Category Archives: financial economics

Vanguard FTSE Social Index is a dog of an investment



Little wonder that no hedge fund headhunts from the New Zealand superannuation fund. Their staff turnover ratios are below 10% and often 5% and the CEO is paid a pittance by hedge fund standards.

The house always wins even among sin shares

… the mean excess return varies from a low of 5.3% (alcohol), through 9.6% (biotech), 10.0% (adult services), 14.7% (tobacco) and 24.6% (weapons), to a high of 26.4% (gaming).

Source: Dimson E; Marsh P; and Staunton M. “Responsible investing: does it pay to be bad?” Global investment returns yearbook. Credit Suisse Research Institute 2015.

Ben Bernanke only owned tobacco shares when he became chair of the Fed

During the transition period, 1947-1965, shares in the tobacco industry underperformed by 3 percent per year in the USA. Still, it was a temporary trend and the decades from the 1960s to the 2000s, when the health impact of tobacco was well known, saw tobacco companies outperforming comparable firms by over +3 percent per year. 

Source: Responsible Investing: Does It Pay to Be “Bad”?  – Credit Suisse.