U.S. Vice President and Democratic presidential candidate Kamala Harris delivers the keynote address at the Zeta Phi Beta Sorority Grand Boulé event at the Indiana Convention Center in Indianapolis, Indiana, on July 24, 2024.
Brendan Smialowski | AFP | Getty Images
Financial experts describe Vice President Kamala Harris‘Investing style can be summed up in one word: Boring.
For a woman seeking the highest office in the United States, that also means she is relatively no financial conflicts.
As vice president, Harris filed a 2023 financial disclosure report, signed in May. The report shows she prioritized passively managed index funds in her portfolio.
“To me, it’s interesting that it seems so passive,” said Dustin Thackeray, a licensed financial analyst and chief investment officer at Crewe Advisors in Salt Lake City, who reviewed Harris’ disclosure.
“She certainly had no intention of trading any inside information,” Thackeray said.
Carolyn McClanahan, a certified financial planner and founder of Life Planning Partners in Jacksonville, Florida, who also reviewed Harris’ financial disclosure, said she was “pleased” to see Harris investing in low-cost passive investment strategies.
“To me, she has the cleanest portfolio you’ve ever seen in a politician,” said McClanahan, who is also a CNBC contributor. Financial Advisory Board.
“She owns a bunch of index funds; there’s no way she could game the system,” McClanahan said.
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Harris’ disclosure comes as members of Congress debate whether elected leaders should be limited in the types of investments they can own.
A group of senators is pushing a bill that would prohibit members of Congress — as well as their spouses and dependents — from buying certain investments like individual stocks, as opposed to diversified mutual funds or Treasury securities. While one The Senate committee voted This week to approve the bill, it remains unclear whether it will ultimately become law.
In addition to Harris’ preference for passive investing, the disclosure reveals more about her financial circumstances that could be instructive for other investors, according to experts who reviewed the document.
Too many funds
Harris listed eight different funds she invested in as part of two separate 457(b) deferred compensation plans during her time working in California, in addition to participating in several defined benefit pension plans.
At the same time, her husband, Second Gentleman Douglas Emhoff, listed more than 30 mostly passively managed fund investments.
Notably, the disclosure only lists certain asset ranges for each fund, rather than specific investment amounts.
Experts who reviewed Harris’s documents said the couple could cut the amount of money they owned and thus reduce any overlapping risks.
“She’s very well diversified, even more so than she should be, owning multiple funds that have similar portfolios, just different weightings,” said Barry Glassman, a certified financial planner and founder and president of Glassman Wealth Services.
Glassman is also a member of CNBC. Financial Advisory Board.
McClanahan also said the couple may reduce the amount of money they own.
“They could consolidate, simplify things,” she said.
Thackeray, who has encouraged his clients to consider more foreign investments, said portfolios include allocations to foreign stocks and fixed income funds. He said there may be less expensive opportunities outside the United States, where investments have become more expensive in recent years.
While Harris’ disclosure lists a lot of buying and selling during the year, mostly in lower dollar ranges, that could just be the result of quarterly rebalancing, Thackeray said.
How those transactions impact the couple’s tax bill depends on whether they take place inside or outside their retirement accounts.
It is unclear whether Harris and Emhoff work with financial advisers. Harris’ office declined to comment.
Cash on the sidelines
Harris and Emhoff also revealed that the cash holdings could be as much as $850,000 or more, depending on the exact balance based on the ranges given.
Having such a large cash cushion as a buffer is normal for his clients these days, Thackeray said.
“The good thing about cash balances now is that they actually generate investment returns, which was not the case in the years before interest rates rose,” Thackeray said.
However, since investors have to shop around for the best interest rates themselves, there is no guarantee that Harris and Emhoff will earn the best possible returns.
“I expect all that cash in the bank to be earning attractive interest,” Glassman said.
Adjustable Rate Mortgage
Harris lists the 2020 mortgage rate at 2.625% for a personal residence valued at more than $1 million to $5 million.
But the problem is that this is a 7-year variable rate mortgage, which means the low interest rate won’t last. Variable rate mortgages typically offer an initial fixed interest rate that expires after a set period of time, then changes annually.
Mortgage rates have risen significantly since 2020, meaning the couple missed out on locking in low rates for longer.
McClanahan said she urged people to lock in the record low mortgage rates available at the time.
“I would personally lock in a long-term mortgage at that point,” Thackeray said.
McClanahan said while the couple will likely be in shock by 2027, they can always refinance or pay off their mortgage.
Thackeray said mortgage rates could be lower in 2027 than they are today.
Extra ‘side’ income
Harris also listed more than $8,000 in royalty income from 2019. her children’s picture book, “Superheroes Are Everywhere,” as well as a smaller amount from her 2019 memoir, “The Truths We Hold.”
While the income isn’t a lot of money, it’s a great example of how a side hustle can contribute to a household’s net income, according to Ted Jenkin, a certified financial planner and CEO and founder of oXYGen Financial, an Atlanta-based financial advisory and wealth management firm. Jenkin is also a CNBC contributor. Financial Advisory Board.
Beyoncé Tickets
Harris is using Beyoncé’s song “Freedom” as her campaign song.
Harris, however, was a Beyoncé fan long before she picked that song, according to her latest financial disclosure. In 2023, Harris was gifted tickets worth more than $1,600 to a Beyoncé concert. The listed source for that gift: Beyoncé Knowles-Carter.
