With the second debate now over, ThinkAdvisor looks at Hillary Clinton's and Donald Trump's portfolios, which reveal that their investment strategies are as divergent as their policy plans, according to financial disclosures filed with the Federal Election Commission.
Trump holds a jumbo conglomeration of stocks, mutual funds, ETFs and risky hedge fund investments. Clinton, in contrast, has the majority of her eggs in one basket: the Vanguard 500 Index Fund, and in cash. This is a far cry from speculating in cattle futures, which she dabbled in as a young lawyer 30-plus years ago.
ThinkAdvisor interviewed Daniel Auble, senior researcher at the nonpartisan Center for Responsive Politics, a nonprofit organization that tracks money in U.S. politics and how it influences elections. Auble has analyzed both Clinton's and Trump's most recent disclosures, covering Jan. 1, 2015, through mid-May 2016, which they filed in May.
Presidential candidates are required to submit financial disclosures—which do not include income tax returns—mainly to detect potential conflicts of interest if they were elected.
But “part of the issue with these reports,” Auble said, “is that if something is being hidden, it's hard to know without a whole lot of investigation and getting leaked information.”
From studying Trump's securities portfolio, he clearly has “a goal to maximize his investment income,” Auble said. “He's invested [mainly] in his real estate development and has fingers in a variety of other businesses, but he also has stocks and funds. Compared to his overall wealth, though, his stock holdings are relatively minor.”
As for the Democratic candidate, Auble said, “I assume the Clintons' set-up has been deliberately kept simple—not investing in specific companies or anything controversial because of their past as public officials and ambitions for the future.”
He continued, “It isn't going to be a conflict of interest when [most] of their money is in cash and one of the most popular mutual funds there is. Her portfolio seems set up almost as a proxy blind trust, where there's no potential conflict at all.”
Trump has stated repeatedly—as in a press release the day he filed his disclosure—that his net worth totals more than $10 billion. However, his report doesn't confirm that, since on the form filers must check off broad dollar ranges, as opposed to indicating specific amounts. As reported, Trump's assets amount to some $1.5 billion.
According to her disclosure, Clinton's net worth (excluding Bill Clinton's) is approximately $52 million. The report shows that her largest assets are a cash account at JP Morgan ($5 million-$25 million) and the Vanguard fund, which is valued in the same dollar range.
Trump has about $25 million in cash, he reported. His checking and savings accounts are held at JPMorgan Chase and Capital One Bank, and six other banks.
In addition to Treasury notes ($50,000-$100,000), Clinton owns about $2 million in insurance policies from Northwestern Mutual Life, National Life Insurance and AIG Life Insurance.
Trump lists his stock and fund investments on 20 pages. His three family trusts are invested mostly in stocks and funds.
The Republican candidate reports positions in about 150 individual equities, though only 11 are valued at $1 million or more. He favors the technology and financial sectors, owning shares in, for example, Apple, Microsoft, Energy Transfer Partners, Citigroup and JP Morgan.
“I've heard that Trump claims to have divested a bunch of his specific company stocks since this filing,” Auble noted.
Trump—who reported his brokers are Barclays Bank, Oppenheimer, Deutsche Bank and JP Morgan—is estimated to have about 60% of his assets invested in bonds, including those of Bank of America, Citicorp and Morgan Stanley. He has millions of dollars in eight hedge funds, several of which are invested in high-yield bonds and troubled enterprises. These include BlackRock's Obsidian, AG Diversified Credit Strategies, AG Eleven Partners and John Paulson Credit Opportunities.
Trump also holds Treasury notes and Treasury bills, as well as between $100,000 and $250,000 in gold.
At 104 pages, Trump's report indeed trumps Clinton's in length—hers is only 11 pages, five of which state only, “N/A” or “None.”
“Trump's report isn't the longest or [most] complicated financial disclosure I've ever seen,”Auble said. “However, it's not so common for someone to have so many LLPs, in this case directly owning all this commercial real estate and hotels, and so on. It's a [very unusual] set-up in the structure of his investments and businesses. But I see nothing suspicious about the report. I have no reason to believe it isn't accurate, to the best of their effort.”
Trump reports assets of at least $687 million in real estate and development as owner of, for example, Trump Tower and 40 Wall Street in New York City, among numerous other properties.
He lists at least $550 million of assets in golf courses and resorts—such as Mar-a-Lago in Palm Beach, Florida and Trump Turnberrry in Scotland—plus $100 million in hotels. He reports aircraft worth at least $58 million and millions of dollars in vineyards and entertainment businesses.
On 12 pages, Trump indicates a wide variety of endeavors—ownerships, licensing of his name and other other connections—ranging from a poker venture to mattresses to magazines to Trump-branded menswear. Many of these enterprises are in foreign countries, including Dubai, Qatar, China, Japan, Korea, India, Istanbul, Egypt, South Africa, Brazil, the French West Indies and Jeddah, in Saudi Arabia, where this past August he reportedly established four corporations.
The self-described “King of Debt” has liabilities of at least $315 million, mostly in mortgages on his properties like Trump Tower and Trump National Doral, a hotel in Miami, Florida.
“Trump has a whole lot of debt—a bunch of mortgages,” Auble said. “This is a consequence of his business structure, which has his personal and business fortunes kind of intertwined.”
Hillary Clinton reported no liabilities.
As for income, most of Trump's $615 million intake was derived from his golf courses and resorts, along with condominium sales and rentals, he reported.
Trump also received commissions from his modeling management business and income from operating two attractions in New York's Central Park: Wollman ice skating rink (no connection to this reporter) and the Carousel.
Clinton showed at least $172,500 in dividends and investment income. Royalties on her book, “Hard Choices,” brought in much more: $5 million-plus. She maintains a trust, ZFS Holdings, specifically for her books and paid speeches, the latter having generated $1.5 million in income.
The disclosure covers speeches Clinton made prior to declaring her candidacy. After that, she accepted no paid speaking engagements.
Former president Bill Clinton earned royalties of up to $50,000 for his book, “My Life,” and income from talks at firms including UBS Wealth Management Americas and Oracle Corp., the report says.
Both Trump and the Clintons receive monthly pension income. Trump's is from the Screen Actors Guild-AFTRA; Bill Clinton collects retirement benefits from the Arkansas Public Employee Retirement System Defined Benefit Plan.
Personal financial disclosures are required, under the Ethics in Government Act of 1978, for high-level elected officials and appointees. However, since filers are asked to disclose their assets only in broad ranges, the reports fail to provide a complete picture, the Center for Responsive Politics notes on its website, www.OpenSecrets.org.
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