A new exchange-traded fund is tapping into America’s emotional ties to powerful corporate leaders even as it weeds out two of its most famous tech pioneers – Elon Musk, Mark Zuckerberg.
A new exchange-traded fund, the Return on Character ETF (ticker symbol ROCI), is tapping into America’s love affair with powerful corporate leaders even as it weeds out two of the tech pioneers. most famous – Elon Musk and Mark Zuckerberg. The ROCI also excluded Adobe Inc., whose boss Shantanu Narayen was the highest-rated CEO on Glassdoor with a 99% approval score. ROCI, which launched Thursday, seeks capital appreciation by targeting shares of businesses led by “high profile” executives, according to a regulatory filing. The manager of ROC Investments LLC said the actively managed strategy uses a model based on “integrity, responsibility, forgiveness and compassion”.
Among those whose companies failed to do so: Elon Musk and Mark Zuckerberg. The first data shows that both Tesla Inc. and Meta Platforms Inc. are not included in the portfolio, while rival megacap stocks such as Apple Inc. and Amazon.com Inc – led by Tim Cook and Andy Jassy – are both among the top holdings.
Dan Cooper, portfolio manager and founder of ROC Investments, said the company’s research determines which stocks are included, a decision not based on popularity or market capitalization. He declined to comment on why Tesla and Meta were omitted at launch.
“It would be great one day if the entire Fortune 500 were on the list,” Cooper said. “I don’t consider this a static move.”
The task sounds easy, but ROCI enters one of the oldest debates in organizational management: How much difference does the CEO make?
While some dismiss the tendency to attribute a company’s success to an individual, research reveals a more nuanced aspect. Several studies highlight the damage caused by the loss of a good leader, while a high-performing executive also needs a good company to succeed.
“The business of character science is a work in progress,” Cooper said. “As a new area of research, we hope to get better and better every year.”
ETF managers use proprietary tools to analyze the public language of the CEOs of about 1,000 of the largest companies in the United States. . A full reassessment will be carried out annually.
Musk and Zuckerberg each endured controversy. The outspoken Tesla CEO has drawn scrutiny from regulators over his use of Twitter, and a 2018 tweet about taking the company private ended with a $20 million fine. la and Musk stepped down as chairman. Zuckerberg has faced a host of issues at Meta, including an investor lawsuit over concerns that the company’s social media platform is negatively affecting the mental health of teenagers.
ROCI will charge 0.49%.
“They could have a hard time raising money in the Terrordome ETF at that fee and with this strategy unless they are meaningfully more efficient,” said James Seyffart, ETF analyst at Bloomberg Intelligence. means.
