The Stock Act of 2012 required all Members of Congress to publicly file and disclose and financial transactions involving stock and other securities within 45 days with the intent to stop insider trading. Electronic disclosures that were filed within the 45 day window were rare throughout most of the period following the passing of the STOCK Act. The adherence to these disclosure requirements has been stricter following the 2020 congressional insider trading scandal, which was chosen to be the start of the back test window.
This strategy uses the transaction date of reported trades to normalize for Congressmen reporting their trades after varying lengths of time and to mitigate the risk of Congressmen reporting trades beyond the 45 day window, which is not an uncommon occurrence. For historical back testing, we use the report date to filter out trades to avoid survivorship bias.
One risk of this strategy is that a person's status as a government representative does not inherently correlate with above-market returns. Per the STOCK Act, members of Congress are required to file reports disclosing securities transactions within 45 days after the trade takes place, but this delay means that this tracking fund can not immediately correlate with any Congressional member's portfolio.