What's the secret of the best stock pickers in Congress? AI.

The best stock pickers in Congress have a lot in common this year. They made bets on technology stocks that churned higher amid an artificial intelligence frenzy.

They also happened to largely belong to one particular party: the Democrats.

Two exchange-traded funds that track the portfolios of US political leaders found that left-leaning lawmakers outperformed both the stock market and their GOP colleagues during a four-month period beginning in February, when the funds first launched.

Democrats have earned returns of 5.4% over just four months, higher than the 3.2% performance of the S&P 500. GOP portfolios are down over 2%.

The two ETFs - named NANC and KRUZ - allow anyone with a brokerage account to invest in what Democrat and Republican lawmakers (as well as their families) are holding at any given moment. They were created by Subversive Capital portfolio manager Christian Cooper and market research group Unusual Whales to draw attention to the issue of lawmaker stock trading.

The divergence in the portfolios has a lot to do with what Democrats like to own: technology.

Their top 5 holdings as of Friday are Microsoft (MSFT), Amazon (AMZN), Alphabet (GOOG), Apple (AAPL), and chipmaker Nvidia (NVDA). Nvidia has provided more fuel to a tech rally fueled by AI when it posted a better-than-expected quarter and blockbuster guidance in May.

The top GOP holdings look very different. They included Accenture (ACN), Energy Transfer LP (ET), Shell (SHEL), Philip Morris (PM), and Elevance Health (ELV).

Cooper is quick to note that had these ETFs existed last year - when the energy sector jumped nearly 60% - Republicans would have surely beat their colleagues on the other side of the aisle. But energy stocks have lost their luster this year, and that's hurting Republican portfolios.

"It's really a tale of two countries," he said in an interview this week. Democratic portfolios, he notes, tend to be overwhelmingly focused on "things that are future focused" and that worldview is winning out at the moment.

All told, lawmakers as a whole beat the S&P 500 both in 2021 and in 2022, according to reports from Unusual Whales. Investors who took a bipartisan approach and invested equally in both funds this year might be wishing they just stuck with the S&P 500.

'They're generally trading less'

The returns this year are calculated from public disclosure filings required by law.

Some of these public disclosures have generated calls for Congress to ban any type of trading by members amid concerns they could leverage their privileged access to information.