Virtuous Greed

Virologist MICHAEL TAYLOR does volunteer work helping cancer patients. His task: picking health care stocks.

- By William Baldwin

“I have never known much good done by those who affected to trade for the public good,” Adam Smith said. Maybe he'd have made an exception for the Simplify Health Care exchange-traded fund. All of its 0.5% fee revenue, after overhead, is donated to the Susan G. Komen Breast Cancer Foundation. The fund's portfolio manager, Michael F. Taylor, takes no salary.

Private businesses that give away all profits and also succeed as businesses are scarce; the Newman's Own food branding operation, which has donated $600 million to children's causes, is unusual. An eleemosynary aim would seem to be even more out of place on Wall Street, where “greed is good” is the mantra.

“This is the first true impact-investment ETF,” brags Taylor, 52, who retired young and prosperous from a hedge fund career. “I have the luxury of not having to receive money for my efforts.” So far the fund has sent $250,000 to Komen. He picked Komen, he says, because it can effectively invest money in medical research—some $10 million a year, recently.

Customers of the Simplify fund aren't making any sacrifices. The actively managed ETF, which opened in late 2021 and has attracted $144 million in assets, has averaged a 5.3% annual return since inception, per YCharts, matching the return of the giant Health Care Select SPDR fund, which passively tracks an index.

Taylor is assuredly not running any closet index fund. His annual turnover is 210%, par for a hedgie but freakish for an ETF. The SPDR fund owns Merck, Biogen, Amgen and Pfizer. Taylor shuns all four because, he says, looming patent expirations will decimate their profits. Pfizer commits the additional sin of making Covid vaccines, which the iconoclastic Taylor views as no good.