New ETF Targets Companies Rejecting Diversity, Equity, and Inclusion

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A new exchange-traded fund (ETF) is set to launch with a unique investment strategy: targeting companies that do not prioritize diversity, equity, and inclusion (DEI) initiatives. The Azoria Meritocracy ETF, spearheaded by former Greenlight Capital trader James Fishback, aims to invest in S&P 500 companies that have not embraced quantitative DEI measures.

Fishback, who has been a vocal critic of ESG investing, believes that companies prioritizing DEI have underperformed the broader market. He intends to raise $1 billion by the end of 2025 for his fund, which will focus on companies that prioritize meritocracy over diversity quotas.

The ETF’s launch event, scheduled at Mar-a-Lago, underscores its alignment with a conservative perspective on corporate social responsibility. By choosing this venue, Fishback aims to connect with like-minded individuals and garner support for his contrarian investment approach.

While Fishback’s strategy may appeal to a specific investor segment, it has raised concerns among industry experts. Some analysts question the viability of such a strategy, as it could be challenging to definitively link company performance to its DEI practices. Moreover, the success of ESG-focused funds, which have consistently outperformed the market, suggests that investors increasingly value companies that prioritize sustainability and social responsibility.

The launch of this ETF highlights the growing polarization in the investment world, with some investors seeking to align their portfolios with specific social and political values. However, the long-term success of such niche strategies remains uncertain, and investors should carefully consider the potential risks and rewards before making investment decisions.