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EventShares brings policy driven ETFs to the investment world


Last week saw brand new New York City-based ETF firm EventShares list their first three politics and policy driven ETFs.

EventShares’ co-founder Ben Phillips explains that this first fully active family of ETFs is the first of its kind to give exposures to policy driven events.

“Government policies can have major impact on markets,” Phillips says. “It was really clear looking at the last election that my co-founders and I saw the polarisation forming and a clear-cut set of companies that in our view were going to benefit with Trump in the White House or Clinton in the White House.”

Phillips and his co-founders have experience investing for institutions, two of them with Goldman Sachs and the third from Ernst & Young. The three new ETFs are running with an average of USD2 million under management since launch. The EventShares Republican Policies Fund and the EventShares Democratic Policies Fund seek to construct portfolios expected to be positively affected by each respective party’s policies.

For the Republican ETF, EventShares has identified five key sub-themes, poised to benefit from Republican policies, including defence and border security, infrastructure and more; while in the case of the Democratic version, the EventShares team has identified key sub-themes that include healthcare expansion, educational access, environmental consciousness and more.

The third ETF is the EventShares US Tax Reform Fund which seeks to provide exposure to those companies that are poised to see the greatest benefit from the implementation of significant tax reform in the US. EventShares says that these would include some of the companies currently among the higher tax payers that would potentially see their rates drop, exporters poised to see their competitiveness increase, and companies that would benefit from changes in capital expenditure accounting.

Phillips says: “We think that the products fit a variety of different ways that are potentially used to express a view on a specific policy and institutional and retail investors could utilise them as a hedge or short them or use options on them down the road. They give investors a way to express an exposure that no one else offers out there.”

2018 sees EventShares launching a new ETF, a unique fund entitled the European Union Break-Up Fund, of which more details will become clear next year.

“These are actively managed portfolios,” Phillips says, “Bringing the best of mutual funds and ETFs together so there is no explicit index or benchmark. We construct these portfolios using qualitative and quantitative research tools in a disciplined investment process.”

The ETFs are active but not buying and selling every day, with quarterly rebalancing, unless there is a distinct need to rebalance intra-quarter.
“ETFs offer a highly accessible package to the end of investor with intra-day investment and the ability to consolidate liquidity and all at relatively low cost,” Phillips says.

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