Congressional Insider Trading
Is Nancy Pelosi one of the best? 👀
Today’s newsletter is all about Congressional Insider Trading. Members of Congress are very influential and have access to extensive insider information, and yet have largely been able to trade stocks with relatively little restriction. For example, Senator Tommy Tuberville, who sits on the agriculture committee has regularly reported buying/selling contracts related to cattle prices. We take a look at who else is an especially active trader, and would you invest in an ETF that follows their trades?
Most Active Congressional Traders (by estimated trade volume)
By a very large margin, Josh Gottheimer (Member of U.S. House of Representatives in New Jersey's 5th congressional district) is the most active congressional trader, with an estimated trade volume of $64.5M. This is $47.2M more than the next most active trader, Nancy Pelosi at $17.3M. In fact, in June alone Gottheimer made 44 trades.
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NANC ETF
This recently launched ETF ‘NANC- Unusual Whales Subversive Democratic Trading ETF’, invests in equity securities purchased or sold by Democratic members of Congress and their spouses. Since its inception in February of this year, NANC has delivered a return of about 11.9%. Furthermore, when comparing this to KRUZ below you can see that Democrats tend to prefer trading securities in the technology sector, which makes up a weight of almost 40% here. This is in contrast to KRUZ where technology’s weight is about half of this at only 19.3%.
KRUZ ETF
The KRUZ ETF works in the exact same way as NANC but instead follows the trades of Republican members of Congress and their spouses. The difference in sector weighting is interesting, and shows that Republicans do prefer investing in sectors such as industrials and energy, which are not as popular with Democrats. Furthermore, KRUZ’s performance has not been as good as NANC’s, achieving a 2.1% return since its inception.
See you on Friday for our deepdive charts!
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