An ETF with a defiantly “post ESG” label has claimed success after its first full week of trading.
The DRLL fund has $100 million of assets under management (AUM) and more than $160mn in traded volume, Strive Asset Management reported. This, the company said, was the largest non-seeded ETF launch in 2022.
Strive executive chairman Vivek Ramaswamy said the investor aimed to unlock the US energy sector’s potential with a focus on excellence and increased oil and gas production. This is opposed to the “social agendas imposed by large ESG-linked asset managers”, Ramaswamy said.
Small dollar trades have driven DRLL’s progress thus far, said Strive’s head of products Matt Cole. The average trade size for the ETF was $4,055, it said, versus the average for other ETF launches this year of $5.7mn. “The success of DRLL has been driven by smaller dollar trades,” Cole said.
We launched $DRLL last Tuesday and had over $100mm in AUM by end of week 1. Largest non-seeded ETF launch this year. Average trade size was small suggesting strong grassroots support. Really grateful to the everyday citizens who are joining our movement.⁰https://t.co/YmzgjvzKz4
— Vivek Ramaswamy (@VivekGRamaswamy) August 16, 2022
The fund is passively managed. It aims to track the total return of the Solactive GBS United States 1000 Index, which is closely correlated to BlackRock’s US Energy Index.
Trading in DRLL exceeded that of BlackRock’s passively managed energy fund, IYE. Strive said it aims to exceed IYE’s AUM by the end of 2023. IYE has around $2 billion in AUM.
Taking to the streets
Strive launched a “national education campaign” in July. The company said asset managers such as BlackRock and Vanguard, had “effectively caused US energy companies to produce less oil and natural gas in the US, creating the spike in prices”.
The investor has also flagged up activist investor Engine No. 1. While holding a small stake in ExxonMobil, Engine No. 1 managed to influence the election of three directors. As a result of this, Strive said, Exxon has scaled back production targets and extended the “energy crisis Americans face today”.
Ramaswamy, speaking in July, said asset managers had pushed for change at US companies, but avoided criticism of Chinese companies.
BlackRock imposes ESG mandates on American companies like Exxon and Chevron, without saying a peep to PetroChina…where BlackRock is of course one of the largest foreign shareholders.
— Vivek Ramaswamy (@VivekGRamaswamy) August 11, 2022
Ramaswamy was formerly CEO of pharmaceutical company Roivant Sciences. He stepped down from this role in order to be able to express his personal views. The executive went on to publish a book, “Woke, Inc”.
PayPal founder Peter Thiel and activist investor Bill Ackman, of Pershing Square, have backed Strive.
David Heikkinen joined Strive as its chief energy strategist last week. Heikkinen had previously worked at Pickering Energy Partners. On LinkedIn, the analyst said the “energy sector is poised for dramatic outperformance as companies and management teams are unshackled”.