Sometimes a values-based investment strategy means admitting when you got the timing wrong. The American Conservative Values ETF (ACVF) has welcomed Tesla, Inc. (TSLA) and Paramount Skydance Corp. (PSKY) back into its portfolio following a high-profile boycott, a risk management review earlier this month, and a subsequent portfolio rebalance.
The actively managed ETF, which oversees more than $135 million in assets, had avoided investing in Tesla earlier in the year, believing that Elon Musk's increasing political engagement was adversely affecting the company's shares. But as Musk has distanced himself from political activism and Tesla's stock has started to recover, ACVF decided to repurchase the shares, albeit with a hint of hindsight-induced regret.
A Costly Learning Experience
One of ACVF's co-founders, William Flaig, acknowledged the experience reinforced the fund's thesis that politically motivated activity can create real financial risk, even if the timing proved costly. The fund missed Tesla's subsequent rebound after exiting the position, and Flaig described it as a learning experience rather than a victory to celebrate.
ACVF also ended its boycott of Paramount after ownership and leadership changes, especially at CBS News. Co-founder Tom Carter said his company was ready to re-evaluate its investments in the firm after what it considers significant changes at the top. While many corporations appear to be softening prior ideological stances, Carter emphasized that ACVF looks for tangible shifts in leadership before reconsidering an investment.
Values-Based Screening in Action
Created to help portfolios align with conservative values, ACVF implements a screening process to exclude companies it believes are engaging in ideological activism. Those exclusions span a wide range of issues, including Big Tech censorship, DEI-led corporate priorities, media bias, executive political advocacy, and policies seen as undermining religious liberty, Second Amendment rights, or pro-life values.
The fund positions itself as an alternative for clients who want their investments to reflect their beliefs, rather than just tracking the market. According to Flaig, conservative-leaning investors are increasingly questioning why they should remain invested in companies whose values they feel actively oppose, arguing that ACVF's approach combines professional portfolio management with principled screening.
Flexibility Within Principles
The Tesla and Paramount readditions illustrate how ACVF's process is never set in stone. On one hand, this reveals that while values-based investors may not be motivated by profits alone, they are at least motivated by consistency. On the other hand, it shows that values-based investors are open to adjusting their opinions over time based on corporate actions and changes in perceptions. It's a balancing act between sticking to principles and acknowledging when companies change direction.