If you invest in an index fund, a mutual fund, or an exchange-traded fund, you probably have holdings in hundreds of different companies, some of which may be promoting an agenda at odd with conservative values.
After 25 years of experience in the field of investments, Bill Flaig decided to create Ridgeline Research to provide conservatives with investment options that align with their beliefs. American Conservative Values ETF (NYSE ticker: ACVF) is a fund to do just that. It currently boycotts the 20 politically active companies for taking positions at odds with conservative beliefs.
Flaig joins “The Daily Signal Podcast” to explain how conservatives can begin investing in companies that uphold their values and keep their hard-earned money out of the hands of companies that lean to the left.
Also on today’s show, we read your letters to the editor and share a good news story about a new children’s book series called “Buck the Chuck” that aims to teach kids about the value of freedom.
Rob Bluey: We are joined on “The Daily Signal Podcast” today by Bill Flaig. He’s the founder and CEO of Ridgeline Research, and he provides investors with a plan that aligns with their beliefs and values. Bill, thanks so much for joining us.
Bill Flaig: Thank you, good morning.
Bluey: Let’s start by talking about the mission of Ridgeline Research and how you are helping investors make those choices that align with their priorities.
Flaig: Thank you. I’ve been an investment professional for over 25 years, working in mutual funds and ETFs. And over that time period, as my career and skill set has grown, I’ve noticed a lack of product for politically conservative people.
A lot of socially responsible and ESG [environmental, social, and governance] products developing for that class of investor progressives, but nothing for us. So I finally decided to take the entrepreneurial jump and start my own company, Ridgeline Research, with the mission of giving investment products, specifically built for politically conservative investors.
Bluey: Let’s break that down into a little bit more detail. There are obviously conservatives out there who might be unknowingly supporting causes that don’t align with their values. For instance, I might be one of them in terms of my investments in certain mutual funds or index funds.
Can you walk our audience through some of the ways that that might happen in ways that we might not realize?
Flaig: Yes, that’s exactly the case. There’s this awareness that I’m trying to raise in addition to the advocacy. Anybody who’s invested in an index or a passively managed mutual fund or ETF, exchange-traded fund, that fund itself is investing in most likely … 500 or 1,000 [of the] largest U.S. corporations.
So on your behalf, essentially those funds are investing in some of the poster childs of liberal companies these days—Facebook, Twitter, the New York Times, all the major media networks.
So without knowing it, your money is being invested in those companies and with that awareness, which I’m trying to raise, I think investors, once they learn that, don’t like it and are looking for alternatives, which I’m trying to provide.
Bluey: If we could just pause for a moment and talk about index funds and ETFs, give us a primer for our audience that might not be as familiar. Can you explain what those terms mean to the lay investor?
Flaig: Sure. I’ll do my best. So a mutual fund, it’s essentially an investment product where everybody invests their money into the same mutual fund. There’s a professional management team who actively manages it or follows an index. And an exchange-traded fund is just a more recent twist on a mutual fund, where it trades on an exchange all day long, like a stock.
So a mutual fund, you can only invest in at the end of the day. ETF, you can buy any time of the day, like a stock. And you’re most likely going to see these types of products in your your retirement account or your 401k, some type of long-term investment.
Bluey: Can you talk about some of the principles that guide your work at Ridgeline Research and also how you do it in practice?
Flaig: There’s several issues that we’re trying to focus on. And right now on our website, if you go there, you can see 20 companies that we are boycotting, or we will not invest in.
It is a balancing act. If we didn’t invest in every company that has a liberal agenda or sports liberal gender, if you will, There really wouldn’t be too many companies left to invest in. That’s how far the industry has shifted to the left. So we’re just picking the worst offenders, which we’re boycotting, and we’re trying to balance performance.
So we still want to behave like an S&P 500 Index or a large cap mutual fund. You would expect it to behave and put the advocacy in, where we are avoiding or boycotting companies that support the liberal agenda. So it’s a balance between performance and advocacy. It’s not 100% ideologically pure, where we will only invest in the most conservative companies. It’s a balance.
Bluey: And in looking at your website, the boycott, which you mentioned, involves companies, some of whom you’ve already mentioned, like Facebook, as well as others like Walt Disney, AT&T, Nike. Can you explain what’s the decision-making process as to why you are boycotting them?
Flaig: Yes, we are trying to find representatives in each industry or sector of the economy. We don’t want to just boycott companies that are in technology, which a lot of the names most readily come to mind there.
Some of the issues that we are trying to focus on are companies that are hostile to conservative values or proudly liberal. The liberal media, as I mentioned earlier. Companies that disproportionately give to liberal candidates or liberal causes. We’re sensitive to the Second Amendment and suppression of religious freedom.
Bluey: The trend seems to suggest that more and more companies are taking political stands either because their leadership insist that they do or there’s public pressure to do.
As somebody who’s been involved in this world for a long time like yourself, why do you think … it’s ratcheted up so much of late? And do you see that changing now that maybe we’re past the presidential election of 2020 or is this just going to accelerate into the future?
Flaig: I think the conservative investors and conservatives in general are, it’s not a phrase I’ve coined, obviously, but the silent majority. I don’t think we really wear our political beliefs on our sleeve. And I think we’ve become more quiet as time has gone by. And I think the companies are able to pander to the left, if you will, without feeling that there’s any consequence to it. There’s some companies, Starbucks, for instance, they’re proudly liberal. If they lose market share customers because of it, that’s fine. That’s part of their business strategy. The companies that are worst are the ones who were pandering to the left. I call it greenwashing. And actually, there’s some hypocrisy there, because they’re not even delivering what they say they’re delivering to the left, but they are kind of counting on the fact that conservatives will just grin and bear it.
Bluey: So you have something called the American Conservative Values ETF. Its New York Stock Exchange ticker is ACVF. Tell us more about it and how somebody, if they’re listening to this today and they’re motivated to take action, what’s the next step?
Flaig: The ACVF can be purchased in any brokerage account. So anybody out there who is a self-directed investor and may have an account at E*TRADE, Ameritrade, Charles Schwab, they can just go into that account and buy it like they would a stock. Anybody who’s using a professional money manager would have to have that conversation and say this is a product that they’re interested in.
Bluey: And you mentioned earlier, and I think this is probably important because investors, even though they might be conservative, they also want to make sure they’re having a good return on their investment. So what are some of the steps that you take to ensure that even though you’re excluding some of these liberal-oriented companies that they’re still able to have strong performance?
Flaig: Yes. As I mentioned, we’re very cognizant of that. We try to stay as diversified as possible. We don’t want all of our boycotts to be focused in one economic sector. As I said, I’ve been in the industry for too long, 25-plus years. And [there are] actually some pretty sophisticated portfolio construction techniques that can be used to minimize the risk, the deviance from an index. And we’re employing that level of sophistication in constructing this portfolio.
Bluey: Bill, if I could ask, as somebody has been involved for so long, was there a motivating reason that you decided to embark on this path? Was there a specific incident or it’s just years of frustration that had built up?
Flaig: Yeah, it’s just been building up over time. It wasn’t really until recently that I became firmly convinced that there’s a commercial opportunity to build a company and service this audience. I think Ridgeline Research and the American Conservative Values ETF is somewhat analogous to what’s happened in the advocacy space. There’s a company Accuracy in Media, which I’m sure a lot of your listeners are familiar with. And it was launched in 1969 to combat the liberal bias in media at that time, if you think back that far. It’s kind of mind-blowing. And it wasn’t until, I’d say, the mid-1990s where Fox News came along and realized there was an opportunity rather than just from an advocacy perspective fighting what was going on, but that there’s an audience that wants conservative content, and built a network to deliver it. So Fox is maybe a little bit of a black eye these days, but from its early days, its early beginnings, I think it’s analogous to what I’m trying to accomplish with my venture.
Bluey: That’s really great to hear. And as you said, it oftentimes is a silent majority that’s out there. What have been some of the early feedback that you’ve received about the work that you’re doing? What do investors have to say about this new option that they have?
Flaig: I think there’s a couple of levels. I think some people just based on the name alone are excited and want to be a part of it. That’s wonderful and a little scary at the same time. I’m a very thoughtful person and I always do my research and due diligence. So even those people, as happy as I am to have them jump on board with both feet, I encourage them to go to the website and understand exactly what they’re doing. I’ve got a lot of people who are watching it. They want to see that … they’re not giving a performance that is behaving like the S&P 500 and that will take a little bit of time. There’s always a lag when a new company starts out, getting the message out. … I only had market research prior to launch, but these conversations that I’m having now absolutely convinced me that there’s a demand for the product. It’s really upon me and the management team to execute and get the word out. No matter how wonderful the product is, if nobody knows about it, people can’t buy it, can’t invest in it. It’s one of the reasons why I’m so excited to be speaking with you both today.
Bluey: Thank you so much, Bill. We appreciate the work that you’ve put into this. I think it’s great to have an alternative out there, great to have competition in the marketplace. That’s what we, as conservatives, believe in after all. Is there anything else you’d like our listeners to know?
Flaig: If you like the idea, not only invest in it and tell your friends, if you can’t invest in it, at least raise awareness that it’s out there for friends and family who maybe are in a position to join us and help build this community of politically conservative investors.