Startup asset manager Azoria Partners has announced the upcoming launch of a new exchange-traded fund (ETF) in the first quarter of next year. This fund, named the Azoria 500 Meritocracy ETF and trading under the ticker SPXM, is designed to invest in companies within the S&P 500 while specifically excluding those that implement “racial or gender quotas” in their hiring, promotion, or compensation decisions.
James Fishback, the founder of Azoria Partners, revealed the new fund, emphasizing a core investment philosophy: companies that prioritize skills and abilities in their talent management will ultimately outperform those that factor in race and gender. In a speech delivered at President-elect Trump’s Mar-a-Lago resort, Fishback stated that approximately three dozen S&P 500 companies currently utilize Diversity, Equity, and Inclusion (DEI) strategies that Azoria Partners believes hinder meritocracy.
Starbucks Called Out by Azoria Partners for DEI Approach
During his address, Fishback directly addressed Starbucks, labeling the popular coffee chain as a “great American company… that has sadly lost its way.” This statement underscores Azoria Partners‘ concern that certain corporate DEI initiatives may detract from a merit-based system.
Azoria Partners supports its investment thesis by pointing to performance data. According to their analysis, companies within the S&P 500 employing DEI strategies have underperformed, yielding only a 12% year-to-date return. This figure significantly lags behind the S&P 500’s overall growth of over 27% in the same period. Fishback further asserted, “Over the past two years, the anti-merit bunch returned 17% compared to the S&P 500’s 60%,” suggesting a substantial performance gap. He also noted that a significant majority (72%) of stocks in what Azoria Partners deems the “anti-meritocratic portfolio” have underperformed the broader S&P 500 across multiple timeframes. Fishback concluded that the S&P 500’s performance would be even stronger if these companies, perceived by Azoria Partners as “anti-meritocratic,” were not included.
SPXM ETF Taps into Growing Anti-ESG Investment Trend
The Azoria 500 Meritocracy ETF emerges amidst a rising tide of conservative investment products. “Anti-ESG ETFs” have gained traction in recent years, reflecting a segment of investors seeking to align their portfolios with politically conservative values. The Point Bridge America First ETF (MAGA), for instance, invests in companies that support Republican candidates through employee contributions and PACs, and it has achieved nearly a 24% year-to-date return. Another example, the American Conservative Values ETF (ACVF), actively avoids companies considered “hostile to conservative values,” and it mirrors the S&P 500’s growth with a 27% year-to-date return.
While Starbucks was specifically named, Fishback did not disclose the full list of companies Azoria Partners believes are using race-based quotas. Beyond aiming to outperform standard S&P 500 funds like the SPDR S&P 500 ETF Trust (SPY) and the Vanguard S&P 500 ETF (VOO), Azoria Partners articulates a broader mission for the SPXM ETF. They aspire to encourage “every company in the S&P 500 to become a meritocracy again,” signaling an intent to influence corporate behavior through investment strategies. Fishback stated, “We’re going to make our case in the marketplace of ideas for why these companies should do just that,” suggesting Azoria Partners views the fund as a tool for promoting their meritocratic ideals within corporate America.
As of the time of reporting, Azoria Partners had not responded to requests for further comments.
