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What Kamala Harris’s Financial Disclosure Reveals About Her Investments
U.S. Vice President and Democratic presidential candidate Kamala Harris delivers the keynote address at the Zeta Phi Beta Sorority, Inc. Grand Boulé event at the Indiana Convention Center in Indianapolis, Indiana, July 24, 2024.
Brendan Smialowski | AFP | Getty Images
In her role as vice president, Harris filed a public financial disclosure report for 2023, which was signed in May. It reveals that she favors passively managed index funds in her investment portfolio.
“To me, it was quite refreshing that it appeared to be very passive,” said Dustin Thackeray, a chartered financial analyst and chief investment officer at Crewe Advisors in Salt Lake City, who reviewed Harris’s disclosure.
“She’s definitely not trying to trade on any kind of inside information,” Thackeray said.
Carolyn McClanahan, a certified financial planner and founder of Life Planning Partners in Jacksonville, Florida, who also reviewed Harris’ financial disclosure, said her “heart sings” to see Harris investing in low-cost passive investing strategies.
“To me, she has the cleanest portfolio you’ll ever see from a politician,” said McClanahan, who is also a CNBC insider. Board of Financial Advisors.
“She has multiple index funds; there’s no way she can game the system,” McClanahan said.
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Harris’s disclosure comes as members of Congress debate whether elected leaders should be restricted in the types of investments they can make.
A group of senators is pushing a bill that would prohibit members of Congress — as well as their spouses and dependents — from buying certain investments, such as individual stocks, instead of diversified mutual funds or Treasury bonds. While a Senate panel voted this week to pass the bill, but it’s unclear whether it will eventually become law.
In addition to Harris’s preference for passive investing, the disclosure also reveals more about his financial circumstances, which could offer lessons for other investors, according to experts who reviewed the document.
Harris lists eight different funds in which he invested as part of two separate 457(b) deferred compensation plans from his time working in California, in addition to participation in certain defined benefit pension plans.
At the same time, her husband, Second Gentleman Douglas Emhoff, lists more than 30 fund investments that are mostly passively managed.
Notably, the disclosure only lists certain asset ranges for each fund, rather than specific amounts invested.
Experts who reviewed Harris’s document said the couple could reduce the number of funds they own and therefore reduce any overlapping exposure.
“It’s very well diversified, perhaps more so than necessary, with many funds with similar holdings, just different weightings,” said Barry Glassman, a certified financial planner and founder and president of Glassman Wealth Services.
Glassman is also a member of CNBC Board of Financial Advisors.
McClanahan also said the couple could reduce the amount of funds they have.
“They could consolidate, keep everything simpler,” she said.
The portfolio includes allocations to foreign stocks and fixed-income funds, said Thackeray, who has been encouraging his own clients to consider more exposure to foreign investments. There may be less expensive opportunities outside the U.S., he said, where investments have become more expensive in recent years.
While Harris’s disclosure lists a lot of buying and selling throughout the year, mostly for lower dollar ranges, that could just be the result of quarterly rebalancing activity, Thackeray said.
The impact of these transactions on the couple’s tax bill depends on whether these trades occur inside or outside of their retirement accounts.
It’s unclear whether Harris and Emhoff work with a financial adviser. Harris’ office declined to comment.
Harris and Emhoff also reveal cash reserves that could reach around $850,000 or more, depending on exact balances based on the ranges provided.
Having such a large cash fund as a safety net is common among his clients these days, Thackeray said.
“The good thing about cash balances today is that they are actually generating a return on investment, which they haven’t done for many, many years before the higher rates,” Thackeray said.
However, since it’s up to investors to shop around for the best rates, there’s no guarantee that Harris and Emhoff are getting the best possible returns.
“I hope all that money in the bank is earning attractive interest,” Glassman said.
Harris lists a 2020 mortgage at a rate of 2.625% for a personal residence ranging from more than $1 million to $5 million.
But the problem is that it’s a 7-year adjustable-rate mortgage, which means the low rate won’t last. Adjustable-rate mortgages typically offer an initial fixed interest rate that expires after a certain period of time and then changes annually.
Since 2020, mortgage rates have risen substantially, meaning the couple missed out on the chance to secure a low rate for a longer term.
McClanahan said he urged everyone to secure the low mortgage rates available at that time.
“Personally, I would have secured 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.
It’s possible that mortgage rates will be lower in 2027 than they are today, Thackeray said.
Harris also lists over $8,000 in royalty income in 2019. illustrated children’s book of her own, “Superheroes are Everywhere,” as well as a smaller amount of her 2019 memoir, “The Truths We Hold.”
While the income isn’t a lot of money, it’s a good example of how a side hustle can help contribute to a family’s net worth, according to Ted Jenkin, a certified financial planner and CEO and founder of oXYGen Financial, an Atlanta-based financial advisory and wealth management firm. Jenkin is also a member of CNBC’s Board of Financial Advisors.
Harris is using Beyoncé’s “Freedom” as her campaign song.
However, Harris was a Beyoncé fan long before the recent song choice, her latest financial disclosure reveals. In 2023, Harris was gifted tickets valued at more than $1,600 to a Beyoncé concert. The listed source for that gift: Beyoncé Knowles-Carter.