Ridgeline Research debuts US ‘conservative values’ ETF

Oct 30th, 2020 | By | Category: Equities

Washington D.C.-based investment adviser Ridgeline Research has introduced its first ETF with the launch of an actively managed US equity strategy that invests according to politically conservative principles.

US equities Ridgeline conservative values ETF

The fund provides active exposure to US large-caps aligned with conservative values.

The American Conservative Values ETF (ACVF US) has listed on NYSE Arca and comes with an expense ratio of 0.75%.

William Flaig, Founder and CEO of Ridgeline Research, commented, “As a long-time passionate conservative and professional investor, I have often been frustrated watching major corporations support causes that are antithetical to my conservative ideals, beliefs, and values.

“I’m tired of investing in these companies! In response, I created an ETF company to service fellow conservative investors, Ridgeline Research. Our first ETF is a large-cap fund which will boycott companies that do not align with conservative values.”

Large-cap companies are defined as those with market capitalizations greater than $4.0 billion, approximately reflecting the Russell 1000 universe of US-listed stocks.

Ridgeline’s investment thesis revolves around the belief that politically active liberal-leaning companies negatively impact their shareholders’ value by misallocating company resources to support their causes.

The fund utilizes negative screening to exclude firms that disproportionately support liberal economic and social issues through charities, advocacy groups, campaigns, candidates, and think tanks. Such support could be financial or as part of corporate governance, marketing, business strategy, and public activism.

Given the qualitative analysis required to determine a company’s alignment with conservative values, Ridgeline has considerable discretion regarding the selection of fund securities. The firm uses many data sources to support its analysis, however, including press releases, social media, advertising information, lobbying efforts, Federal and State Election Commission data, market research, surveys, and polling.

The ETF is expected to have between 400 and 600 holdings with exposure to growth and value investment styles as well as all economic sectors. Ridgeline will seek to manage active risk relative to capitalization-weighted benchmarks such as the Russell 1000 and S&P 500.

Ridgeline has also filed papers with the US Securities and Exchange Commission to launch a similar fund focused on the small-cap segment of the US equity market. The American Conservative Values Small-Cap ETF (ACVS US) is also expected to have an expense ratio of 0.75%.

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