To paraphrase Gordon Gekko, sin is good. Or in this case, at least a little better than investing your conscience.
At a time when the volatility on Wall Street has many investors re-examining their investments and trying to understand strategies that involve quantitative analysis, strategic investment vehicles or mortgage-backed securities, several small mutual funds have relied on the Wall Street equivalent of the good and evil approach.
The Vice Fund, based in Dallas, has invested substantially in "sin stocks" -- companies that may promote drinking and gambling as well as military contractors and tobacco companies.
"We're not advocating these behaviors at all. We're just looking at this through the eyes of an investor," said the fund's portfolio manager, Charles Norton, who himself does not smoke, drinks "on occasion" and gambles a couple of times a year. The fund's goal is simple, he said: "to just make money."
On the flip side are some of the mutual funds that strive to be socially and morally responsible.
Funds like Domini Social Equity and Citizens Core Growth cherry-pick companies that meet their social and environmental objectives.
"It's the mindset of our investors," said Jeff MacDonagh, portfolio manager at Domini Social Equity fund. He says the fund favors companies that promote "human dignity" and "environmental sustainability."
The two funds also try to use their shareholder investments and proxies as a way to force change on issues like sweatshop labor and the environment.
MacDonagh said that his fund avoids companies that could be seen as preying on addictions to things like alcohol, gambling and tobacco and that it shies away from companies with poor records on human rights and global warming.
George Schwartz, the portfolio manager of the US$282 million Ave Maria Catholic Values fund, said that some investors like to know they are not supporting pornography, abortion or birth control.
But in the end, at least on Wall Street, money talks. And so far this year, vice has trumped conscience.
The US$124 million Vice Fund, which has been trading for five years, is up 14.1 percent this year, compared with 5.1 percent for Standard and Poor's 500-stock index, according to Morningstar, which tracks mutual funds. The fund has outperformed the Standard & Poor's in each of its five years.
Thomas Galvin, portfolio manager of the Excelsior large-cap growth fund, said "sin" stocks tend to be insulated from swings in the economy.
The Ave Maria Values fund has also outperformed the Standard & Poor's since its inception in 2001, Schwartz said. But it has not done so this year; so far this year, the fund is up 1.9 percent.
"When we first started this fund, we were hoping we would at least match the market, and we didn't know how much penalty there would be for screening out certain companies," he said.
Taiwan has arranged for about 8 million barrels of crude oil, or about one-third of its monthly needs, to be shipped from the Red Sea this month to bypass the Strait of Hormuz and ease domestic supply pressures, CPC Corp, Taiwan (CPC, 台灣中油) said yesterday. The state-run oil company has worked with Middle Eastern suppliers to secure routes other than the Strait of Hormuz, through which about 20 percent of the world’s oil and liquefied natural gas typically passes, CPC chairman Fang Jeng-zen (方振仁) said at a meeting of the legislature’s Economics Committee in Taipei. Suppliers in Saudi Arabia have indicated they
A global survey showed that 60 percent of Taiwanese had attained higher education, second only to Canada, the Ministry of the Interior said. Taiwan easily surpassed the global average of 43 percent and ranked ahead of major economies, including Japan, South Korea and the US, data from the Organisation for Economic Co-operation and Development (OECD) for 2024 showed. Taiwan has a high literacy rate, data released by the ministry showed. As of the end of last year, Taiwan had 20.617 million people aged 15 or older, accounting for 88.5 percent of the total population, with a literacy rate of 99.4 percent, the data
CCP ‘PAWN’? Beijing could use the KMT chairwoman’s visit to signal to the world that many people in Taiwan support the ‘one China’ principle, an academic said Chinese Nationalist Party (KMT) Chairwoman Cheng Li-wun (鄭麗文) yesterday arrived in China for a “peace” mission and potential meeting with Chinese President Xi Jinping (習近平), while a Taiwanese minister detailed the number of Chinese warships currently deployed around the nation. Cheng is visiting at a time of increased Chinese military pressure on Taiwan, as the opposition-dominated Legislative Yuan stalls a government plan for US$40 billion in extra defense spending. Speaking to reporters before going to the airport, Cheng said she was going on a “historic journey for peace,” but added that some people felt uneasy about her trip. “If you truly love Taiwan,
NEW LOW: The council in 2024 based predictions on a pessimistic estimate for the nation’s total fertility rate of 0.84, but last year that rate was 0.69, 17 percent lower An expected National Development Council (NDC) report expects the nation’s population to drop below 12 million by 2065, with the old-age dependency ratio to top 100 percent sooner than 2070, sources said yesterday. The council is slated to release its latest population projections in August, using an ultra-low fertility model, the sources said. The previous report projected that Taiwan’s population would fall to 14.37 million by 2070, but based on a new estimate of the total fertility rate (TFR) — the average number of children born to a woman over her lifetime — the population is expected to reach 12 million by
RSS