult and/or expensive to trade). This myth probably persists because ETFs and stocks look similar on so many levels. But the reality is that ETFs function fundamentally differently from individual stocks and this difference has a direct bearing on liquidity. . . . Thanks to the creation and redemption mechanism, ETF liquidity is predominantly determined by the liquidity of the underlying individual securities that make up the ETF.”
In DEMZ case, all underlying individual securities in the fund must be in the S&P 500, which means all DEMZ holdings are US large cap stocks and are extremely liquid. If you are interested in placing an order of size or have questions, please reach out (or have your investment advisor reach out) and our trading team will be happy to assist you. They can be reached at email@example.com.
On a quarterly basis, Reflection Asset Management receives from its contracted data provider a list of large-cap Democratic company stocks from the S&P500. A company is considered Democratic and eligible for investment if the company’s own contributions and those of its senior executives comprise an average of 75% or more of their total documented contributions to Democratic candidates and political action committees.
As of 12/31/20, there were approximately 200 company stocks from the S&P500 that meet this Democratic threshold. Reflection Asset Management then utilizes portfolio construction software, which through monte carlo simulations replicates a best-fit portfolio from those 200 possibilities, resulting in an index portfolio with the overall goal of mirroring the risk and performance characteristics of the entire S&P 500.
You can see a list of the DEMZ holdings here.