Everyone hates the idea that Congresspeople are using their positions to gain secret information to make investments. Political insider trading has been made illegal several times (usually after a damning CBS 60 Minutes broadcast), but later Congresses have either changed the laws or eliminated the penalties.
You may have heard that some plucky entrepreneurs have decided to create ETFs that attempt to mirror the Congresspeople’s trades. Their ticker symbols are NANC for the Democrats in Congress (cheekily named for uber-successful investor Nancy Pelosi, I’m sure) and GOP for Republicans. Congresspeople’s investment information is made public, although there is a time lag and when it is reported.
Morningstar did an analysis of the two funds (against the general market S&P 509 Index, VOO) and the results are interesting …
As you can see, the Democrats (in blue) have grown 56% in the last 27 months. They outperformed the general market by 9 percentage points, while the Republican-focused ETF (in red) lagged by 18. Both were more volatile than the Vanguard ETF.
To play along, I just transferred $5K from one of my S&P 500 Index Funds equally into NANC & GOP. Just like my experimental crypto currency investment (up 13x since I bought it!), this will be a fun exercise.
I’m not sure if I’ll be disappointed our politicians are bad investors or happy that they are potentially crooks. Either way it will be dubiously entertaining!
Which parties’ ETF would you bet on? Does it matter who is in power or their historical returns?
Image: ChatGPT 5
MrFireStation 
Here’s my daily rant. I wonder what would happen if the brokers who are placing these trades for Nancy Pelosi front running pending legislation made the same trades at the same time for themselves? Would the brokers be found guilty of insider trading?
As bad as the front running is, the damage to American Taxpayers pales in comparison to the cost of quid quo pro. One of the worst examples is the Solyndra scandal. Several campaign bundlers raised $500,000 for Bathhouse Barry when he was running for President. When Bathhouse Barry got into office, the campaign bundlers successfully received $528,000,000 for Solyndra. Solyndra went bankrupt and this added another $528,000,000 to the US National Debt. Politicians are so incompetent, they cannot even steal from American Taxpayers efficiently. How about fixing this by getting the quid pro quo out of politics by allowing politicians to simply steal the money directly from taxpayers?
Washington DC has six of the wealthiest counties in the country surrounding it despite not growing, inventing or manufacturing anything. How about building a wall around Washington DC area and turn it into a prison colony?
Directly answering your question. The ETF’s cannot replicate the front running of pending legislation like Congress. This advantage will likely get arbitraged away.
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“… turn it into a prison colony”! 😆
I figured this topic would get you riled up! It’s sad that it doesn’t get more people riled up.
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Most people are not very well informed and even worse are indoctrinated by false legacy media. Legacy media does not cover the corruption. Instead they play sounds bites of these corrupt politicians play acting and lying to attract a voter base.
My late Father called me one time because he was upset about something he saw in the news. I explained to him that legacy media is not a reliable source for news. As an example, I sent him two clips of Nicholas Sandman who was a Senior at a Catholic High School in Covington, KY. He was on a Senior Class Trip to Washington, D.C. and since they were Catholic, they participated in the Walk for Life (Pro-Life).
One of the clips showed what appeared to be a smart-alecky young kid taunting an Indian. A full length unedited video taken from someone’s cell phone showed that the Indian kept following the young man around and beating a drum in his face. The kid was simply smiling and trying deescalate. How would you have handled this situation when you were 17 years old? The difference between the two videos cost CNN a large settlement for defamation.
My Father said he didn’t watch the news because it upset him. But, he told me that when logging into email he sees news stories or maybe a more accurate term is articles posing as news reporting.
In my opinion, Trump’s greatest strength is that he is able to compete with Demonrats successfully to win the votes of low information voters. He has converted blue collar workers, some unions, a lot of blacks and Hispanics from D to R. He was able to get large groups of people to elections and listen for a couple hours about why their lives are getting worse and how to fix it. It is raw and gritty, but you aren’t going to reach these people by having a sit down interview with the modern equivalent to William F. Buckley, Jr.
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I remember that video with the kid in Washington DC. I guess he made some $$$ through the courts for those who defamed him. Good for him.
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