Wednesday, March 23, 2005

Vice Fund Has Its Virtues

I have been wondering if you should expect socially responsible funds to do better than average because the same values that make companies socially responsible also make them good well run companies. Or should you expect that they return less than average because there are extra expenses that go along with being socially responsible. Score one for the later.

Dan Ahrens and investors in his Vice Fund, the top performer the past 12 months among growth-stock mutual funds with less than $500 million of assets, have been rewarded for pursuing a socially irresponsible strategy. Ahrens targets shares of companies that run casinos, sell beer and cigarettes, and make weapons.

His fund rose nearly 20 percent in the past 12 months (through March 2), the biggest advance of 84 funds tracked by Bloomberg that have less than $500 million of assets and concentrate investments in companies that generate above-average earnings growth.

The performance surpassed the Sierra Club Stock Fund, a leader in the socially responsible category, which gained 6.7 percent.
via Seattle Times

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