As its name suggests, Democracy Investments is “laser-focused on democracy,” CEO Julie Cane told NYSE’s Judy Shaw at Exchange 2023.
See more: “Democracy Investments Launches New International ETF, ‘DMCY’”
“Our strategy has set out to reverse the trends of over-allocating to authoritarian states,” Cane said.
Democracy Investments developed its strategy “over two years ago… to over-allocate to democracies and under-allocate to authoritarian states.”
“Since that time, geopolitical events have reinforced our theory that democracy is a safer place for investing,” Cane added.
The Democracy International Fund ETF (DMCY) is an international mid- and large-cap fund that “tilts towards democracies.” The fund seeks to track the total return performance, before fees and expenses, of the Democracy Investments International Index. The Index weights democratic countries higher and authoritarian countries lower.
The index overweights democracies that embrace ideals such as freedom of speech, fair elections, and civil liberties. It underweights authoritarian states with links to human rights abuses. These include genocide, child labor, media censorship, judicial corruption, and a lack of free and fair elections. DMCY intends to support investors to incentivize democracy by shifting capital towards democratic countries and away from authoritarian countries.
“Instead of following the pure market-cap weighting, we are both market-cap and democracy weighted,” Cane said. “So, investors can enjoy international exposure while supporting democracies.”
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