ETF Discussion

Every week someone says "just buy NANC" or "just run the Pelosi Portfolio on Autopilot and you're set." So I read the actual prospectuses, dug through the academic literature, and backtested the trades myself. Short version: these aren't scams, but they structurally can't deliver what people think they're buying — and the long-run evidence is a lot weaker than the hype.

They exclude the options — which is where the returns actually come from. Both ETF prospectuses say, word for word, that the fund "will exclude transactions in the securities underlying of any reported options contract trades." Autopilot's own FAQ: it "does not invest in crypto or options." So when Pelosi files long-dated NVDA calls, none of these products replicate it — they skip the trade entirely. I backtested her portfolio two ways: with her real options leverage it returns ~20%/yr and beats the market by ~6 points. Treat those exact same trades as plain stock and it drops to ~9.5%/yr and lags the market by ~4 points. The leverage is the edge — and it's the one thing these products are built to drop.

The "edge" is carried by a tiny handful of people. Across every member's disclosed portfolio, about 86% underperform the market on a risk-adjusted basis. A fund that buys "what Congress buys" is averaging a few outliers into a herd that mostly loses to the index.

They're brand new and have never seen a bear market. Both ETFs launched February 2023 — after the 2022 crash. And even in this ideal bull-market window, the Republican fund (KRUZ, now ticker GOP) has actually underperformed the S&P since inception (about 19.1% vs 22.0% annualized). If copying Congress were a real, durable edge, it wouldn't vanish the moment you switch parties — that tells you it's mostly a mega-cap-tech sector tilt, not insider genius.

Over decades, the academic record is weak-to-negative. The famous Senate study found a real edge in 1993–1998; the House follow-up found a much smaller one. A 2013 reexamination ("Capitol Losses") concluded the average member would've done better in a passive index fund. And the post-2012 study — after the STOCK Act sped up disclosure — found members' buys actually underperformed, "consistent with random stock picking."

And you're always a month late. Straight from the prospectuses' own "Reporting Delay Risk" section: members have up to 45 days to file, so the fund "will not purchase or sell securities at the same time as members of Congress." Stack on fees — NANC 0.73%, GOP 0.80%, Autopilot ~$100/yr per portfolio — versus ~0.03% for a plain index fund.

The point isn't "these are bad." It's that no off-the-shelf wrapper shows you the real picture — they keep the beta, drop the leverage, dilute the few good traders into the many bad ones, and lag the filings. The filings are public. If you actually care about this stuff, read the individual trades yourself — stock vs options, the strike price, the timing relative to the committees they sit on — and form your own read. A black box that strips all of that out and charges you for it is the opposite of an informed decision.

Sources in a comment below — don't take my word for any of it, read them yourself.