Shareholder’s First Index
Profits over Politics
The Shareholder’s First Index is based on our belief that companies that solely focus on making a profit, and do not engage in politics, should do better than companies who spend time, money, and risk reputational repercussions by getting engaged in politics. The idea of politically neutral investing was first made popular in an Op Ed for the Wall Street Journal, “Is ESG Profitable” by Mike Edleson and Andy Puzder. Their conclusions:
“The data indicate that, as common sense would suggest, companies that focus on profits outperform companies that don’t. As a corollary, it seems obvious that asset managers won’t maximize shareholder returns if that isn’t their focus. It’s hard enough to generate profits and returns when that is your focus, let alone when you’re trying to change the world.”
We have since followed up on their work with an article in Seeking Alpha: “Profits Not Politics“
This concept can be applied to a portfolio of large cap US Stocks and can also be customized. We make the index available to financial advisors and individual investors.