Tuttle Capital Management has launched a new US equity ETF targeting companies that focus solely on generating shareholder value, not on politics or trendy activisms of the moment.
Matthew Tuttle, CEO of Tuttle Capital Management.
The Tuttle Capital Shareholders First Index ETF (ESGX US) has been listed on Cboe BZX Exchange with an expense ratio of 0.75%.
The strategy posits that companies not engaged in political or social activism are more likely to concentrate on profit generation and therefore potentially outperform others in most market conditions.
Matthew Tuttle, CEO of Tuttle Capital Management, commented: “Too many companies today put ESG and politics first and their shareholders’ profits last. ESG has become a way for liberal executives and large investors to enact social changes that they can’t pass at the ballot box.
“CEOs are often pressured to cave to the trendy politics of the moment, even if it’s not in the best interest of their shareholders. That’s why we’ve launched ESGX – to put shareholders and profits first.”
Methodology
The fund is linked to the AJN Shareholders First Index which selects its constituents from a universe of the 900 largest companies by market capitalization that are listed on US exchanges.
The methodology involves a comprehensive review of each company’s political and social activities, including a detailed analysis of corporate donations, advocacy efforts, and stated policies. This information is gathered from a variety of reliable sources, such as IRS filings, company websites, and reputable news publications. Companies found to engage in politically motivated actions are excluded from the index’s eligible universe.
Following this, the index utilizes a proprietary scoring system to evaluate each company’s commitment to maximizing shareholder value, which is complemented by a separate quantitative financial metric scoring methodology. These financial metrics include key indicators such as price performance, cash reserves, revenue, debt-to-equity ratios, and market capitalization.
The top 50 companies, ranked by their combined scores, are selected to comprise the index, with their positions generally weighted according to their scores. The index is rebalanced and reviewed on a quarterly basis to ensure alignment with its criteria.