Westwood's New BFRE ETF Prioritizes Democracy Over Autocracy

Westwood Holdings Group introduced a new ETF that screens out stocks traded in countries that aren’t democratic.

Put another way, it avoids autocratic regimes.

The Westwood LBRTY Global Equity ETF BFRE enables investors to overcome risks linked with economically unstable and corrupt regimes. Rather than just excluding whole nations, BFRE is more nuanced in its approach by considering several data sources that measure global democracy.

The outcome? A portfolio that targets companies in nations that have robust institutions, civil liberties, and the rule of law.

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The ETF comes as investors grow increasingly concerned with geopolitical risks and their effect on financial markets. By screening out shares from companies in China and Russia—where political meddling will cause uncertain market action—BFRE seeks to provide a more stable investment vehicle without losing broad exposure to the market.

“Investors are increasingly seeking solutions that solve for the interconnected nature of global economies,” Greg Behar, Westwood’s Head of Managed Investment Solutions, said. “BFRE works to minimize direct and indirect exposure to authoritarian regimes while aligning with investor's goals and objectives. Traditional exclusion-based approaches often result in unintended exposures and uncompensated risks, whereas BFRE takes a more nuanced and comprehensive approach.”

As tensions between nations continue to influence world markets, BFRE offers a chance for investors to construct a more durable portfolio—a portfolio that remains diversified without increasing exposure to economic risk.

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