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Red State Fund, Blue State Fund

Investing in Ideology & Governance
 
(+1, -1)
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against]

Investment funds are often based on a particular theme. There are any number of country-specific investment funds out there, where the attraction is that country's economy. A fund can invest in a component of that economy, such as a particular industrial sector.

But what about investing in a geographic sub-sector of a country's economy, like a state? A state has an economy, but it also has a local state govt, whose policies affect the economy in that state. The ideology of a country and the govt in power can certainly affect its policy approach, including towards the economy, and thus affect that country's economic performance. Likewise, the same would be the case for a local state and its ruling govt.

Currently, the United States is experiencing intense political polarization, while undergoing an internal transition. People are fleeing from Blue States like California where they feel the future is one of decline, and moving to Red States like Texas and Florida, where they feel there is a promising future. Due to the deep ideological schism in the country, birds of a feather wish to flock together. And why shouldn't they? Like-minded people may be able to coexist more harmoniously and do greater things together in each other's company, as compared to being alone or with those they're in conflict with. While the nation as a whole may be divided, some sub-sections of the nation may consolidate and unite. This may result in better economic performance for some, and worse economic performance for others.

The purpose of a Red State Fund and a Blue State Fund is to allow investors to then invest in the ideological approach they feel will yield the most growth and prosperity. Instead of having to invest more broadly in the economy of an entire country, or in an industrial sector of an entire country, it may be useful to target investment into a geographic sub-section of a country and its economy, based on governing ideology as the differentiating criteria. This may represent an untapped market opportunity. Many people are ideological, and that includes investors too. Why not offer an investment product to the marketplace which caters to their ideological preferences? In a world where ideology and money are at the forefront of contention, why not marry the two together and let the market decide what's most profitable?

sanman, Nov 19 2021

Municipal Bonds https://www.investo...d-income-products-0
[a1, Nov 19 2021]

DEMZ https://www.fool.co...nched-election-day/
[theircompetitor, Nov 19 2021]

anti woke ETFs https://www.bloombe...onservative-traders
[theircompetitor, Nov 19 2021]

[link]






       Municipal Bonds. Buy ‘em from the state government you approve of.
a1, Nov 19 2021
  

       Bonds are securities. What about the growth side? We're currently in a high-inflation environment, where bonds of any kind see their yield eroded by inflation, and this is what's keeping people piled into stocks and fixed assets like real estate. Real estate can certainly be tied to geographic locality, so that buying property in a particular area may amount to a vote of confidence in its economic future.   

       But stocks are still their own asset class, and are geared towards growth. If country-specific ETFs can own certain stocks associated with said country, why can't there likewise be state-specific ETFs that hold stocks associated with that state, whereby a suitable company's operations and assets are disproportionately tied to that state? Eventually, investment funds could granularize down to the municipal level, but state level should logically come first.
sanman, Nov 19 2021
  

       Furthermore, there should be an explicit tie to ideology. Just as an investment fund can be tied to a certain theme (environmentally friendly technology fund, socially responsible investment fund, etc), likewise it should be possible to explicitly organize an investment fund around ideological criteria. An association with ideology and ideological criteria can be the prime selling point to prospective buyers.
sanman, Nov 19 2021
  

       This could be an interesting experiment. But we don’t need more reasons to be polarized.
RayfordSteele, Nov 19 2021
  

       This would actually help to reduce/end polarization, not increase it. Why? Because while the electorate is a Voting Machine, the market is however only a Voting Machine in the short term --- in the long term the market is a Weighing Machine. (I'm repeating that famous quote from Benjamin Graham, which you've no doubt heard.) The market sifts the wheat from the chaff in the long run. Weighing Machine therefore has the proven power of influencing the Voting Machine in the investment world. But now it's time to more directly couple that same influence with the Voting Machine that is the electorate. Politics is full of increasingly heated rhetoric, but that bubbling cauldron can be doused with the cold rationality of financial returns. The political proof is then in the profits.
sanman, Nov 19 2021
  

       I don't see any meaningful way in which this is missing, from donating to the parties, to muni bonds, to ETFs, to PACs.
theircompetitor, Nov 19 2021
  

       A donation is not an investment. Nobody donates to a company when they buy shares in it. Nobody donates money when they buy a bond. A donation is not supposed to be a financial transaction as such, whereas buying shares or bonds explicitly are.   

       Ideologically based funds would reposition money to jurisdictions, companies and assets that reflect certain ideological values and meet certain ideological criteria.   

       Ordinary retail investors can't always keep track of what the ideological disposition is of a given political jurisdiction or a given company. The fund would track that and keep readjusting accordingly.   

       The goal is to connect retail investors with market entities that reflect ideological character in a financial profit-loss environment.
sanman, Nov 19 2021
  

       I don't see enough chaff being removed to support that statement.   

       For instance, the National Enquirer still exists. The top Google searches were for Christina Aguilera and Starbucks Reusable Holiday Cups.
RayfordSteele, Nov 19 2021
  

       but ETFs do actually do what you say. and ESG investing has been a thing for years. And you don't propose any proper mechanism for how value would be assigned to the ETF. And if you think "donating" is not buying, you don't understand donating.   

       I could go on...
theircompetitor, Nov 19 2021
  

       but ETFs do actually do what you say. and ESG investing has been a thing for years. And you don't propose any proper mechanism for how value would be assigned to the ETF. And if you think "donating" is not buying, you don't understand donating.   

       I could go on...
theircompetitor, Nov 19 2021
  

       //Nobody donates money when they buy a bond//   

       Not intentionally, at least. ;-)
pertinax, Nov 19 2021
  

       I like it, A managed portfolio with a goal. Back all the companies involved with rain forest reforestation or ones aiming to place a research station at the bottom of the ocean.   

       At the state, nation level not so much. As [RayfordSteele] said, polarizing and a bit like expensive voting.
wjt, Nov 20 2021
  
      
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