As ETF issuers look for strategies that go beyond basic market exposure, insider behavior is increasingly packaged into ETF form. Instead of relying solely on macroeconomic views or earnings forecasts, these products aim to capture what executives and directors are doing with their own money; this has long been a signal followed by professional investors.
The Tweedy, Browne Insider + Value ETF (NYSE:COPY) is a notable example. In the past year, the ETF has returned more than 30%, nearly doubling the S&P 500’s approximately 16% gain during the same period. Although COPY is relatively new, the logic behind this investment is grounded in decades of research on trends in insider ownership.
COPY focuses on sustained insider ownership over periods of six months to three years. It targets companies where executives and board members hold significant equity stakes. Instead of reacting to individual trades, the strategy emphasizes patterns of insider commitment and combines those signals with conventional value screens. This rules-based approach places the ETF between passive indexing and active stock selection, offering transparency and liquidity while incorporating research-driven insights.
Insider transactions are publicly disclosed through SEC filings, but the raw data can be messy and hard to interpret alone. Market participants usually seek context, such as transaction size, ownership changes, and whether multiple insiders are buying at once, before drawing conclusions. Tools that organize and filter this information in real time, like Benzinga’s Insider tool, have made it simpler for investors and issuers to track significant insider activity rather than isolated, routine trades.
COPY is part of a larger trend within the ETF industry toward behavior-driven and ownership-based strategies. As traditional equity ETFs become more standardized, issuers are increasingly relying on alternative signals, such as insider alignment, to differentiate their products. These strategies seek to capture information that may not yet be reflected in market prices while still providing diversification at the ETF level.
The concept is straightforward: insiders typically have a better understanding of their companies than outside investors, and consistent ownership can signal confidence that extends beyond corporate messaging.
However, insider-focused ETFs carry risks. Insider buying does not guarantee future returns, and short performance periods can distort success.
Despite this, COPY’s performance indicates that when insider data is filtered, contextualized, and combined with valuation discipline, it can create a solid foundation for a competitive ETF strategy that tracks actions in an increasingly crowded ETF market.
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