Could Trading Like a Member of Congress Be Your Next Big Investment Strategy?
:max_bytes(150000):strip_icc()/GettyImages-2101912703-6d4795479c7946db83031710daf76cc1.jpg?w=780&resize=780,470&ssl=1 "Could Trading Like a Member of Congress Be Your Next Big Investment Strategy?")
Members of Congress generally like to trade stocks, and many of them are suspiciously good at it. Some say it’s luck or good investing instincts. Some critics argue that they’re using inside knowledge about forthcoming policy changes and economic developments.
Whatever their secret, mimicking the serial market-beating stock trades of congressional representatives and senators is a tempting proposition. And it’s now possible, thanks to laws requiring members of Congress and their spouses to disclose their investments, as well as a pair of exchange-traded funds (ETFs).
Key Takeaways
- Members of Congress have access to information the public doesn’t know that could influence their trading of stocks.
- Their great track record and the fact that they’re now required to disclose trades paved the way for two ETFs—one mirroring Republican trades and the other tracking Democratic trades.
- There are questions about the ability of these ETFs to mimic trades quickly, and their premise is based on what amounts to insider trading by elected representatives.
Democratic and Republican ETFs
In 2023, the fund manager Subversive launched two ETFs designed to mirror the stock trades of members of Congress and their families. One, the Unusual Whales Subversive Democratic Trading ETF (NANC), focuses on the Democratic party. The other, the Unusual Whales Subversive Republican Trading ETF (GOP), covers Republican trades.
These ETFs get their information from Unusual Whales, an outfit that tracks congressional stock trades. The funds weight their holdings based on the total invested by each party. Each has an expense ratio of 0.74%.
A look at their holdings reveals some key differences. The Democratic portfolio is tech-focused and growth-oriented, while the Republican portfolio is more diversified, with investments in energy, industrials, bitcoin, and financial services.
| NANC Top 5 Holdings as of June 12, 2025 | |
|---|---|
| Asset | % of Net Assets |
| NVIDIA Corp. (NVDA) | 9.97% |
| Microsoft Corp. (MSFT) | 8.00% |
| Amazon.com, Inc. (AMZN) | 5.32% |
| Alphabet (GOOG) | 3.96% |
| Salesforce Inc. (CRM) | 3.83% |
| GOP Top 5 Holdings as of June 12, 2025 | |
|---|---|
| Asset | % of Net Assets |
| iShares Bitcoin Trust ETF (IBIT) | 4.95% |
| JPMorgan Chase & Co. (JPM) | 4.58% |
| Comfort Systems USA Inc. (FIX) | 3.81% |
| NVIDIA | 2.95% |
| AT&T (T) | 2.82% |
How Have the ETFs Performed?
Since the funds launched in February 2023, the Democratic ETF has held a clear advantage. As of May 31, 2025, it had returned 58.9%, or 22.18% on an annualized basis.
The broader Republican ETF, meanwhile, delivered a cumulative return of 30.2% since inception, or 12.09% on an annualized basis. In isolation, that’s respectable. However, when compared against the Democratic performance and the significantly cheaper Vanguard S&P 500 ETF (SPY) and its expense ratio of 0.09%, its price tag becomes harder to justify.
Reasons For Skepticism
There are several reasons to be skeptical about investing in these ETFs:
- Ethics and regulatory risk: The core investment thesis assumes that members of Congress are trading on nonpublic information, a practice that raises significant legal and ethical questions. An irony is that should these ETFs do particularly well, that could draw more attention to the stock trading practices of Congress, putting pressure on lawmakers to pass a bill that would ban such trading and render the ETFs obsolete.
- Trading signal delays: The STOCK Act requires members of Congress to reveal trades within 30 days of the transaction, and they can request an extension of up to 90 days. This time lag means the ETFs can’t replicate trades in real-time.
- High expense ratios: With an expense ratio of 0.74%, these funds are far pricier than broad-market index funds.
The Bottom Line
The idea of mirroring the trades of the politically connected is compelling, and these ETFs offer a novel way to act on that strategy. However, investors should weigh this appeal against the funds’ significant challenges.
The inherent delay in trade reporting and high expense ratios are practical hurdles to profitability. In addition, the success of the funds relies on a controversial premise that is facing growing scrutiny. Investing in these ETFs is ultimately a bet not just on lawmakers’ stock-picking skills, but on the persistence of a system that allows these trades in the first place.
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