NANC ETF and KRUZ ETF: Should You Copy Congress With an ETF?

Two ETFs have turned congressional stock trading into an investable product. NANC tracks trades made by Democratic members of Congress (named after Nancy Pelosi). KRUZ tracks Republican members (named after Ted Cruz). Both launched in early 2023 and quickly attracted retail investor interest.

The premise is simple: if Congress members consistently outperform the market, why not just buy a fund that copies them?

Here's the honest answer.

What Are NANC and KRUZ?

Both ETFs are managed by Subversive Capital and listed on the NYSE. They work by monitoring STOCK Act disclosures and replicating the trades of Democratic (NANC) and Republican (KRUZ) members of Congress.

NANC holds positions based on Democratic member disclosures, weighted toward high-activity members. Given that Nancy Pelosi and a handful of California and New York members dominate Democratic trading volume, NANC is effectively a large-cap tech fund with a congressional story attached.

KRUZ holds positions based on Republican disclosures. Given Republican member trading patterns, it tends toward defense, energy, and financial sector exposure.

Neither ETF is named with formal endorsement from the politicians they reference — Pelosi and Cruz have both distanced themselves from the products.

The Core Problem: The 45-Day Lag

This is the fundamental issue with both ETFs, and it doesn't get enough attention.

The STOCK Act allows members of Congress 45 days to disclose a trade after it occurs. The ETFs can only replicate trades they know about — which means they're working from disclosures that can be up to 45 days stale.

In practice, the sequence looks like this:

1. Congress member makes a trade (Day 0)
2. Stock price begins reflecting whatever information drove the trade
3. Congress member files disclosure (Day 1–45)
4. ETF manager sees the disclosure and replicates the position (Day 2–46+)

By the time NANC or KRUZ buys a stock, the information advantage that may have motivated the original trade has often already been priced in. You're not copying the trade — you're copying the outcome after the edge has been arbitraged away.

Performance: The Reality Check

NANC launched in February 2023. In its first year, it tracked closely with the S&P 500 — not outperforming meaningfully, which is what the premise of copying smart congressional trades would predict.

The reason is the lag problem combined with a real structural issue: the trades that drive high intent scores (committee-adjacent, information-sensitive) are a small fraction of total congressional trading volume. Most of what Congress members disclose are routine positions in large-cap index-like stocks that have nothing to do with their committee access.

NANC ends up being a roughly market-weight large-cap fund with higher fees than SPY and a delay-based replication mechanism. KRUZ ends up being a value-tilt fund with defense and energy overweights.

Neither consistently beats the index.

The Fee Problem

NANC and KRUZ both charge 0.75% annual expense ratios. Compare that to:

• VOO (Vanguard S&P 500): 0.03%
• SPY: 0.09%
• QQQ (Nasdaq 100): 0.20%

For the privilege of copying stale congressional trades, you're paying 25–37x the cost of an index fund. The performance data doesn't support that premium.

What Actually Works Better

The ETFs fail because they try to automate the whole problem. The information advantage in congressional trading is specific — it comes from particular members, in particular sectors, around particular committee events. Buying everything Congress files at a 45-day lag dilutes the signal to noise.

What works better is selective, real-time attention to the highest-intent trades.

Specifically:

• Targeting high-scoring trades (85+ intent score) rather than all disclosures
• Committee-aligned sector trades — Armed Services members buying defense, HELP members trading pharma, Intelligence Committee members buying cloud/AI
• Getting alerts the moment disclosures are filed rather than waiting for an ETF to replicate them

That's the approach Cloakroom is built around. Instead of buying the whole haystack, the AI Intent Score surfaces the needles — the trades where the committee overlap, timing, and disclosure lag suggest the trade is information-adjacent rather than routine.

The Right Way to Think About Congressional Trades

The NANC/KRUZ premise isn't wrong — it's just imprecisely executed.

Congress does, as a group, outperform the market on disclosed trades. The academic literature on this is reasonably consistent. But the outperformance is concentrated in a small percentage of trades, made by a small number of members, in sectors they have direct oversight over.

A fund that buys everything loses that concentration. You end up with market-rate exposure, market-rate returns, and above-market fees.

The better approach: follow the specific disclosures that score highest on intent metrics, set alerts for the members with the strongest committee-to-sector overlap, and act on the trades that are actually information-adjacent — not the routine quarterly rebalancing that makes up the bulk of congressional volume.

How Cloakroom Compares

Cloakroom is built for the selective approach NANC and KRUZ can't offer:

• Every disclosure gets an AI Intent Score from 0–100
• High-scoring trades (85+) are flagged in real time
• Committee overlap, disclosure lag, and legislation timing are all factored in
• Watchlist alerts mean you see the disclosure the day it's filed — not 45 days later

If you want to follow congressional trading as an investment signal, the answer isn't an ETF with a built-in lag. It's a real-time feed with a model that separates the information-adjacent trades from the noise.

---

NANC and KRUZ are registered ETFs. This post is not investment advice. Cloakroom does not recommend buying or selling any security.