The Daily Signal - INTERVIEW | Tom Carter Has an Investment Fund for Conservatives

Starting point is 00:00:00 We try to give investors the best returns we can without exposing them to companies that we believe are hostile to conservative values. This is the Daily Signal podcast for Monday, November 28th. I'm Rob Blewey. And that was Tom Carter, president of Ridgeline Research. At a time when conservatives are fed up with woke corporations and seeking alternatives, Carter is offering an investment option that boycotts more than 30 companies hostile to conservatives. The American Conservative Values ETF was created to help conservatives avoid putting their money in an index fund, a mutual fund, or an exchange-traded

Starting point is 00:00:41 fund, at odds with their values. We first told you about it two years ago on the Daily Signal podcast. Today, Carter brings us up to speed on the latest developments. And just a reminder for all of our listeners, neither the Heritage Foundation nor the Daily Signal provides investment advice. All of

Starting point is 00:00:57 the material in this interview is presented solely as educational information, not as an endorsement of Ridgeline research or ACVF. We recommend that you seek advice of a financial advisor in connection with all investment matters. There are risks associated with any investment, and past performance is not indicative of future results. Now stay tuned for today's interview coming up next. Virginia Allen here, I want to tell you all about one of my favorite podcasts. Heritage Explains is a weekly podcast that breaks down all the policy issues we hear about in the news,

Starting point is 00:01:34 at a 101 level. Hosts Michelle Cordero and Tim Desher mix in news clips and music to tell a story, but also bring in heritage experts to help break down complex issues. Heritage Explains offers quick 10 to 50 minute explainers that bring you up to speed in an entertaining way. You can find them on Apple Podcasts, Google Play, Spotify,

Starting point is 00:01:57 or wherever you listen to your podcasts. We even put the full episode on YouTube. We are joined on the Daily Signal. podcast today by Tom Carter. He is president of Ridgeline Research, which provides its customers' unique investment opportunities based on shared values and purpose with the goal of making an impact. Tom, welcome to the show. Hi, Rob. Thank you for having me. Appreciate it. Well, our listeners who pay close attention to the Daily Signal podcast will recognize the name Ridgeline Research because we've previously featured you on this podcast, and we're glad to have you back with us today. For our listeners who might not be familiar with your work or may have missed that earlier conversation, Can you bring us up to speed on Ridgeline research and some of the things that you're doing? You bet. So Ridgeline Research is the investment advisor to the American Conservative Values Exchange Traded Fund.

Starting point is 00:02:50 And that ticker symbol is ACVF. And what that particular fund does is we try to give investors the best returns we can without exposing them to companies that we believe are hostile to conservative values. So we exclude companies in our portfolio that may be hostile to conservative values, companies that are on social media like Twitter and Facebook or meta that don't allow conservatives, you know, the same exposures as they might, the other side, companies in the media itself, you know, like Comcast, who owns MSNBC, we exclude them as well as the New York Times. So essentially we're trying to replicate the performance of the S&P 500 as best we can while excluding companies that we believe hostile to conservative values.

Starting point is 00:03:42 Well, thank you for that. We appreciate it. You bring decades of experience helping to grow and manage complex businesses. You also are a proven ETF and mutual fund executive. Tell us about ways that individual investors can go about engaging with Ridgeline research and take advantage of the opportunities that you're you're offering them. Well, certainly. You know, the best way to do it is you buy ETFs through a brokerage account and you can buy as few as one share or you can invest a fairly significant amount of money if you choose by buying ACVF with your broker or if you are

Starting point is 00:04:20 self-directed in your broker's account. You know, that could be a Fidelity account. That could be a Schwab account, whatever you have. And, you know, if you have an S&P 500 fund, again, you are exposing yourselves to companies, if you are conservative, that you may not share their beliefs and ideals, or certainly they don't share yours. And so by accessing ACBF, you are investing alongside other conservatives, and you are not exposing your particular hard-earned investment dollars to companies, again, that don't share your values. So we think it's a great opportunity to expose yourself to the broader market, large cap funds, and yet not be giving your money. to corporate media, to social media, to people that don't share, again, your values.

Starting point is 00:05:08 And I will continue to hit that point as in the fact that, you know, we think this is a good way to show what you believe in by investing your hard-earned dollars in places that, again, share your values. And if I'm not mistaken, yours were the first family of ETFs for ideologically conservative investors. what inspired you and the others there to decide to set upon this path and make this available to investors who really do have those values in mind when it comes to their investing? Yeah. So interestingly enough, you know, I've been in the ETF business, as you mentioned earlier, for going on 25 to 30 years. And I left the company that I was with where we had a very successful ETF business, took some time off. And my partner reached out to me and he said, look, there are.

Starting point is 00:05:58 are a lot of opportunities to invest in ESG. And ESG in our mind being anti-fossil fuels, green energy, things such as that. But there aren't many opportunities for people of the politically conservative side to invest there. And I agreed with them. And there's a couple of ways we looked at doing this fund. We looked at potentially doing a bottom-up research-driven fund where we only selected conservative companies and tried to build the portfolio that way. What we decided was better is to start with a more S&P 500 type fund, which is large cap, which a lot of people have exposure to, and eliminating companies in that S&P 500 that we felt were hostile to conservative values. And we thought that was a bit more of wallet share. We also thought it was going to give you

Starting point is 00:06:52 more predictable performance. And although, you know, large cap stock, have performed poorly over the last year. We all know that for a myriad of reasons. But we are still, as of September 30th, our last quarter end, since inception, year-to-date, and one year outperforming the S&P 500 while not investing in almost 30% of the cap-weighted stocks in the index. So eliminating Google and Amazon and Apple and meta and those haven't heard our performance. In fact, we've again performed right in line and actually beaten the S&P 500 since inception. Well, congratulations. That's great news, particularly those listeners who are looking at a variety of different investment options. Again, it's called the American Conservative Values ETF, and we'll be sure to provide a link in the transcript,

Starting point is 00:07:48 both to the website for Ridgeline Research and the fund itself. You've now had a couple of years of experience, as you indicated. what are some of the lessons that you've learned? What are some of the changes that you've made to adapt, probably to both consumer demand, but also these changes that we see over the market over that period of time. Sure. Interestingly enough, our changes in the portfolio are primarily driven by things that happen where companies are involving themselves in the political arena.

Starting point is 00:08:16 I'll give you one example in January of 2021, Georgia passed election laws. and, you know, we feel our opinion is that they were very reasonable election laws. That being said, several companies in the state of Georgia went to the Georgia state legislature and tried to get them to change those laws or repeal those laws. And Coke was one of those companies and Delta was one of those companies. And at that time, we evaluated that and we actually took them out of our portfolio because we felt like they were getting into broader politics, which we don't believe companies should do. So that's an example of when we made a proactive change to the portfolio.

Starting point is 00:08:58 Something that just actually happened recently, in fact, it just happened in the last couple of weeks, is PayPal came out. And PayPal was going to find people that they believed were propagating misinformation on Twitter or Facebook or other social media. And although they've reversed course, we certainly thought that that was an indication of where PayPal had. exists. And we didn't think that PayPal should be the arbiter of what is good or bad information. And so we boycotted them or divested in them in our portfolio as well. So we're monitoring things that are happening in the political arena. We're monitoring companies' responses to things that are happening in the political arena. And we could add companies that maybe move to the right. And we certainly will take companies out of the portfolio that we feel

Starting point is 00:09:52 are moving to the left or expressing those ideas that we think are hostile to conservative values. Now, as you're making those decisions about which companies are hostile to conservative values, are you surveying your shareholders? What type of interaction do you have with the investors themselves, perhaps either first-hand experience they've had with companies or other information that they might be passing along to all of you? You bet, Rob. That's a great question.

Starting point is 00:10:20 In fact, we do survey. Our shareholders, and we also survey not only our shareholders, but, you know, we have an email list and a list of people that follow our research and follow our material. And we have roughly roughly 4,000 folks that we reach out to, I'm not going to tell you it's on an exact quarterly basis, but we try to do it on a quarterly basis. And we survey them about companies that they feel are hostile. And, you know, Facebook or a meta, you know, I can't. keep saying Facebook because that's what the retail name is, but Meta is what it's changed its name to under its equity symbol. They have always been the number one company that our investors think is hostile to conservative values. Interestingly enough, our last survey, which was done in the

Starting point is 00:11:13 summer this year, Disney actually jumped over Meta to become the company that our conservative investors feel are, it was most hostile conservative values. And another one that ran up the list significantly was BlackRock. And, you know, BlackRock is doing a lot in the ESG space. They are trying to force people to invest in ESG. And if they don't, BlackRock will not invest in those companies. I think you've seen recently in the news, states like Louisiana and Missouri are moving some of their state treasury dollars out of Black Rock for those reasons. And so interestingly enough, conservative investors have picked up on that. And Disney and Black Rock have both become negative to politically conservative investors.

Starting point is 00:12:05 And I will reiterate, those are two companies that have never been in our portfolio. And we happen to agree with our constituents on that. And for our listeners who would like to learn more, you have a, list on the ACVF website of the companies that are most hostile to conservative values. I think you have about 31 of them right now, including some that you've just recently updated. You mentioned PayPal. You also have Visa on there. Netflix was added to the list earlier this year.

Starting point is 00:12:32 So for our listeners who do want to see the full list, we'll provide a link to that. But share a little bit more about the companies on the list. And I'm most curious, are there things that they can do to get back in the good graces of conservatives and maybe have you reconsider whether or not they're actually on this hostile list. You bet. I'll give you two examples of companies that were on our hostile list and we have turned them around and put them back in the portfolio. One being Wells Fargo, you know, Wells Fargo got in some trouble where people were people at the bank were doing some unethical things, opening customer accounts and whatnot. We feel like they've corrected that. We certainly hope they

Starting point is 00:13:15 have. There's evidence that they have. And so we put them back into the portfolio. That's one example. Another one, and this is an interesting one, AT&T, and a lot of people didn't realize this, AT&T owned CNN for quite some time. And recently AT&T got rid of CNN. They sold them to Discovery. And so when AT&T divested in CNN, and of course, you know, most political investment, investors believe that CNN is hostile, and we do as well. When AT&T divested in CNN, we brought AT&T back into the portfolio. So as I mentioned earlier, you know, big corporate media is always in the target of conservatives and conservative investors. And so CNN was certainly not something we wanted to invest in. I mentioned MSNBC earlier with the Comcast owning them. You know, ABC and

Starting point is 00:14:13 Disney are both owned by Disney, and of course, Disney has its other problems. So certainly corporate media is something that we do not want to invest in, and we will monitor companies who invest in corporate media and take them out of the portfolio. Well, thank you for explaining that, and glad to see that you're re-evaluating, and there have been some positive developments on that front. I also understand you're getting more involved in shareholder activism. First of all, explain to our listeners what that means. and what are some of the steps that you've taken so far to hold companies accountable through

Starting point is 00:14:48 that means? Certainly. So shareholder activism is an interesting process whereby, you know, if you own a certain amount of a company for a certain amount of time, you can propose things on what they call their proxy. And it's certain things that the company and its board can react to. And there's a shareholder vote, actually, on those proxies as to whether they will accept your, accept your request or not. Our, we have put in a proxy request to our largest holder,

Starting point is 00:15:19 Microsoft, and we have asked them to explain their diversity and inclusion program, a bit more transparency and a bit more financial data on how that is performing and how that is helping the shareholder. From our perspective, although we are not against diversity, but we are, we are against mandated diversity, right? We are against things that say you have to be diverse and you have to hire somebody of a particular color or creed instead of hiring the best person available for that job. We're not sure if Microsoft is doing that and we would just like some more transparency, not only financial, but also how that is helping the underlying shareholder and how that is bettering Microsoft as a company overall. So we have proposed that. We are not sure if we will make it

Starting point is 00:16:08 onto their ballot or not, but certainly if we do make it on the ballot, we will announce that and we will talk more about what we plan to do there. We're certainly looking at other companies that are doing things like that. Critical race theory is something that we hear a lot about that companies are engaging in, and we don't think that should be happening. Again, companies should be trying to provide the best product or service for their customer or consumer, and they should also be trying to increase the value for their shareholders of that company. And we think getting outside of your lane when trying to do those two things is not good for business. And so we will challenge companies on the things that they are doing from a political perspective.

Starting point is 00:16:54 Well, you said that well, Tom, and I certainly personally agree with you on that. But as we've seen more and more companies are moving in this troubling direction, what are some of the reasons that you attribute to that? And are there certain people who have an agenda or that we should be paying attention to on the left or in other areas that are concerned for those of us who hold conservative values? You know, it's an interesting question, Rob, and we debated internally as well. And we think it's a reaction to a very small percentage of Americans that seem to be the loudest on the left.

Starting point is 00:17:26 And we think most what I'm going to call normal Americans, and that's not saying that those people on the left aren't normal. But we think most middle America people believe that companies. should just do their job and not get into these critical race theories and things like that, but that companies are reacting to a very loud minority and no one wants to get canceled. And the canceled culture has crept into the boardroom and I think into the sea suites as well, where, you know, nobody wants to be called out for the things that they're doing. And so they move too far left in our mind and they get involved in things because they're afraid to be called out.

Starting point is 00:18:06 And I think CEOs are going to realize that that's a mistake in the long run and that, you know, middle America and normal people just want companies to do their job and they just want them to stay out of politics. I hope we can get back to that point as well. Along those same lines, though, you mentioned this earlier. There is something known as ESG and environmental social governance. It's an agenda that advances issues and ideas that are, again, opposed to many of the conservative values that we believe in. Tell our listeners about ESG and how it factors into some of your decision-making there at Ridgline Research. Certainly. Yeah, so ESG, and like I said, you know, when we developed this fund, it was basically, and I don't want to call it an anti-ESG fund, but it was more of a pro-conservative fund because ESG was, you know, anti-fossil fuels, and we certainly are not. Do we believe in clean energy? We do. Do we believe that we have enough clean energy to run our country right now? We do not. And so, you know, the administration's attack on fossil fuels we don't like. Black Rock's attack on fossil fuels we don't like. We think America needs to be energy independent, and we think these ESG policies hurt America being energy independent. And it adds to inflation, frankly, right? If you're shutting down the supply side of anything, and the demand stays where it is, it's going to make that product more expensive.

Starting point is 00:19:41 And so the shutdown of fossil fuels, the shutdown of exporting, fossil fuels, a shutdown of pipelines coming from Canada into our country and not giving us the ability to use some of that energy that is being created in Canada. All those things add to us not having energy independence. They add to inflation. They add to our reliance on foreign governments that we don't necessarily get along with. I mean, there's a lot of negative impacts and ESG is a start of all this because there's so much money going into green energy and renewable energy. And again, we're not against that. But what we are against is forcing people to do that even when we're not creating enough energy to run our country.

Starting point is 00:20:30 And we think, you know, in the long run, some of these green energy things certainly will work. And economically, they should. but the market should decide where that's coming from, not the government, not BlackRock. Money should flow to where things are working. Money should flow to where things can make money. And there shouldn't be government subsidies and there shouldn't be companies that are forcing people, forcing ESG or clean energy on people like is happening now. So we are against that.

Starting point is 00:20:58 And so we exclude BlackRock from our portfolio for that reason. And certainly we invest in the energy markets. Are you encouraged that some state treasurers are taking action by excluding some of these companies like BlackRock from state pension funds or other investments that they have control over? Of course. And we're encouraged that there's been, frankly, other entrants into this conservative investing landscape as well. I think, you know, a rising tide lifts boats and I think making people aware that there are, companies that are using your dollars to go out and make sure that their political views are being expressed? I don't think you want to do that. And, you know, Louisiana said, look, BlackRock's

Starting point is 00:21:50 trying to shut down fossil fuels. And Louisiana is very dependent in its economy on fossil fuels. So it makes a lot of sense that they're saying, look, you're trying to shut down something that is important to us, and you're using our money to do that. And that's not good for the state of Louisiana, so we're going to pull our money from you. And I think others are going to realize that. And I think the information getting to people is very important that those types of things are going on in corporate boardrooms. Tom, a couple more questions for you. Inflation continues to dominate the headlines. It's a persistent problem for the Biden administration. Many of their policies, I think, are directly attributable to what we're seeing as a consequence.

Starting point is 00:22:33 but how has inflation affected not only the markets but the future in terms of how people think about investing? Well, well, certainly inflation is a big problem. And anybody with any basic understanding of economics understands that you can't just produce and create more and more dollars and put them into the marketplace and that it's not going to devalue the dollar and make things more expensive. Like I said, it's basic economics. The fear is, you know, that inflation runs through consumers. Consumers buy less. It hurts the overall economy.

Starting point is 00:23:10 You know, we've seen what's happened in the housing market. It has slowed down because of interest rate increases by the Fed to slow inflation. So that impacts the overall economy. Now we're talking about recession. When recessions happen, companies don't hire as much. They don't buy as many goods. The whole economy slows down. So inflation is a, and you know, a small amount of inflation is normal, and we all understand that, but significant inflation, which we all predicted would come in, is going to hurt the overall economy. It's going to hurt corporate earnings in the long run. And so we see it inflation is bad. We hope that the market's built in some of the recession already. And I'm not predicting that we're our lows, but I'm hoping that it's built in and predicting that, you know,

Starting point is 00:24:00 maybe after the next quarter, we'll see some increase in some markets again. But I think it's going to be bumpy for a while. And certainly inflation has something to do with that. Tom, thanks so much for spending time with us today. I hope our listeners are inspired to learn more and seek out more information on your website about the fund. Tell us how they can take that first step to get involved, whether they want to invest or even just learn more about these companies that are hostile to conservative values. Sure, you can go to investconservative.com and pull up all of our information.

Starting point is 00:24:36 We have our fact sheet on there, which will let you know what companies we exclude from the portfolio and tell you a little bit more about the statistical information of the fund. It's got performance on there as well. Or you can talk to your broker if you have one and ask them about ACVF and let them do some research for you. And if you're a self-directed person, you know, all the information about the fund is is on Schwab, it's on Fidelity, it's on TD Ameritrade, and all those that most people use. So, and by the way, we're always open to talking and having conversations with shareholders reach out to us directly, and we'd love to let you know what we're doing.

Starting point is 00:25:17 Well, again, for our listeners, we'll be sure to provide links for more information in the transcript of this interview. Tom, thanks so much again for your creative ideas, for walking us through some of these complex issues that certainly we're dealing with as conservatives and trying to grasp and understand how corporations have moved in this direction. And I appreciate that you're holding them accountable and giving us an alternative for our investments. Rob, thank you so much for having me. I appreciate it. And hopefully we will speak again. And that'll do it for today's episode. Thank you for listening to The Daily Signal Podcast.

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The Daily Signal - INTERVIEW | Tom Carter Has an Investment Fund for Conservatives

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