- The DEMZ and MAGA ETFs offer investors a way to express their political beliefs via their investments.
- DEMZ includes firms that mostly donate to Democratic campaigns, while MAGA buys Republican-aligned companies.
Politically-minded market participants can express their views via their investments by buying shares of Democrat and Republican-aligned exchange-traded funds — and on the basis of returns, one has the edge in this corner of America's political debate.
The Point Bridge America First ETF and the Democratic Large Cap Core ETF both base their investment holdings on the political contributions of corporations.
"The Democratic Large Cap Core Fund is the first investment product that strives to replicate the S&P 500, without the GOP," the website of the fund says.
The constituents in the fund, which trades under the ticker symbol "DEMZ," have to have made over 75% of their political contributions to Democratic causes and candidates.
On the flip side, the Republican ETF, which trades under the ticker symbol "MAGA," includes about 150 companies from the S&P 500 index "that are highly supportive of Republicans" via their political contributions, the fund's website says.
So far, the Democrat-focused ETF has beaten the Republican-focused ETF on a one-year, three-year, and since-inception basis.
Launched in November 2020, the DEMZ fund is up 78.3% since its inception, compared to a gain of 76.6% for the MAGA fund over the same time period.
Perhaps most impressive is that since November 2020, both the DEMZ and MAGA funds have outperformed the S&P 500, which is up about 72% over the same time period.
Over the past year, the DEMZ fund's outperformance has been more pronounced, with the fund up 30% compared to a gain of 18% for the MAGA fund. Over the past three years, DEMZ is up 39% compared to a gain of 31% for the MAGA fund.
Driving the outperformance in the DEMZ fund is its concentration in mega-cap technology stocks.
The top five stocks owned by the DEMZ fund are Nvidia, Apple, Microsoft, Loews, and Costco.
About 36% of the DEMZ fund is invested in technology stocks, compared to just 3% for the MAGA fund.
Instead, the MAGA fund is heavily invested in industrial, financial, and energy stocks.
The top five stocks owned by the MAGA fund are Vistra, Howmet Aerospace, Charter Communications, Amgen, and Garmin.
Another area where the DEMZ ETF is beating the MAGA ETF is in assets under management, with about $36 million invested in the former and about $21 million invested in the latter.