High-Fee Risks and Market Volatility in Trump-Branded ETFs: A Caution for Patriotic Investors in Red States

The launch of Trump Media & Technology Group's (DJT) "Made in America" ETFs in late 2025 has sparked both enthusiasm and skepticism among patriotic investors. These funds, marketed under the Truth Social brand, aim to align portfolios with "America First" values while excluding companies tied to diversity, equity, and inclusion (DEI) initiatives or "controversial causes" according to analysis. However, a closer examination of their fee structures, volatility, and market risks reveals significant challenges for red-state investors seeking to capitalize on this politically charged investment theme.

The Fee Structure: A 65-Basis-Point Burden

All five Truth Social ETFs-TSSD, TSFN, TSIC, TSES, and TSRS-carry an expense ratio of 0.65% (65 basis points). While this may seem modest at first glance, it pales in comparison to industry benchmarks. For instance, the Schwab U.S. REIT ETF (7 basis points) and Vanguard Real Estate ETF (13 basis points) offer far lower costs for similar real estate exposure . The Truth Social American Red State REITs ETF (TSRS), which focuses on REITs in politically conservative states, exemplifies this disparity. Its 65-basis-point fee could erode long-term returns, particularly for investors with smaller portfolios or those holding the fund for extended periods .

Yorkville America Equities, the sponsor and investment advisor, absorbs distribution and service fees, which might initially appear beneficial. However, this structure does not mitigate the core expense ratio, which remains a critical drag on performance as reported. As noted by a report from 401k Specialist Magazine, subscale ETFs like these often face wider bid-ask spreads and higher trading costs, compounding the impact of elevated fees .

Volatility and the Shadow of DJT

The parent company, Trump Media, itself is a volatile entity. As of late 2025, DJT reported a 49.15% annualized volatility, reflecting sharp price swings and operational inefficiencies . This instability raises questions about the sustainability of the Truth Social ETFs, which rely on DJT's infrastructure and brand equity. For red-state investors, whose portfolios may already be concentrated in politically aligned assets, this volatility could amplify losses during market downturns.

Moreover, the ETFs' passive management approach-tracking rules-based indices without active risk mitigation-exposes investors to unmanaged exposure during downturns. As stated in the TSRS prospectus, the fund is subject to "index tracking risk," where performance may deviate from the underlying index due to transaction costs and market conditions according to the prospectus. This lack of flexibility is particularly concerning in a market environment where rapid shifts in political sentiment or economic data could destabilize the "Made in America" theme.

Hidden Costs and Political Branding Risks

Beyond explicit fees, the Truth Social ETFs face implicit risks tied to their political branding. Historical data suggests that politically themed ETFs often underperform unless they achieve strong distribution or align with broader market trends . For example, the American Red State REITs ETF's focus on REITs in Republican-leaning states introduces geographic and sectoral concentration risks. If economic conditions in these regions deteriorate-due to policy changes, natural disasters, or demographic shifts-the fund's performance could lag significantly.

Additionally, the exclusion of DEI-aligned companies, while ideologically appealing, may limit diversification. As highlighted by Morningstar, such screening methodologies can inadvertently exclude high-performing firms, increasing the likelihood of underperformance . For red-state investors, who may already have limited exposure to blue-state markets, this could exacerbate portfolio fragility.

Conclusion: A High-Stakes Bet for Patriotic Portfolios

While the Truth Social ETFs offer a novel way to align investments with political values, their high fees, volatility, and structural risks warrant caution. For red-state investors, the combination of elevated expense ratios, passive management, and the inherent instability of the DJT brand creates a high-stakes environment. As one analyst noted, "Political branding in ETFs is a double-edged sword-it can attract attention but rarely sustains long-term performance without robust fundamentals" .

Investors considering these funds should conduct thorough due diligence, weighing the ideological appeal against the tangible costs and risks. In a market where every basis point matters, the Truth Social ETFs may prove to be a costly experiment in patriotic finance.