Politically managed funds

[Boho]

Without violating any rules (assuming I haven't already), are there funds known to be managed more politically than others? Meaning they're more likely to drop securities (hopefully at a smart time) from countries that powerful politicians threatened in some way? I ask because I haven't seen any funds named or categorized as such and I've found no indication of it in the top holdings that I've checked. I think all fund managers should act on the things most likely to affect their funds, political or not, but I expected to see certain things in certain holdings that I haven't seen.

 

[panacea]

I've never come across any fund that are "politically sensitive." There are Socially Responsible funds that steer clear of things like tobacco, firearms, etc. But even those are pretty hard to come by if you're looking for a good performing fund.

 

[ERD50]

This approach has the same problem that any approach like this has.

If it were obvious that some action (anything, not just political) were going to affect the value of a stock/fund/industry/segment, that investment would already have adjusted to that expectation.

To do what you want to do means expecting the unexpected. You need a good crystal ball for that.

This reminds me of the ads I used to hear touting the advantages of buying heating fuel oil futures. " Winter is coming", with the inference that fuel oil will be going up in price. But anyone in the market knows this, and the price is already built in.

Good luck on your search.

-ERD50

 

[Gumby]

I think you are looking for a global macro fund

https://en.wikipedia.org/wiki/Global_macro
https://www.thebalance.com/top-global-macro-hedge-funds-to-follow-1979220

 

[samclem]

I think all fund managers should act on the things most likely to affect their funds, political or not,

Right. Presumably these managers look at every type of risk and opportunity. It wouldn't be much good to have managers looking only at political risk, only at currency risk, only at risk of a dought, etc.

but I expected to see certain things in certain holdings that I haven't seen.

If your reading of the tea leaves differs from the managers you're paying to do that work, then ask yourself what you know that they don't. If you still believe you know best, then vote with your dough. It doesn't make sense to pay for professional management if you think those managers are less adept than you are.

In general, I don't think I can spot managers who know any better than the market as a whole does, so I pretty much just depend on the crowd to be right. Mostly . . .

 

[easysurfer]

If there is such a thing, sounds to me a bit like a sector fund, which I'd stay away from. Prefer to just do the index thing instead.

Boho...indexing is a sound strategy, no kidding .

 

[Boho]

Boho...indexing is a sound strategy, no kidding .

I believe it. The majority of my portfolio is ONEQ, an index fund that tracks NASDAQ. I also have a little in MTRAX, a "world allocation" mutual fund, but like many of the international funds, the chart shows it approximating NASDAQ more than I'd like. If I could only remove a continent or two, or a few countries that make sense considering current events, it may level things out more. Bonds will level things out but they don't perform as well as stocks. I've read that "if you can stomach the volatility" than 100% equity may be good, but I say it's often good anyway and you should just deal with it if you want maximum return. To make things less volatile, I want the right mix of foreign equity.

 

[easysurfer]

I believe it. The majority of my portfolio is ONEQ, an index fund that tracks NASDAQ. I also have a little in MTRAX, a "world allocation" mutual fund, but like many of the international funds, the chart shows it approximating NASDAQ more than I'd like. If I could only remove a continent or two, or a few countries that make sense considering current events, it may level things out more. Bonds will level things out but they don't perform as well as stocks. I've read that "if you can stomach the volatility" than 100% equity may be good, but I say it's often good anyway and you should just deal with it if you want maximum return. To make things less volatile, I want the right mix of foreign equity.

I just go total US index, total international index and total bond index. Then just rebalance the to my chosen percentages. Makes things simple for me. I like simple .

 

[MRG]

I just go total US index, total international index and total bond index. Then just rebalance the to my chosen percentages. Makes things simple for me. I like simple .

Good plan.

I've never heard of this type of fund, just what was mentioned above. I had a portfolio of socially unacceptable individual stocks and for a while it did well.

Part of the problem with such a fund is the possible reactions of many political decisions are subject to our interpretations. Some may see action X as a positive and others see a negative.

 

[audreyh1]

I don't know of any fund that can predict the social media feeds. And I suspect that in the long run such a fund wouldn't outperform other funds anyway. No matter what some short term impact, the long term results are still way too uncertain. Better to diversify across a broad range of stocks (like using mutual funds) which helps average out such short-term glitches, and savvy fund managers will eventually take advantage of a stock going through a short-term hit that doesn't impact their long-term outlook.

 

[Chuckanut]

In my life I have seen politicians of all stripes flip-flop on many issues they had taken a tough stand on during the election and even in their early years. Wasn't it Winston Churchill who said, "I reserve the right to be smarter today than I was yesterday" ?

I can't imagine investing in anything based upon the political winds. Now actual laws are another thing.

 

[donheff]

I don't even know what a political fund would be but there are funds that are geared towards "socially conscious" investors of various stripes. Schwab has a list of them. Google will find many more.