Why Berkshire Hathaway's stock is included in the "MAGA" ETF

Warren Buffett isn't publicly backing anyone in Tuesday's presidential election, but in recent years he's supported Democrats Barack Obama and Hillary Clinton in their White House runs.

And, as he explains in the "Highlights from the Archive" video clip below, Buffett has made sure that Berkshire Hathaway itself never spends money to support any presidential candidate. (Some subsidiaries, however, do make political contributions.) 

Even so, by the rules-based selection process of an ETF with the ticker symbol "MAGA," Berkshire is a company that is "highly supportive of Republicans."

As noted by CNN Business and Business Insider, Berkshire is included in Point Bridge Capital's GOP Stock Tracker ETF, which tells potential buyers they can "invest in companies that align with your Republican political beliefs."

It does this by tracking an index of up to "150 companies from the S&P 500 Index whose employees and political action committees (PACs) are highly supportive of Republican candidates" across the two most recent two-year election cycles.

The prospectus specifies that the most recent cycle is the one that ended on December 31, 2018.

The Center for Responsive Politics' OpenSecrets.org site shows that Republicans got most of the contributions from Berkshire employees and affiliates in every cycle tracked, but the gap has narrowed significantly in the 2020 cycle.

When it comes to the presidential race alone, however, Berkshire employees have contributed more to Joe Biden ($224,843) than Donald Trump ($195,695) in the current cycle.

Berkshire affiliates have made no contributions to either candidate.

The MAGA ETF, with around $8.2 million in assets, is relatively small, and its YTD loss of around 12% is much worse than the S&P 500's 1.2% gain.

Point Bridge Capital's founder, Hal Lambert, told CNN Business that the fund largely missed out on this year's big rally in the tech sector because those companies and their employees are generally more supportive of Democrats than Republicans.

Buffett rejects political mailer featuring his photo

Buffett did have something to say about a campaign mailer sent by a group connected to Nebraska's Republican governor, Pete Ricketts.

The Omaha World-Herald reports Buffett objected to the "anti-Native American" tone of the mailer that included his picture and a quote on casino gambling: "It's just a big loser for everyone."

The mailer opposed three initiatives on the state's ballot that it claimed would allow "Indian casinos" to be built that wouldn't pay state taxes.

Buffett told the newspaper that while while he doesn't want more gambling in the state, the "inappropriate" mailer was a racial "dog whistle."

"I would never have approved my name and photo being associated with an ad so worded."

A spokesman for the governor defended a Ricketts column that used similar language, saying there is "nothing racist" about pointing out that the initiatives, which would allow casino gambling at the state's licensed horse tracks, are "almost entirely funded by an Indian tribe."

BUFFETT AROUND THE INTERNET

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HIGHLIGHTS FROM THE ARCHIVE

BERKSHIRE STOCK WATCH

BERKSHIRE'S TOP STOCK HOLDINGS - October 30, 2020

Berkshire's top stock holdings by market value, based on today's closing prices.

Holdings are as of June 30, 2020 as reported in Berkshire Hathaway’s 13F filing on August 14, 2020 and other filings, except for Bank of America, which is as of August 4, 2020, DaVita, which is as of September 17, 2020, and Wells Fargo, which is as of August 14, 2020.

The full list of holdings and current market values is available from CNBC.com's Berkshire Hathaway Portfolio Tracker.

QUESTIONS OR COMMENTS

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-- Alex Crippen, Editor, Warren Buffett Watch