A Global ETF For Stock Investors Looking To Support Democracies Over Authoritarian Regimes

In a world marked by escalating geopolitical dangers, wars, deglobalization threats, and illiberal government policies that harm investors, shifting money away from regimes and toward democracies is the answer to protecting international investments without compromising profits.

That's the goal of the Democracy International Fund ETF DMCY, which invests in countries relying on the Economist's Democracy Index ranking. 
"Investors can vote with their dollars to favor global democracies and reduce support to authoritarian states" states the Democracy International Fund ETF investor presentation.

Democracy International Fund ETF: Asset Allocation Strategy

The Fund's investing universe starts from the Solactive GBS Global Markets ex US Index, a large and mid-size international equity market cap-weighted index comparable to the popular MSCI World Ex-US, and then overweights democracies that embrace ideals such as freedom of speech, free and fair elections and civil liberties, while it underweights authoritarian states. 

The Democracy International Fund's portfolio reweights countries based on their score in The Economist's Democracy Index. The higher a country's democracy score, the greater the overweight in the portfolio in comparison to the Solactive GBS Global Markets ex US index, and vice versa. 

Most And Least Represented Countries In The DMCY's Portfolio: As of March 2023, the country with the largest weight in the Democracy International Fund ETF was Japan, with an exposure of roughly 16%, or about 1ppt more than the weight featured in the benchmark. U.K. equities were second with a bit more than 10% weight, followed by Canada and France with about 8%. Chinese equities are significantly underweighted, due to the country's poor democracy score, accounting for around 2% of the portfolio, that's compared to about an 8% weight in the Solactive GBS Global Markets Ex US Index.

Chart: Democracy International Fund ETF Performance Since Inception

Largest Holdings In The DMCY's Portfolio:

With a 1.86% weight, Taiwan Semiconductor Manufacturing Company Limited TSM was the DMCY's biggest single stock position. Nestle S.A. (OTC: NSRGY) came second with a 1.7% weight. 

Democracy International Fund: Key Characteristics & Facts

• Issuer: Democracy Investment Management LLC
• Inception Date: 2021-03-30
• Asset Class: 100% Equity
• Region: Global (ex US)
• Total Assets: $11.8 million as of May 19, 2023
• Management Fees: 0.5%
• Total Expenses: 0.63%
• Benchmark: Democracy Investments International Index
• Advisory Board: Jenny Johnson President & CEO, Franklin Templeton, Ken Kroner CEO of Pluribas Labs, Previously Barclays and BlackRock, Michael Levas Venture Partner, Irongate Capital Advisors Founder and Managing Principle at the Olympian Group
• Dividend Yield: 3.28%
• Forward P/E: 12.72
• Price-to-Book 1.78
• Performance since inception: -6.73% as of May 19, 2023
• Performance year to date: +8%

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