The 2VA Shareholders First Index (ESGN) only invests in large and mid-cap US companies. Companies included in the investment set are screened to determine if they prioritize their duties to shareholders over political activism or social policy agendas, as evaluated by unique proprietary research developed by 2ndVote Research (2VR). Companies are screened based on their neutral rating on each of six social/political issue categories. A company must score Neutral on each issue 2VR scores which currently includes: Basic Freedoms, Life, 2nd Amendment, Civil-Safe Society, Education, and Environment. The ESGN Index then rates the remaining companies employing a unique financial model designed to identify those companies that have the financial characteristics to outperform the market in the then-current monetary regime. The proprietary financial model 2VA employs is licensed from Economic Index Associates. The resulting model index is replicable, investable, rules-based and transparent. Effectively-managed risk is a natural outgrowth of the dynamic financial model—the approach of re-evaluating stocks across regimes produces dynamic portfolios that are not stuck in static sectors, factors, styles or strategy bets that move out of favor.
The financial model is not political in nature – the ESGN index includes the stocks that our financial methodology indicates will be the best performing of those that prioritize their duties to shareholders over political activism or social policy agendas. 100% of ESGN portfolio companies score Neutral on 2VR’s six social/political issue categories. 1
This results in profit-oriented, business-focused companies for the ESGN Index—with the highest modeled return expectations.
1Rebalancing is done on at least a quarterly basis based on changes to the universe of ESGN eligible securities and the financial metrics employed by EIA. Changes to the index may take up to 60 days to implement.