Socially responsible investing

If you want to mix race and politics with your money, then Tom Carter has a deal for you.

A native of Leadville and Denver-based mutual fund executive for more than 25 years, Carter is helping conservative investors steer their money away from “woke” companies, those that use their economic might to back social change and racial justice, to those more likely to share their values.

American Conservative Values ETF, or exchange-traded fund, started last October, and already has more than $28 million from more than a thousand investors. There is 27% of the value in large-cap companies on the S&P 500 that the conservative fund won't touch.

The fund’s no-buy list, as of this month, includes Amazon, Apple, AT&T, Facebook, Lowe’s, Coca-Cola, Nike, Starbucks and General Motors. 

The fund's year-to-date return, as of Wednesday, was outperforming the entirety of the S&P 500. 

Carter, the fund's president, started the fund with Bill Flaig, the founder and CEO of Ridgeline Research, a Washington, D.C.-based investment management firm that's long eschewed liberal politics.

"We're trying to court those people who are sick of giving their money to companies like MSNBC and CNN and the New York Times, who are all on the S&P 500," he said.

What he's selling is not cancel culture, however.

"We're not trying to cancel anybody," Carter told me. "We're just giving people the ability to put their capital with companies that share their values. We believe in a free market society, and we're giving people the option with our product to use their free-market choices to avoid investing in companies that don't share their values."

His long-term success, however, won't depend on the politics of the moment, which can swing more wildly than the markets.

"Are we just a Trump fund?" Carter said. "We are not. We are for politically conservative people who don't like the left taking our First Amendment rights away. We don't like the left boycotting things because of election laws in Georgia, or things like that."

The anti-woke movement was center stage in April when Major League Baseball moved its July All-Star Game from Atlanta to Denver over the election laws passed by Peach State Republicans to allegedly make voting harder, especially for minorities. (Republicans, of course, allege otherwise).

Soon after, Barack Obama, took to Twitter to support of the relocation to the Mile High City, where the 44th president accepted his party's nomination in 2008, coincidentally. 

"Congratulations to @MLB for taking a stand on behalf of voting rights for all citizens,” Obama tweeted. “There’s no better way for America’s pastime to honor the great Hank Aaron, who always led by example."

Before the day was out, the 45th president issued a counter statement, because Twitter cancelled his account after Jan. 6.

“It is finally time for Republicans and Conservatives to fight back,” Trump raged. “We have more people than they do* — by far! Boycott Major League Baseball, Coca-Cola, Delta Airlines, JPMorgan Chase, ViacomCBS, Citigroup, Cisco, UPS, and Merck. Don't go back to their products until they relent. We can play the game better than them.”

Aside from politics, Carter saw a unique opportunity in the marketplace. Democrats have used the market to make a point for a long time; conservatives, not so much.

Boycotts have a clear history of driving change. The practice was named for an English landlord, Charles Cunningham Boycott, who was driven out of Ireland in 1880 after his tenants, employees and townspeople waged a "campaign of isolation" against him for being a tyrant.

Rosa Parks and the year-long Montgomery bus boycott, the flashpoint of the Civil Rights Movement, that ended in 1956.

“We don’t need any bricks and bottles,” MLK told members of the Mason Temple Church of God in Christ in Memphis, the Sunday before he was assassinated. "We don’t need any Molotov cocktails. We just need to go around to these stores and to these massive industries in our country and say … make the first item on your agenda fair treatment, where God’s children are concerned. Now, if you are not prepared to do that, we do have an agenda that we must follow, and our agenda calls for withdrawing economic support from you.”

Today, divesting from fossil fuel companies is the target of economic weaponization.

This past legislative session, a Democratic-led House committee squashed, 8-2, a bill sponsored by Democrats to divest the state employees’ retirement fund from holdings in fossil fuel companies.

House Bill 1246  came with $21.5 million in trading fees, which doesn’t include lost opportunity costs teachers, troopers and snowplow scoopers would ultimately bear.

The question, though, for such large funds is whether a vocal few should fiddle with the retirement account of others. Carter's fund is about free markets and individual choice, and to each his own. My bias is toward profitability.

I think Tom Brady said it best. That’s right, Tom Brady. In 2016 he was asked about players kneeling to protest racial injustice. Brady chose to stand.

"It's our responsibility to do the best we can to change the things we don't like,” he told Esquire magazine. “I think that's part of social responsibility, and everybody is going to do that in their own way."

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