Congressional Trading — the 'Pelosi tracker'

The short version

Can you beat the market by copying politicians' stock trades? In short, no. The one serious study of the years since trades had to be disclosed finds no edge; the famous recent "wins" were really a bet on big tech that reversed in 2022; and you only see the trades about 45 days late anyway. We don't use it.

Abstract

We tested whether copying US Congress members' disclosed stock purchases beats the market. Pre-2012 academic work found large edges (~6–10%/yr), but the only rigorous post-STOCK-Act study (Belmont & Sacerdote, J. Public Economics 2022, 2012–2020) finds no edge — in aggregate or for the Senators specifically accused of informed trading. Our own pull of the "Congress tracker" ETFs shows the recent apparent outperformance is a Big-Tech beta tilt that reversed in 2022, and the whole idea is hobbled by a ~45-day disclosure lag. We reject it as a signal; context-only at most.

1. The claim (and why it matters to us)

"Follow what members of Congress buy — they have an informational edge, and the STOCK Act (2012) forces them to disclose." If real, it would be a cheap, public, long-side signal. The popular version is the "Pelosi tracker."

2. What the literature claims — and our scepticism

• Ziobrowski et al. (2004, JFQA): US Senate 1993–98, purchases beat the market by ~85 bp/month (~10%/yr). Ziobrowski et al. (2011): House 1985–2001, ~55 bp/month (~6%/yr).
• But contested even then: Eggers & Hainmueller (2013, "Capitol Losses") found the average member would have done better in an index fund.
• Post-STOCK-Act, the definitive test: Belmont, Sacerdote, Sehgal & Van Hoek (2022, J. Public Economics 207), 2012–2020 — no abnormal performance in aggregate or for accused Senators; House purchases slightly underperformed (~−26 bp over six months). The strong old edge is a pre-disclosure-era artefact.

3. Our own analysis ← the heart of the report

Data we pulled: yfinance total returns for the two live "Congress tracker" ETFs (Subversive Unusual Whales, launched ~early 2023) vs SPY over the same window.

The tell (aggregate tracker context, Unusual Whales reports): in the up-years 2023 and 2024 (S&P ~+24%/+25%) Democrats' trades returned ~+31% — but in the down-year 2022 (S&P −19%), Pelosi's portfolio fell −19.8%, underperforming. The up-year "wins" are a technology-sector beta tilt that worked when tech ran and failed when it didn't — not stock-picking skill.

4. Findings

• The strong academic edge (~6–10%/yr) is old (1993–2001), pre-disclosure, and was contested.
• The one rigorous post-2012 study finds the edge gone.
• Our ETF pull: NANC marginally ahead (+1.78pp/yr), KRUZ well behind (−5.04pp/yr) — and only ~3.3 years of history.
• Apparent recent outperformance is concentrated in up-years and tech, and reversed in 2022 → beta, not alpha.
• A ~45-day disclosure lag means a follower acts long after the trade.

5. Conclusion — REJECT (and why)

It fails the founding rule: no recent, replicated, net-of-cost evidence that copying disclosed congressional purchases predicts returns. Cherry-picked individuals (Pelosi) beating the market are not a tradable aggregate signal — with ~535 members trading, extreme individual outcomes are guaranteed by dispersion, and the "best member" changes every year (survivorship). For us these are also US names (FX drag for a GBP book). Verdict: AVOID — usable only as a CONTEXT-ONLY footnote ("Congress is also buying") on a name already justified by a validated signal, never as a basis for an idea.

6. Limitations & open questions

• NANC/KRUZ have only ~3.3 years of history — short, and dominated by one tech regime.
• The aggregate tracker numbers are gross/raw, not risk-adjusted or factor-adjusted.
• We have not yet done our own member-level event study on the raw PTR disclosures.

7. How we would extend this

Build a Congress-trades fetcher in the verification harness (Capitol Trades / Quiver / the official House & Senate PTR disclosures), then compute our own forward abnormal returns on disclosed purchases, entered at a realistic post-disclosure date (respecting the 45-day lag), and factor-adjust for the technology-sector tilt. That would be the definitive own-data study — and would let us state, from our own numbers, whether any member or committee shows persistent, factor-adjusted skill rather than a tech beta.

Sources

• Pulled ourselves: yfinance total returns NANC, KRUZ, SPY.
• Cited: Ziobrowski et al. (2004, JFQA 39(4); 2011, Business and Politics 13(1)); Eggers & Hainmueller (2013, J. Politics 75(2)); Belmont, Sacerdote, Sehgal & Van Hoek (2022, J. Public Economics 207); Unusual Whales 2022/2023/2024 congressional-trading reports.

Changelog

• v1.0 (2026-05-31) — initial study; NANC/KRUZ live pull + post-STOCK-Act evidence. Own PTR-level event study flagged as the next extension.