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Bush fund or Gore fund?
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October 20, 2000: 7:22 a.m. ET
MAXfunds.com has a new way for investors to track the presidential race
By Staff Writer Martine Costello
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NEW YORK (CNNfn) - Politics, like most things in life, is about money. And even though the two presidential candidates are in a tight race in the polls, a new mutual fund company said it has a way for investors to track Vice President Al Gore and Texas Gov. George W. Bush where it really counts - campaign contributions.
MAXfunds.com, an unconventional online fund-tracker based in Ann Arbor, Mich., said it has created two indexes of the top 20 publicly traded companies that have contributed "soft money" to the two candidates.
 "We're trying to show what's really going on money-wise in the election," said Jonas Max Ferris, founder and chief executive of MAXfunds.com.
Unregulated "soft money" that comes to the Republican and Democratic parties has become a heated campaign issue. Former presidential hopeful Sen. John McCain, R-Ariz., has pushed for major campaign finance reform and both Bush and Gore have lambasted soft money even as such contributions hit a new record this year.
MAXfunds.com created the indexes and is tracking them on the site as a learning tool for its users about the economics behind the presidential election, Ferris said.
The information is available to people who register on the site at no cost. People can go to a broker and invest in the stocks on their own, but MAXfunds.com isn't making any commissions on the idea.
"We want to raise the financial issue of the election," Ferris said.
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The Bush Fund's top holdings include energy stock Enron (ENE: Research, Estimates) and tobacco company Philip Morris (MO: Research, Estimates), while the Gore Fund's biggest names include media giant SBC Communications (SBC: Research, Estimates) and Leucadia National Corp. (LUK: Research, Estimates), a financial services holding company.
"This is an audience the candidates have to do stuff for," Ferris said of the companies. "They owe them more than the voters in many ways."
The Gore Fund also includes CNNfn.com parent Time Warner, which is merging with America Online. Time Warner (TWX: Research, Estimates) is the fund's 16th largest holding.
Since MAXfunds.com launched the election funds on Aug. 1, the Bush Fund is up 4.4 percent as of Oct. 17, while the Gore Fund is down 4.8 percent.
"There's some correlation between how these two funds do and how the candidates are doing in the polls," Ferris said.
 Sean Takats, a PhD candidate in history at the University of Michigan, is the portfolio manager of the two funds.
"The fact that this is a close election makes this more likely to work," Takats said.
While some companies have questioned the findings, Takats said he came up with the indexes by studying public campaign contribution records on file with the Federal Election Commission. He used information from three Web sites: fec.gov, opensecrets.org and fecinfo.org. His analysis took about a month.
Takats said he looked at the top competitors, then eliminated companies that gave to both camps. He also eliminated unions, which are big campaign contributors, since they are not publicly traded.
Click here to read more election coverage in CNNfn.com's special report on the presidential race, The Politics of Business.
By law, companies cannot donate directly to federal candidates, according to the FEC. Companies may contribute an unlimited amount to the Republican and Democratic National Committees' "soft money" accounts, the FEC said.
Companies can also set up political action committees that may donate a maximum of $5,000 a year to each candidate, the FEC said. The PACs solicit money from executives and shareholders of the company.
"Any company that's contributing heavily to a candidate views the election as some kind of financial risk to that company's profitability," Takats said.
 Out of the five companies in both indexes, only Enron and Unilever responded for comment.
Mark Palmer, a spokesman for Enron, said the company has contributed to both sides. Enron gave $250,000 to the Republican National Committee and $150,000 to the Democratic National Committee, he said. The company also has a political action committee.
"It's weighted towards the Republicans and Bush," Palmer said of the overall contributions. "Typically, Republican administrations are more friendly toward open access and deregulation and letting markets work, and that's what Enron is all about - being able to compete for your business for electricity and natural gas."
As far as Unilever's inclusion in the index, spokesman John Gould said: "I'd check that for accuracy because I think that's untrue."
Takats said that the Unilever donation to the Gore Fund was made through its Dutch arm. Unilever is a joint venture between Dutch and British businesses. The Dutch arm gave money through Unilever's U.S. unit, Slimfast, he said.
The other company mentioned in this story, CNNfn.com parent Time Warner, also declined comment. But a November 1999 release on the Time Warner Web site said the company had eliminated soft money contributions. Time Warner in the past has said its political action committee contributions are bipartisan.
Takats said the indexes will allow investors to learn about the election and profit from it as well.
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"This year, don't just vote for a candidate - put your money where your mouth is and invest in the companies who are behind him," Takats said.
And if you're the type of investor who likes to do his homework, here are some particulars of the two funds: The average price-earnings ratio, or P/E (the stock price divided by the earnings per share) is 14.29 for Bush and 18.22 for Gore.
The average market capitalization of Bush stocks is $44.2 billion, compared with $22.5 billion for Gore.
Click here to read more about the MAXfunds.com's Bush and Gore indexes.
Gore's stocks are slightly more risky than Bush's, with a volatility factor of 24.56 compared with 20.48 for the Texas governor.
MAXfunds.com is tracking weekly Gallup Poll data alongside the indexes' net asset values.
The site, launched in February, takes a lighter approach to fund tracking than some of its peers, with features like "funds just hatched," and a "fund-o-matic" search tool. It specializes in undiscovered funds without ticker symbols, Ferris said.
"We try to keep it entertaining on our site," Ferris said. 
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