Betting on an EU breakup? Soon, an ETF for that

Want to invest in the breakup of the EU, or Donald Trump’s tax reforms, but don’t know where to start? Soon, it may be as easy as buying an ETF.

A Missouri-based firm called Active Weighting Funds ETF Trust has filed a prospectus with the SEC for four thematic ETFs that would gain on shifts ranging from a Democratic victory to an EU breakup.

Below are highlights of the four ETFs, as proposed by the company. All would be actively managed instead of tracking an index.

European Union Breakup Fund

This fund aims to capitalize from periods “when the European Union is becoming less centralized due to member countries considering abandonment of the euro or withdrawal from the union,” the prospectus says.

It would invest in securities likely to be affected by changes “that represent a move toward a breakup of the EU,” the prospectus says.

It adds: “The [fund’s] Advisor identifies EU Breakup Themes based on its analysis of regulations affecting the way members interact and trade, members abandoning the euro currency or withdrawing from the EU, and dissolution of the bloc as a political and/or economic union.”

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U.S. Tax Reform Fund

This ETF would invest in securities “expected by management to be affected by proposed changes in U.S. tax policy and regulations that change the way taxable income is calculated […] regardless of whether the change increases or decreases the tax burden on individuals or companies,” the prospectus says.

The fund manager would analyze current tax reform policies and proposed bills to determine the current shape of tax reform themes and “understand details regarding credits, deductions, and income sourcing rules.”

Republican Policies Fund

The proposed ETF has the objective of investing “in a manner that will seek capital appreciation during periods when the U.S. government is operating pursuant to Republican Policies”—that is, when Republicans have power.

“In its fundamental research and security selection process, the Advisor searches for sectors and issuers that it views as directly exposed to current and forecasted Republican Policies,” the prospectus says.

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Democratic Policies Fund

This ETF takes the same approach as the Republican fund but seeks to capitalize on to Democratic policies. Like the Republican fund, the Democratic fund would not be hedged for opposing political party positions. “Government action that is not aligned with Democratic Policies may negatively impact the Fund’s portfolio,” the filing warns.

Read the full prospectus here.

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