065: Julie Cane - Investing in Democracy & Making an Impact
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Julie Cane is the CEO and co-founder of Democracy Investments, a registered investment advisory firm focused on promoting democracy and influencing capital flows in financial markets. The firm’s democracy investments international index re-weights the traditional international equity index towards democracies and away from authoritarian regimes using the Economist’s Democracy Index.
Today, Julie joins the show to discuss index strategies, what inspired her and her team to focus on democracy as a criteria for investment and what the future may hold for index fund investing.
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Key Takeaways
00:02 – Jonathan introduces today’s guest, Julie Cane, who joins the show to talk about her first experiences with money and her career trajectory in the financial services industry
08:09 – Understanding Index strategies and the concept of ‘weighting’
11:31 – How Julie and her partners decided to focus on democracy
15:30 – The importance of understanding where international investments are going to support
17:40 – The case for why a democracy might outperform an authoritarian state in the long run
20:16 – Factors that go into The Economist’s Democracy Score
22:49 – A whole new category of investing
25:33 – Environmental, Social, Governance (ESG) investing
27:07 – Julie speaks to the challenges of launching her own business and upcoming projects
32:23 – The last thing Julie changed her mind about and one place she has visited that had a profound impact on her
34:54 – Jonathan thanks Julie for joining the show and the impactful work she is doing
Tweetable Quotes
“I was drawn to financial services because I felt like money - the economy - that’s where you have impact. I’ve always been mission-driven and I wanted to choose a path where I felt motivated in the same way. How can I help contribute to making the world a better place and I thought of financial services.” (06:49) (Julie)
“The more actively you manage a strategy, the more you’re gonna have higher fees and higher transaction costs. So that has to be weighed when deviating from the traditional market cap approach.” (10:36) (Julie)
“What we do is we hold every country accountable to their ‘Democracy Score’ as defined by The Economist magazine. It’s simple and transparent and systematic.” (13:14) (Julie)
“Democracies enforce rule of law and property rights. There’s a more efficient and transparent use of capital. They have higher per capita GDP. They have better innovation. So, our hypothesis is that democracies will outperform authoritarians in the long run and that companies will try to do their business in countries that support the transparent use of capital.” (18:22) (Julie)
“We [The United States] are a flawed democracy. We stayed the same in our ranking because we went up in political participation because more people voted. But we went down in the functioning of government.” (20:58) (Julie)
Guest Resources
Ticker Symbol: $DMCY
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