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Free market rejects LGBT investment funds as another closes down

Unsplash/Sharon McCutcheon

An LGBT-themed ETF backed by the likes of former U.S. Congressman Barney Frank and tennis superstar Martina Navratilova announced it was closing down after failing to attract assets, the third such fund to start and shutter in recent years, raising doubts about the veracity of an investment thesis focused on LGBT-friendly companies.

The LGBTQ + ESG100 ETF, which was listed under the ticker LGBT and sought to “invest in the top 100 corporations that most align with the LGBTQ community,” ceased trading on April 20th after the sponsors of the fund, LGBTQ Loyalty Holdings, Inc. (OTC PINK: LFAP), issued a statement blaming the fund’s advisor, ProcureAM, for failing to attract sufficient assets for LGBT to continue operations. “As the sponsor of the Fund, the long-term sustainability to secure assets under management (AUM) has to be our primary focus…While the LGBTQ100 ESG Index has seen strong performance since its launch, we will be closing the fund in order to license the index to a new advisor.”  The fund only succeeded in raising approximately $2.6M in assets by the time of its closure.

Previous attempts at LGBT-themed ETFs have also experienced similar fates. On April 26th, 2019 the ALPS Workplace Equality ETF (ticker “EQLT”) stopped trading with $16.7M in assets, and on November 20th, 2019, the InsightShares LGBT Employment Equality ETF (ticker “PRID”) ceased trading with $2.7M in assets.

EQLT survived for 5 years before its demise, while PRID lasted just over a year. LGBT failed to see its first birthday, which would have been May 17th, this year. Three points make a trend, and this one is not encouraging for LGBT-themed investing advocates.

Business executives have been told for quite some time that being recognized as a company pushing for LGBT equality, whether by promoting legislation like the Equality Act or with a thematic product launch like the LGBT ETF, is a winning business strategy in today’s modern marketplace where diversity and inclusion are such prevalent forces. Advocacy groups point to data showing increasing cultural acceptance of LGBT individuals or support for gay marriage legislation as validation for that supposed business case, but the repeated failure of LGBT-themed investment funds casts serious shadows on that logic.

One of the beautiful traits of a free market economy is its piercingly unbiased judgment. Popular ideas are rewarded, and unpopular ideas are punished. There is no other way to interpret the three-time failure of LGBT thematic investing than a resounding rejection by the free market. I will leave it to others to debate the finer points of why the free market has rejected the LGBT investing idea, but I will proffer my own theory.

I do not question that the prevailing public attitude in the United States is in favor of including LGBT persons, helping protect them and other minority groups from discrimination, and so forth. However, I do not believe that attitude necessarily means that the general public wants to promote or celebrate LGBT sexuality or get involved in LGBT political issues.

Maybe there are more people like me than some pundits realize. Maybe there are people who want the best for LGBT people even though our personal values diverge with the LGBT community over sexuality and gender identity issues.

We want life, liberty, and the pursuit of happiness for all our fellow Americans, but we are not going to invest in an LGBT fund and will be nonplussed with companies who politically entangle themselves promoting partisan LGBT legislation, just as Disney experienced recently with their very public policy failure and rebuke by Gov. Ron DeSantis as they attempted to meddle with the sexual education content of Florida’s elementary school students.

Milton Friedman spoke well when he said, “Indeed, a major source of objection to a free economy is precisely that it…gives people what they want instead of what a particular group thinks they ought to want.” Potential purveyors of LGBT investment funds and corporate executives exploring political involvement should think that over carefully.

Robert Netzly is the CEO of Inspire Investing and frequent contributor on The Christian Post, FOX, The Wall Street Journal, Bloomberg, The New York Times and other major media. Read more from Robert in his #1 bestselling book Biblically Responsible Investing, available at and other major retailers.  LinkedIn: @Robert_Netzly

Advisory Services are offered through CWM Advisors, LLC dba Inspire, a Registered Investment Adviser with the SEC.

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