If 2025’s economic narratives had an underdog, it could very well be deregulation, and the Free Markets ETF (NYSE:FMKT) is positioning itself to capitalize on its full potential before it's fully recognized by the broader market.
The FMKT ETF is up 10% since inception. Check out the live price here.
Coming to the market with the goal of making money off the Trump administration’s broad unwinding of federal rules, FMKT, which was launched in June this year, actively seeks to front-run a policy revolution, in the opinion of Michael Gayed, co-portfolio manager of the fund.
“Deregulation has become the untapped policy tool that can improve profitability, unlock capital, and accelerate innovation,” Gayed explained to Benzinga.
What Distinguishes This Wave Of Deregulation?
Deregulation does not usually make headlines like inflation and interest rates. However, Gayed believes that 2025’s wave is different in magnitude and purpose. With monetary levers losing their potency, Trump’s anti-red-tape crusade is quickly becoming the growth driver of choice.
“It’s quietly becoming a major macro tailwind, even if it doesn't get headline treatment like inflation data and interest rates,” he said.
And it’s not all theory. FMKT sees genuine upside in industries long hamstrung by duplicated supervision: financials, energy, healthcare and digital platforms. The fund’s biggest holdings are a resume of deregulation favorites:
Robinhood Markets Inc (NASDAQ:HOOD): Potential winner if trading/reporting regulations ease
Uranium Energy Corp (AMEX:UEC): Set up for fewer permitting issues
Constellation Energy (NASDAQ:CEG): Riding pro-nuclear and utility reform momentum
AI + Policy = Alpha?
Gayed shared that FMKT employs an AI-powered screening model that searches for high ROIC, firm SG&A controls and regulatory acuity. FMKT’s AI model “looks for firms where small changes in cost structure or compliance loads translate into meaningful earnings expansion.”
That is, the ETF is set to catch the “hidden tax refund” when onerous policies are unwound. Deregulation, viewed through this prism, is an undercover stimulus, and FMKT’s plan is to move ahead of the market by pricing it in.
Tactical? Yes. But Mostly Structural.
The 2026 midterms might cause political whiplash, but FMKT’s thesis is structural rather than tactical, according to Gayed. As much as the fund feeds on present momentum, the managers feel that several regulatory rollbacks have stickiness, even if there are leadership changes.
“Deregulation has momentum now, but it's part of a longer-term policy cycle, one that tends to swing over a multi-year period, sometimes over a decade. Even if political party leadership changes, many of the deregulatory moves already underway (in health care, energy, fintech, etc.) are likely to stick or evolve slowly. Our approach is to identify durable, economically compelling themes that persist,” said Gayed.
The Coming Boom?
FMKT thinks deregulation might spur more than margin growth, maybe a reshoring revival. Years-idled capital spending may at last receive approval if timelines for permits get shorter.
If just a percentage of 100,000 rules are unwound, small-cap financials, crypto platforms and digital health companies could become leadership sectors.
“Small-cap financials gain credit flexibility, crypto platforms get legal clarity and institutional flows and digital health firms see margin expansion from reduced compliance burdens. The common thread is faster scaling, greater innovation, and an upward earnings revision cycle. FMKT is built to capture that upside early,” Gayed explained.
It’s like a policy-driven CapEx unlock, with FMKT waiting in the wings.
FMKT is a bet that less government means more margin. Amid a world transfixed by Fed Chair Jerome Powell’s every utterance, this fund is quietly reading the fine print of federal rulebooks and asking, “What happens when you delete half of it?”
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