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Socially Responsible Funds?

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  • The White Coat Investor
    replied
    You may find this post interesting:

    https://www.whitecoatinvestor.com/esg-impact-investing/

    Leave a comment:


  • Zaphod
    replied
    I know some do it for religious reasons, and not a lot you can do about that if you're a believer.

    I think it preposterous and basically just grift as funds cant charge much anymore and this works for them nicely.

    I mean a bank is on the list, so an entity that funds and holds deposits, performs banking for a bunch of the no touch companies is allowed? A bunch of tech companies that manufacture using basically slave labor? I mean where does one draw the line.

    Of course they underperform its a massive tilt away from the actual market.

    If someone chooses it, I think they have to do so knowing that returns are terrible, but they feel compelled. Heck of a trade off.

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  • ENT Doc
    replied
    We tell people to abandon emotion with investing with respect to timing of the market, listening to the news, etc.  Emotional investing leads us astray in many ways, rarely for the better and even in those cases it's more luck of timing than anything.  Socially responsible investing is illogical on multiple levels, many of which have been mentioned, thus they are primarily used for virtue signaling - an entirely emotional construct.  Why on earth would anyone advocating for emotional abandonment with investing otherwise advocate for emotional investment with these socially responsible funds?  Because they're being emotional.  Put those advocates on the same list of things to ignore.  Stay the course.

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  • Kamban
    replied
    Socially responsible is a moving target and one person's socially responsible Jim Bean Whiskey is another person's irresponsible. A Muslim or a Jew might consider bacon and other pork products socially irresponsible to his faith while the Christian might consider it the best thing on the breakfast menu.

    So I avoid all this nonsensical socially responsible funds and invest in index funds that buys stocks of legal companies. I do social responsibility on my own as an individual by not buying cigarettes, not drinking to oblivion, buying hybrid or electric cars and so on. I try and separate investing from personal morals.

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  • MPMD
    replied





    you’re not really funding or supporting a company by buying a stock. 
    Click to expand…


    right, but if you are collecting dividends (which even VSTAX kicks)…. a dividend dividend is a cash payment from a company’s earnings. Dividends are announced by a company’s board of directors and distributed among stockholders. The dividends you collect are your investor’s share of a company’s profits either directly as a share holder or within a fund.  if you don’t want to collect cash from the profits of gun manufacturers, cigarettes, etc…then one has to look at where their dividends are coming from by reading the prospectus for an index or mutual fund….
    Click to expand...


    Sure that's true.

    I just think you get way off into the ethical weeds here. Entirely passive and comparatively minuscule engagement with a gun company stock (as an example) doesn't in any way endorse or support them.

    As others have said trying to create these funds would require a ton of effort and ceaseless vigilance.

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  • Lordosis
    replied
    VICEX!  Great concept and at first thought it seems like it would do well.  Also whoever came up with the ticker deserves some credit.  However when you really consider it there is quite a bit of political risk involved.  Some changes to the law could ruin these types of companies.

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  • nephron
    replied
    That's not a surprise that the evil fund would have high fees.

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  • Lithium
    replied
    These kinds of "socially irresponsible" funds are out there.  VICEX is one.  I played around with it on stockcharts.com and it has underperformed the S&P 500 on any time period I cherry picked in the last 10 years (did better when I went 15+ years out).  The 1.49% ER I think is hard to overcome.

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  • nephron
    replied
    somebody should create an "evil" fund with wells fargo, Iranian oil, most of the pharmaceutical companies, and see how it performs.    I bet that it beats the index funds.

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  • Lordosis
    replied
    Are there socially irresponsible funds?

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  • Panscan
    replied
    Where do you draw the line? I bet if we really analyzed the companies within these "socially responsible" funds we could find plenty of shady stuff.

    I think the best thing to do is make as much money as you can and donate it or use it to advance your goals. That would do a lot more than picking one fund over the other.

    Leave a comment:


  • bean1970
    replied


    you’re not really funding or supporting a company by buying a stock.
    Click to expand...


    right, but if you are collecting dividends (which even VSTAX kicks).... a dividend dividend is a cash payment from a company's earnings. Dividends are announced by a company's board of directors and distributed among stockholders. The dividends you collect are your investor's share of a company's profits either directly as a share holder or within a fund.  if you don't want to collect cash from the profits of gun manufacturers, cigarettes, etc...then one has to look at where their dividends are coming from by reading the prospectus for an index or mutual fund....

    Leave a comment:


  • MPMD
    replied




    I don’t see why anyone would care if the stocks they invested in was socially responsible.  Unless you are investing in the IPO, the money you spend buying the stock doesn’t go into funding the company, it just goes into buying the stock from someone who is selling the stock.  When the stock price goes up and you are able to sell it for more then it’s worth, the profit you make from selling the stock or the dividend that you collect from the stock just goes into your pocket and remains separate from the company.   I suppose that from a macro-perspective, if everyone stopped buying a socially irresponsible stock, the stock price would go down and the primary stock owners would suffer losses.  But the company itself would still function as it always does assuming that it still generates a profit.   If everyone agreed to not buy gun stocks but selling guns remained profitable, the company will continue to sell guns.   I would assume that even if the stock price went down, it would eventually be a bargain and market forces would drive the stock price up as more people realized that it was being discounted.   I suppose that the only advantage to socially responsible funds would be that if you assumed that people would stop doing socially irresponsible things- ie stop buying guns, purchasing cigarrettes, buying oil, etc, the companies that are engaged in these businesses would do worse in the long term.
    Click to expand...


    that's exactly my take.

    you're not really funding or supporting a company by buying a stock.

    Leave a comment:


  • nephron
    replied
    I don't see why anyone would care if the stocks they invested in was socially responsible.  Unless you are investing in the IPO, the money you spend buying the stock doesn't go into funding the company, it just goes into buying the stock from someone who is selling the stock.  When the stock price goes up and you are able to sell it for more then it's worth, the profit you make from selling the stock or the dividend that you collect from the stock just goes into your pocket and remains separate from the company.   I suppose that from a macro-perspective, if everyone stopped buying a socially irresponsible stock, the stock price would go down and the primary stock owners would suffer losses.  But the company itself would still function as it always does assuming that it still generates a profit.   If everyone agreed to not buy gun stocks but selling guns remained profitable, the company will continue to sell guns.   I would assume that even if the stock price went down, it would eventually be a bargain and market forces would drive the stock price up as more people realized that it was being discounted.   I suppose that the only advantage to socially responsible funds would be that if you assumed that people would stop doing socially irresponsible things- ie stop buying guns, purchasing cigarrettes, buying oil, etc, the companies that are engaged in these businesses would do worse in the long term.

    Leave a comment:


  • Peds
    replied
    lol these are the top 10 of VFTAX:



















































    Microsoft Corp.
    Apple Inc.
    Alphabet Inc.
    Facebook Inc.
    Johnson & Johnson
    JPMorgan Chase & Co.
    Visa Inc.
    Procter & Gamble Co.
    Bank of America Corp.
    Walt Disney Co.

    all of these companies have been nothing but great towards society at all times ?????


    Leave a comment:

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