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Illustration: Aïda Amer/Axios

Those betting that people want to align stock investments with their political views saw a huge opening this week.

Why it matters: Much of corporate America is at least temporarily turning off the political donation spigot. But who they supported was pushed into the mainstream like never before in the wake of the Capitol mob attack.

  • "The world now is paying a lot more attention” to where companies give politically, Jason Britton, CEO of Reflection Asset Management, tells Axios.

Enter two ETFs — tickers "MAGA" and "DEMZ" — designed to invest in which corporations overwhelmingly give to either Republicans or Democrats.

  • DEMZ, launched by Britton on Election Day, tracks companies that have given on average at least 75% of corporate or employee political contributions to Democratic PACs or candidates in the past three cycles.
  • Among its 50 components: Apple, IBM, Disney and M&T Bank.

MAGA is just the opposite, leaving it overly exposed to GOP favoring industries (oil & gas, for one).

  • "I've had more interest in the last few weeks than I had previously," Hal Lambert, a Trump supporter who created the MAGA ETF in 2017.
  • "People are upset about basically canceling President Trump, and they're upset about the election."
  • (No, he's not considering changing the Trump-influenced ticker, at least for now — despite a swift turn away from Trump.)

Yes, but: Both MAGA and DEMZ have seen only a slight uptick of activity in recent days, according to FactSet data.

  • And they are a tiny sliver of the massive ETF market: MAGA has just over $10 million assets under management — and charges $7.20 annually for every $1,000 you invest.
  • DEMZ has 1/5 of that amount under management, with an expense ratio of 0.45%.

By the numbers: MAGA ETF investors missed the Big Tech run-up that’s led the market higher. It has little exposure to technology companies, which tend to lean Democratic in their political donations.

  • It’s never beat the S&P 500 on an annual basis.
  • DEMZ launched two months ago, but it would have outperformed the S&P every year since 2016, according to a backward-looking price return analysis by S&P Dow Jones Indices.
Expand chart
Data: FactSet; Chart: Axios Visuals

What to watch: The pause in political donations could muddle the makeup of the ETFs, depending on how and when companies move forward.

  • By Britton's count, Alphabet is the only DEMZ component that’s paused donations across the board.

There could be an effect for the MAGA index down the line, thanks to some companies blacklisting GOP members who voted against election certification.

  • Charles Schwab, a MAGA component, is ditching its PAC altogether.

Worth noting: Other politically focused ETFs — “GOP” and “DEMS” — closed in 2018, just one year after launching.

Go deeper

Jan 27, 2021 - Technology

Facebook to downplay politics on its platform

Photo Illustration: Sarah Grillo/Axios

Facebook CEO Mark Zuckerberg on Wednesday said the company will dial back on pushing political groups and content to users.

Why it matters: Facebook is hoping to dim intense political pressure from conservatives and liberals by backing away from arguments it’s long made that political speech is vital to free expression.

Updated 49 mins ago - Science

Volcanic eruption in Tonga caused "significant" damage

This satellite image of the eruption on Jan. 15 taken by Himawari-8, a Japanese weather satellite operated by Japan Meteorological Agency and released by National Institute of Information and Communications Technology (NICT). Photo: NICT via AP

Significant damage has been reported in Tonga following an undersea volcanic eruption on Saturday, which covered the Pacific nation in ash and cut off communication lines.

Driving the news: The eruption triggered tsunami warnings across Tonga's islands and in other regions, including the West Coast of the U.S. and New Zealand.

North Korea launches 4th suspected missile test this month

A news broadcast in Seoul, South Korea, of an apparent North Korean missile test on Monday morning local time. Photo: Jung Yeon-je/AFP via Getty Images

North Korea's military fired "two suspected short-range ballistic missiles" eastward from Pyongyang on Monday morning local time, per South Korean and Japanese officials.

Why it matters: The fourth such launch since Jan. 5 comes days after North Korea's military warned of "stronger" action if the U.S. moved to have more sanctions imposed on the country.