At President-elect Donald Trump ’s Mar-a-Lago Club Thursday, James Fishback, CEO and co-founder of Azoria Partners, unveiled a new anti-“woke” investment fund that will mirror the S&P 500 index except in one respect: It will not include companies he says use diversity quotas in hiring and promotions.
The Azoria 500 Meritocracy ETF will allow retail investors to vote with their portfolios and play a role in pressuring the nation’s largest companies to roll back diversity, equity and inclusion policies, according to Fishback.
“Everyone is already writing the obituary for DEI and, as a conservative and an unapologetic one at that, I would love to see DEI go to the waste bin but I am not yet ready to declare victory,” Fishback told USA TODAY. “ If I thought DEI was on its last legs and was going to be done in six months, I would not be starting this fund. I believe through my communications with these companies that they are digging in.”
Fishback’s fund is the first in a wave of efforts to cash in on the second Trump presidency.
A growing number of players are going all in on the “Trump trade,” betting that the new administration will stoke growth for certain financial assets and industry sectors.
Leading the charge is Trump's eldest son, Donald Trump Jr., who recently joined the 1789 Capital venture firm to invest in a “parallel economy” of companies and products popular with conservatives including Tucker Carlson’s media company. This week, Trump Jr. joined the board of “woke free” online marketplace PublicSquare’s parent company.
Anti-“woke” funds that espouse conservative values are not new. They are part of the broader GOP pushback against environmental, social and governance initiatives or ESG that has swept statehouses and courthouses in recent years.
Vivek Ramaswamy , who wrote “Woke Inc.,” ran one before his long-shot bid to unseat Trump as the 2024 Republican presidential nominee and his new gig leading the president-elect’s government efficiency effort with Elon Musk . But Trump's pledges to de-"woke" the private sector could breathe new life into them.
Exchange-traded funds, or ETFs , trade on exchanges and mostly track indexes such as the S&P 500 and are a popular way to diversify portfolios because they give investors the ability to buy hundreds of stocks in a single fund.
“With these new ETFs, some investors will want to buy them as a political statement, just as some investors buy other ETFs as a show of support for another cause,” University of Florida finance professor Jay Ritter said.
Investors should proceed with caution, he advised. Ideologically driven S&P 500 trackers have drawn meager investment and charge high fees.
“We will probably see some more anti-‘woke’ ETFs, but only the biggest will survive,” Ritter said. “Each year, a lot of small ETFs get closed or merged because there is not enough liquidity to attract investors and cover the costs of managing the ETF.”
Fishback, 29, dropped out of college and became a Wall Street trader. He used to work for the hedge fund Greenlight Capital and is in a bitter legal dispute with its founder David Einhorn.
He also has political ambitions. He has expressed interest in serving out the rest of Sen. Marco Rubio of Florida’s term and has said he will start a pro-Trump political action committee .
With the Azoria 500 Meritocracy ETF, Fishback is wagering that Trump’s decisive victory in November is a bellwether for the mood of retail investors.
He is looking to exert influence on corporate America along the lines of social media activist Robby Starbuck whose pressure campaigns have forced DEI concessions from large corporations such as Ford and Walmart .
Fishback pitched his fund to prospective investors as “an S&P 500 fund without the woke (expletive).” His premise: The hiring practices of the three dozen companies he excluded from the fund caused them to underperform the S&P 500.
The fund's strategy borrows from ESG funds that have been the target of conservatives for shunning investments in the oil and gas industry. Fishback said the Azoria 500 Meritocracy ETF is set to launch in the first quarter of 2025 under the ticker SPXM. He declined to say how much he has raised for the fund.
“I think we are going to have a lot of demand for what we are doing because people just want to be in the right investments,” he told USA TODAY.
At his Thursday event attended by Kevin Roberts, president of the Heritage Foundation think tank, and Dave Mazza, CEO of Roundhill Investments, Fishback singled out his first target: Starbucks , the world’s largest coffee chain whose sales have fallen over higher prices and longer wait times. When reached for comment, Starbucks denied using quotas in its hiring process.
Many business leaders who made commitments following the 2020 murder of George Floyd say they remain dedicated to DEI but they have scrutinized their investments and backed away from initiatives like hiring targets that conservatives claim are illegal quotas as the political landscape has shifted.
Women and employees of color are underrepresented at every level of power in corporate America, according to USA TODAY data investigations. One analysis in 2023 found that white men account for 7 in 10 executive officers in the nation’s largest companies. About 1 in 7 of these companies had executive teams made up only of white men.
JPMorgan Chase’s Jamie Dimon and other business leaders have repeatedly stressed that diversity is good for business and have stood by diversity initiatives that cast a wider net for talent and create environments that boost innovation.
Industry analysts who spoke with Reuters but declined to be named were skeptical that Fishback could show a correlation between a company's hiring practices and its financial performance.
Bryan Armour, ETF analyst at Morningstar, told Reuters that a small ETF may struggle to influence corporate America. "It will be really hard to gain power and influence," Armour said.
This article originally appeared on USA TODAY: This anti-'woke' investor is fighting DEI. Here's why.
