📈The STRIVE 500 ETF: Profits Over Politics in Action

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Today, we are exploring an ETF that has been gaining attention not only for its strong performance but also for its bold approach to corporate governance and shareholder rights. Introducing the STRIVE 500 ETF (STRV) – a large-cap fund that is challenging the conventional passive investing strategy by blending the efficiency of index funds with activist shareholder principles.

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What is STRV?

STRV is a passively managed ETF that aims to provide broad market exposure to 500 of the largest publicly traded stocks in the U.S. What sets this fund apart is not only its portfolio but also how it leverages its ownership stake to influence corporate America.

Strive Asset Management is dedicated to shareholder primacy, believing that a for-profit company's primary goal is to maximise long-term value for its investors. Founded in 2022 by Vivek Ramaswamy and Anson Frericks, Strive aims to uphold the core principles of American enterprise—where value is earned and innovation thrives. The company positions itself against the perceived overreach of ESG investing, which it sees as prioritising stakeholder interests over shareholder returns.

STRV, Strive's flagship fund, offers concentrated exposure to large-cap U.S. corporations through a cost-effective index product that tracks the Bloomberg US Large Cap Index, which includes the 500 largest U.S. companies. Unlike the S&P 500, Strive is committed to empowering its shareholders.

STRV employs Corporate Governance practices, such as voting proxy shares and engaging with management teams, to unlock value often missed by traditional passive funds. The fund actively ensures that these companies prioritize delivering returns for shareholders.

Investment Strategy📊

For ETF investors looking to incorporate STRV into their portfolio strategy, there are several compelling approaches to consider:

• 🏰Core Holdings Strategy: STRV can act as a key large-cap equity holding, similar to how many investors utilise SPY or VOO. With a low expense ratio of 0.05%, it is competitively priced compared to other large-cap index funds. You may want to consider allocating 30-40% of your equity exposure to STRV as your primary large-cap investment vehicle.

• ⚖️Governance-Focused Allocation: For investors seeking exposure to shareholder advocacy, STRV can complement traditional ESG-focused funds or serve as a counterbalance to them. Consider pairing STRV with small-cap value funds and internationally developed market funds to create a well-rounded equity portfolio that emphasises shareholder rights across market segments.

• 🛰️Tactical Satellite Position: More adventurous investors might use STRV as a 5-10% satellite holding alongside their core index fund positions. This approach enables you to express a preference for shareholder primacy without completely abandoning diversified exposure through traditional broad-market funds.

• ⏳Dollar-Cost Averaging Vehicle: STRV's low fees and broad diversification make it an excellent candidate for systematic investment plans. The fund's focus on long-term value creation aligns well with the patience required for successful dollar-cost averaging strategies.

STRV at a glance

ETF Issuer: Strive Asset Management

Inception: 2022-09-15

Asset Class: Equity

Underlying Index: Bloomberg US Large Cap Index

Geographical Focus: U.S.

Expense Ratio: 0.05% (as of last data point)

Dividend Yield: 1.11% (as of last data point)

Distribution Frequency: Quarterly

Historical Performance

Since its launch, STRV has achieved an annualised return of 8.35%, demonstrating that its shareholder advocacy approach does not compromise competitive returns. The fund has attracted significant investor interest, with approximately $895 million in assets under management. This growth indicates that investors are aligning their investments with Strive's philosophy.

ETF Radar View

The radar chart below shows the general characteristics of the ETF:

Top 3 Reasons to Invest

1. Active Ownership with Passive Efficiency: STRV combines the low costs and broad diversification of index investing with active corporate governance. You gain exposure to large-cap companies while the management team advocates for value-maximising policies, potentially unlocking additional returns that passive funds may miss.

2. Competitive Cost Structure: STRV has a low expense ratio of 0.05%, making it competitive with major index funds. You're not paying extra for Strive's governance activities, which are included at no cost. This makes STRV a convenient option for those holding traditional large-cap index funds.

3. Clear Investment Philosophy: STRV stands out from other funds by having a clear mandate: to maximise shareholder value. This consistency provides investors with predictable support and minimises style drift, ensuring you know exactly what to expect from the fund managers.

Top 3 Reasons Not to Invest

1. Potential Political and Reputational Risks: Strive's strong opposition to ESG principles and focus on shareholder primacy may become risky if the political landscape changes or if regulatory scrutiny on shareholder activism increases. While this stance may attract some investors, it could also limit appeal and lead to volatility from non-financial factors.

2. Relatively Short Track Record: Launched in 2022, STRV hasn't been tested through a full market cycle or major economic downturn. While its performance has been strong, investors lack the long-term data that would help assess how the fund performs during different market conditions. The corporate governance approach is also relatively untested during bear markets.

3. Opportunity Cost of a Specialised Approach: By focusing on shareholder primacy, STRV may miss out on investment opportunities in companies that prioritise stakeholder value. Research shows that strong ESG practices often lead to better long-term financial performance, suggesting that STRV's approach could limit its potential benefits.

🎯STRV: The Anti-ESG Fund That's Actually Winning

The STRIVE 500 ETF is not just another large-cap index fund; it reflects a commitment to what corporate America should prioritize—excellence over politics. STRV allows investors to align their portfolios with their principles while still gaining broad market exposure.

STRV delivers value through low costs, strong performance, and active ownership. While it may not fit every investor or portfolio, it offers a unique alternative to traditional passive investing. The key question is whether its shareholder-first philosophy aligns with your investment goals. For those who believe that prioritising shareholder value benefits all stakeholders, STRV provides a meaningful opportunity to act on that belief.

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DISCLAIMER: This article is for informational purposes only and should not be considered as investment advice. Always conduct your own research and consult with a financial advisor before making investment decisions.