White Paper

The Investment Argument for an International Equity Democracy-Tilted Portfolio

November 22, 2021

Christopher Browne, CFA

Democracy Investments

Executive Summary

  • International stocks appear cheap relative to the United States
  • In order to get diversified exposure to a basket of international stocks, many investors use passive/systematic market capitalization weighted products (mutual funds, ETFs)
  • However, these products typically do not account for the geo-political ramifications of investments in authoritarian regimes
  • Using the Economist’s Democracy Index to tilt market capitalization weighted portfolios away from authoritarian regimes and toward democracies has resulted in very similar return streams, while at the same time providing an incentive to countries to reform and to receive more investment

Risk Disclosure and Important Information

Carefully consider the fund's investment objectives, risk factors, charges, and expenses before investing. This and additional information can be found in the Fund’s summary or full prospectus, which may be obtained at www.democracyinvestments.com. Please read the prospectus carefully before investing. A hard copy of the prospectus can be requested by calling 877-PRO-DMCY (877-776-3629) or emailing DemocracyETF@seic.com.

Investing involves risk, including the possible loss of principal. There is no guarantee or assurance that the methodology used to create the Index will result in the Fund achieving positive investment returns or outperforming other investment products.

The fund is subject to the risks associated with International investments, which may involve risk of capital loss from unfavorable fluctuation in currency values, from differences in generally accepted accounting principles or from social, economic, or political instability in other nations; emerging markets involve heightened risks related to the same factors as well as increased volatility and lower trading volume; and investments in smaller companies typically exhibit higher volatility.

The funds are distributed by SEI Investments Distribution Co, which is not affiliated with Democracy Investment Management LLC.

Shares of ETFs are bought and sold at market price (not NAV) and are not individually redeemed from the Fund. Brokerage commissions will reduce returns.

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