Kamala Harris’ financial disclosure reveals her investments

Financial experts have one word to describe Vice President Kamala Harris’ investing style: boring.

For a woman seeking the highest office in the United States, it also means she is relatively free of financial strife.

As vice president, Harris submitted a 2023 public financial disclosure report and signed it in May. This shows her preference for passively managed index funds in her portfolio.

Dustin Thackeray, a chartered financial analyst and chief investment officer at Crewe Advisors in Salt Lake City, who reviewed Harris’ disclosure, said: “It seems very passive to me, which is disconcerting. Refreshing.

“She would never try to trade on any inside information,” Thackeray said.

Carolyn McClanahan, a certified financial planner and founder of Life Planning Partners in Jacksonville, Fla., who also reviewed Harris’ financial disclosures, said she saw Harris investing in low-cost passive investment strategies , she was “very excited”.

“To me, she has the cleanest portfolio of any politician,” said McClanahan, who is also a member of CNBC’s financial advisory board.

“She owns a lot of index funds; there’s no way she’s gaming the system,” McClanahan said.

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Harris’ disclosure comes as members of Congress debate whether elected leaders should limit the types of investments they can have.

A group of senators is pushing a bill that would ban members of Congress and their spouses and dependents from buying certain investments, such as individual stocks, but not diversified investment funds or Treasury bonds. While a Senate panel voted to approve the bill this week, it’s unclear whether it will ultimately become law.

In addition to Harris’ preference for passive investing, the disclosure sheds more light on her finances that could provide lessons for other investors, according to experts who reviewed the document.

Harris listed eight different funds in which she invested as part of two separate 457(b) deferred compensation plans while working in California, in addition to participating in certain defined benefit pension plans.

Meanwhile, her husband, Douglas Emhoff, lists more than 30 fund investments, most of which are passively managed.

Notably, the disclosure only lists certain asset ranges for each fund, rather than specific investment amounts.

Experts who reviewed Harris’ filings said the couple could reduce the number of funds they own, thereby reducing any overlapping exposures.

“She’s very diversified, probably more than necessary,” said Barry Glassman, a certified financial planner and founder and president of Glassman Wealth Services. “She has a lot of positions that are similar, just weighted. different funds.

Glassman is also a member of CNBC’s Financial Advisory Board.

McClanahan also said the couple may reduce the number of funds they own.

“They can integrate and make things easier,” she said.

Thackeray said the portfolio includes allocations to foreign stocks and fixed-income funds, and he has been encouraging his clients to consider more foreign investments. He said there may be cheaper opportunities outside the United States, where investments have become more expensive in recent years.

Thackeray said that while Harris’ disclosure listed a large number of buy and sell transactions over the course of the year, mostly in the lower dollar range, this could simply be the result of quarterly rebalancing activity.

How much of an impact these transactions have on the couple’s tax bill depends on whether they occur inside or outside their retirement account.

It’s unclear whether Harris and Emhoff worked with financial advisors. Harris’ office declined to comment.

Harris and Emhoff also revealed that their cash holdings could total around $850,000 or more, depending on the exact balance within a given range.

Thackeray said having such a large cash pool as a safety net is common among his clients these days.

“The good thing about cash balances today is that they are actually getting a return on their investment, whereas in many years before interest rates rose, they weren’t getting a return on their investment,” Thackeray said.

However, since investors need to shop around for the best rates, there’s no guarantee that Harris and Emhoff will get the best returns possible.

“I want all the cash in the bank to earn attractive interest,” Glassman said.

Harris listed the 2020 personal residential mortgage rate at 2.625% for amounts between $1 million and $5 million.

But the problem is that it’s a 7-year adjustable rate mortgage, which means low rates won’t last long. Adjustable-rate mortgages typically offer an initial fixed interest rate that matures over a period of time and then changes annually.

Mortgage rates have risen significantly since 2020, meaning the couple missed out on the opportunity to lock in low rates for the long term.

McClanahan said she urged everyone to lock in what were then record-low mortgage rates.

“Personally, I would have locked in a long-term mortgage at that time,” Thackeray said.

While the couple may be in for a shock in 2027, they can always refinance or pay off their mortgage, McClanahan said.

Thackeray said mortgage rates could be lower in 2027 than they are now.

Harris also listed more than $8,000 in royalty income in 2019 She created the children’s picture book Superheroes Are Everywhere, and a small excerpt from her 2019 memoir The Truths We Hold.

While it’s not a lot of money, it’s a good example of how a side hustle can help boost a family’s bottom line, said Ted Jenkin, a certified financial planner and CEO and founder of oXYGen Financial. . Jenkin is also a member of CNBC’s Financial Advisory Board.

Harris used Beyonce’s “Freedom” as her campaign song.

However, Harris’ latest financial disclosure reveals that Harris was already a fan of Beyoncé’s song long before her recent choice. In 2023, Harris received tickets to a Beyoncé concert worth more than $1,600. The gift comes from: Beyoncé Knowles-Carter.