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Politics and stocks: New ETFs bet on policy

How can you make money in the stock market based on President Trump’s or the GOP’s next policy move? Or profit from Democrats’ political maneuverings? Or shoot for gains based on coming tax reform?

A new family of exchange traded funds introduced Tuesday by EventShares provide exposure to stocks and bonds whose prices will move up or down based on policy moves by either of the nation’s two major political parties. The EventShares Republican Policies Fund and the EventShares Democratic Policies Fund are actively managed funds filled with investments selected by money managers who seek to unlock val- ue from policy-driven events.

“As we have seen in dramatic fashion since last year’s U.S. presidential election, government policies can have a significant impact on the markets in both the short and the longer term,” said Ben Phillips, chief investment officer at EventShares. “Our funds provide a broad-based vehicle for investing in these themes as embodied by the policies of the two major political parties, which often have divergent views on health care, infrastructure and defense. Our research looks to identify winners and losers on a company level, based on policy outcomes, and to build portfolios accordingly.”

EventShares also launched a U.S. Tax Reform Fund, which provides exposure to companies “poised to see the greatest benefit from the implementation of tax reform in the U.S.”