EventShares combines three government policy ETFs into single strategy

Apr 19th, 2018 | By | Category: Alternatives / Multi-Asset

EventShares has combined the “best ideas” of three of its actively managed, government policy-driven ETFs into a single strategy.

Ben Phillips, chief investment officer at EventShares

Ben Phillips, chief investment officer at EventShares.

The US-based provider launched a flurry of thematic ETFs in the final quarter of 2017, each offering exposure to major multi-factor government policy-driven events and themes.

The EventShares Republican Polices Fund (GOP US) and the EventShares Democratic Policies Fund (DEMS US) were created to target companies which are most likely to benefit from Republican and Democrat policies respectively.

Additionally, the EventShares US Tax Reform Fund (TAXR US) was created to take long positions in securities thought to appreciate in value as a result of tax reform themes observed in US politics, and to take short positions in securities thought to depreciate in value due to tax reform themes.

Effective 19 April 2018, TAXR has been renamed the EventShares US Policy Alpha ETF (PLCY US) and its strategy has changed to include a mix of policy catalysts from GOP, DEMS, and TAXR.

While tax reform and related policies will continue to play a significant role in the fund, other factors will now drive the fund’s strategy including trade, defense, healthcare, education, border security, and environmental concerns.

The fund may invest in equities, fixed income securities, or commodities. According to its prospectus, the fund will hold between 50 to 100 positions and may take on short exposure to a security if it is thought the security may depreciate due to changes in legislation.

“It has been our view from the start that policy is an investable leading indicator, and we have seen that thesis play out in the outperformance of GOP and DEMS since launch,” said Ben Phillips, chief investment officer at EventShares.

“At the same time, however, GOP and DEMS were never intended as vehicles to express a political point of view, though they were viewed by some investors and advisors in that light. They were designed to provide exposure to the policies of the two major parties, regardless of an investor’s political affiliation. With the Policy Alpha fund, we’ve created an investment vehicle that we believe provides access to our best ideas, giving investors the opportunity to get exposure to policy without suggesting a political commitment.”

PLCY is listed on Cboe ETF Marketplace and has an expense ratio of 0.85%.  GOP and DEMS are scheduled to close on 24 April 2018.

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