You Helped Fund the 2026 Midterms. You Just Never Got a Receipt.
If you own a broad U.S. index fund, through a 401(k), an IRA, a robo-advisor, or elsewhere, some of your money went to work on the 2026 midterm elections this year. Not because you chose a candidate. Not because you wrote a check. Because the companies inside your index did, and you own them.
This year, that bundled contribution hit an all-time high. According to a June 30 report from the watchdog group Public Citizen, corporations have already directed $517 million toward the 2026 midterms — breaking the full-cycle record set in 2024, with four months still to go before Election Day. Nearly a third of all corporate election spending since the 2010 Citizens United decision has happened in this one cycle. Four industries — crypto, AI, Big Tech, and online betting — account for 57% of it.
Some of that money comes from private companies no index investor holds: venture firms, offshore exchanges, sportsbooks. But a lot of it doesn’t.
The names you’ll recognize
We've built Innovation over Influence, an investment strategy that screens the largest U.S. companies for exactly this behavior: heavy political spending, measured by fixed rules. Among the companies named in the Public Citizen report are some of the largest holdings in ordinary index funds:
Every publicly traded company from the report's contributor tables that appears in our investment universe fails our screen. Not because we read the report and reacted — our rules-based screen independently identifies the same behavior the report documents, and these companies remain excluded under the tightened standards taking effect at this month's rebalance.
If you hold a standard broad-market fund, you hold these companies. You never voted for their political spending. It came bundled with the index.
Why we built this
Prime Directive Analytics exists because of one conviction: companies should compete in the marketplace, not in Washington. Distrust of money in politics is one of the few genuinely bipartisan sentiments left in America: large majorities of Democrats, Republicans, and independents believe corporate money has too much influence. Most people assume there’s nothing they can do about it. We think your portfolio is somewhere you can.
Innovation over Influence is a broad U.S. equity strategy built around that idea. The screen is rules-based and direction-blind: we measure how much companies and their executives contribute to federal campaigns, never which side receives it. The same rules for every company.
The result, in numbers. Public Citizen's $517 million counts corporate money flowing into this election cycle across the whole economy, public and private. Our measure is narrower and longer: federal campaign contributions by the roughly 1,500 largest publicly traded U.S. companies, the broad equity universe we screen from, over the most recent rolling four-year cycle. By that measure, the universe gave approximately $1.63 billion. The companies in our portfolio gave about $79.6 million. A reduction of more than 95%.
“But doesn’t that cost you returns?”
It’s the first question everyone asks, and it should be. The heaviest political spenders overlap with some of the market’s biggest names, so cutting them ought to hurt.
Our answer is direct: we don’t believe you should have to accept less than the market to stop funding the influence machine, and we didn’t build a portfolio that asks you to. Political spending is not what makes a company profitable. A portfolio that holds the rest of the market, weighted to behave like the market sector by sector, isn’t giving up the market. That’s not a hope; it’s how the strategy is engineered, tested against more than two decades of market history before a single dollar went in.
Since live trading began on December 10, 2025, the portfolio has behaved exactly as designed. On days the market fell, it fell. On days the market rose, it rose. Through July 9, it is up 14.3% since inception, versus 10.6% for the broad universe it screens from — ahead of the market so far, though beating the market is neither the goal nor the promise.
As with any screened strategy, individual periods will run ahead of or behind the broad market, and nothing here is guaranteed. But the expectation we built this on is simple, and seven months in, it’s the expectation the portfolio is meeting: broad-market behavior, with the influence-buying screened out.
The screen stops grading on a curve
Corporate influence-buying isn’t standing still. The Public Citizen report documents how crypto’s 2024 political playbook: sector super PACs, financial pressure on sitting lawmakers, is being copied by AI and betting companies. The behavior is escalating and spreading.
Our original screen was relative: it removed the heaviest political spenders as measured against the rest of the market. That works until the whole market’s behavior shifts. If corporate spending doubles across the board, a relative screen quietly tolerates the escalation, because everyone looks average when everyone is spending.
So at this month’s rebalance, we’re moving to absolute standards: fixed thresholds that don’t move when the market’s behavior does. If corporate political spending keeps climbing, and many data points this cycle suggest it will, more companies fail the screen, not the same share of a worsening pool. The portfolio’s character doesn’t change: same broad-market design, same direction-blind rules. But the reduction in federal contribution exposure improves from over 95% to over 98%, and the standard itself no longer bends with the times.
In a record-spending year, that distinction is the whole point.
One vote at the ballot box. A vote every day in your portfolio.
Every dollar you invest is working somewhere. Right now, for most index investors, some of it is working on politicians.
You can’t singlehandedly change how Washington works. But you can decide whether you’re paying for it.
Disclaimer:
This is a research publication. I'm not a registered investment adviser and this isn't personalized investment advice. Performance figures are from a live trading acccount, December 10, 2025 through July 9, 2026; past performance doesn't predict future returns. Company exclusions reflect the strategy's screening rules, not a claim about any company's conduct.