In what could be called the “Inside The Beltway,” or maybe even the “Gridlock” suite of exchange-traded funds, a trio of actively managed ETFs launched on Tuesday are all about tapping into the nation’s political—and fiscal—milieu.

The EventShares Republican Policies Fund (GOP) and the EventShares Democratic Policies Fund (DEMS) invest in companies that could benefit from policies emanating from the country’s two major political parties. Meanwhile, the EventShares U.S. Tax Reform Fund (TAXR) aims to capitalize on companies that could be impacted by changes in the U.S. tax code

The EventShares funds, which all trade on the Bats exchange, are managed by Active Weighting Advisors LLC, a New York City-based asset manager that plans to offer additional products offering exposure to geopolitical and policy-driven events in the U.S. and beyond. The emphasis on these types of events inspired the brand name for the company's ETFs, says Ben Phillips, chief investment officer at EventShares.

The GOP and DEMS funds will be rebalanced quarterly and equal-weighted based on qualitative analysis of current and prospective policy initiatives by the two political parties and their potential impact on specific sectors and companies, and on quantitative analysis that screens for a set of proprietary metrics used to define the investable universe and manage portfolio risk.

"These are U.S., all-cap portfolios designed with an embedded policy catalyst and are constucted based on policy buckets of various sub-themes," Phillips says.

The GOP fund’s 31 securities are broken down into sub-theme areas relating to deregulation, defense spending, tax reform, energy independence and infrastructure.

With the DEMS fund, which also comes out of the gate with 31 holdings, the sub-themes are healtcare expansion, environmentally conscious policies, educational access, social good and finance reform

Both funds have a net expense ratio of 0.75 percent.

The EventShares U.S. Tax Reform Fund fund has a net expense ratio of 0.85 percent, and like the other two ETFs will be rebalanced quarterly and equal-weighted. All three funds may also hold debt securities and have the option to short certain holdings.

The TAXR fund's 33 constituents are divided into three sub-themes: corporate tax cut; U.S. exporters that can benefit from lower corporate tax rates; and capital expenditures pertaining to a company's use of tax credits and business deductions.

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