ETF Entrepreneur Matthew Tuttle is At It Again with a New Pair of Anti-Woke and Gun-Focused ETFs

GWGB Breakdown

GWGB will be an actively managed ETF that aims to invest in U.S.-listed mid and large-cap equities that align with either politically conservative or politically neutral criteria, while taking short positions in companies it considers "woke," making it a long-short fund of sorts. 

The ETF defines politically conservative criteria as adherence to values like "American Exceptionalism," individual liberty, and free enterprise, while politically neutral companies are those that abstain from political activities and focus solely on profits and sales. 

On the other hand, the ETF defines "woke" companies are those viewed as hostile to conservative values, often engaging in activities or supporting causes that alienate conservative stakeholders.

As an actively managed ETF, GWGB will rely on Tuttle's discretion in selecting which companies make it into the ETF but does offer some guidelines. According to its prospectus, the selection process begins with a broad pool of U.S.-listed mid and large-cap stocks. 

Companies deemed "woke" following research are immediately eliminated from consideration. Next, the remaining companies are screened for environmental, social, and governance (ESG) factors, with companies having high ESG scores eliminated. 

After this, the advisor applies a fundamental research screen to identify companies with strong financial metrics, like revenue growth potential and return on capital, before finally selecting those that meet the fund's politically conservative or neutral criteria.

GWGB's thesis is that companies following "woke" policies will have a negative impact on shareholder value and alienate conservative shareholders. To capitalize on this perceived value erosion, the advisor may short 10 to 20 such companies.

The exact composition of GWGB is yet to be determined, but it is likely that it will have a significant tilt towards technology and consumer discretionary stocks, as its prospectus has specifically outlined both as "Sector Risk(s)." The ETF will charge a 0.75% expense ratio. 

GUNZ Breakdown

GUNZ is making its entrance into the relatively untapped aerospace and defense ETF sector, a segment where competition is not as fierce compared to other market segments. 

The largest fund in this space is currently the iShares U.S. Aerospace & Defense ETF (ITA), boasting just over $5.2 billion in assets under management (AUM). Other notable competitors include the Invesco Aerospace & Defense ETF (PPA), and the SPDR S&P Aerospace & Defense ETF (XAR). All of these ETFs are index based. 

Source: Investing.com Pro

Unlike GWGB, GUNZ will be passively managed just like its competitors, aiming to replicate the performance of the proprietary AJN Self Defense U.S. Equity Index.

The index will include U.S. companies engaged in sectors like firearms, home security, and emergency management systems, as well as companies that manufacture, service, supply and distribute personal and law enforcement defense equipment and protection services. It uses an equal-weight approach and undergoes quarterly rebalancing. 

The use of a proprietary index may allow GUNZ more flexibility compared to traditional defense ETFs. For instance, the most popular ETF, ITA is top-heavy, holding nearly 36% of its assets in Boeing and RTX, whereas GUNZ has the freedom to diversify its holdings. Its equal-weight index may make it similar to XAR, which has a higher concentration in small and mid-caps. 

The expense ratio for GUNZ is yet to be determined but is expected to be around 0.75%, a common rate for thematic ETFs. For comparison, existing competitors like XAR, ITA, and PPA charge 0.35%, 0.40%, and 0.58% respectively.

[1] https://markets.businessinsider.com/news/etf/vivek-ramaswamy-anti-woke-investment-firm-assets-1-billion-2023-9

[2] https://www.strivefunds.com/

[3] https://www.globenewswire.com/en/news-release/2023/06/02/2681445/0/en/Closure-Due-to-Inability-to-Attract-Sufficient-Investment-Assets.html

[4] https://www.globenewswire.com/en/news-release/2023/06/02/2681445/0/en/Closure-Due-to-Inability-to-Attract-Sufficient-Investment-Assets.html

Please note this article is for information purposes only and does not in any way constitute investment advice. It is essential that you seek advice from a registered financial professional prior to making any investment decision.