Online brokerage eToro today launched three new Smart Portfolios, including one that copies Congress members’ stock buys.
The portfolios, launched in partnership with investment research platform Quiver Quantitative, will all tap into publicly disclosed government data.
Public disclosures have revealed US politicians making stock trades around key events in recent years, such as right before the COVID-19 lockdown, the conflict in Ukraine, Silicon Valley Bank’s collapse, and Nvidia’s stock surge. To mimic their strategies, the Congress-Buys portfolio will include the top 10 stocks recently bought by Congress members based on the size of the purchase.
The Lobby-Spending portfolio will include companies with rising lobbying expenditures, while the DC-Insider portfolio will consist of firms that are frequently traded by Congress members, spend a large amount on lobbying, and hold a significant number of government contracts. As investors become increasingly interested in understanding the inner workings of the US legislature, public data about which companies are hiring lobbyists to influence lawmakers to pass favourable policies, and which companies are landing lucrative government contracts can be valuable when forming investment strategies.
“Federal law requires Congress members’ stock trades, companies’ lobbying expenditures and government contracts to be disclosed, but it can be difficult for retail investors to scrape and analyse this information in a simple way to support their investment decisions,” said Gil Shapira, Chief Investment Officer at eToro. “We are excited to partner with Quiver Quantitative to make information from Capitol Hill accessible to retail investors with these new portfolios. By leveraging Quiver’s bank of aggregated data and analysis, we can harness insights from US government activity and make them accessible to eToro users through innovative strategies.”
“One of our goals is to help retail investors better understand the relationships between Wall Street and Capitol Hill, and give them the tools to act off that information. We are excited to bring some of our data and strategies to eToro’s platform, and hope it will be a valuable resource for their traders,” said James Kardatzke, CEO and Co-Founder of Quiver Quantitative.
Details of the three portfolios are as follows:
- Congress-Buys: copies the top 10 stocks bought by Congress members in the past 100 days based on the reported size of the purchase. Initial allocation includes stocks such as Nvidia and Simon Property Group.
- Lobby-Spending: comprises 10 companies with the most quarter-on-quarter growth in US federal lobbying expenditures. Initial allocation includes stocks such as eBay and Roblox.
- DC-Insider: includes companies who spend a large amount on corporate lobbying, have a significant number of government contracts and are frequently traded by Congress members. Initial allocation includes stocks such as AT&T and Ford Motor.
eToro and Quiver Quantitative scrape public disclosures to create these strategies and each portfolio will be rebalanced monthly to reflect the latest data.
