Apparently, It Pays to Be Naughty - Vice Fund vs. Socially Responsible Fund

A comparison of Vice Fund vs. Socially Responsible Fund

I heard an anecdote contrasting these funds on Bloomberg on my nifty Sirius Satellite radio and thought I'd check out how the angel on the left shoulder fares against the devil on the right. Yes, there is actually a fund called the Vice Fund, ticker VICEX, that invests in none other than tobacco, casinos, military and alcohol companies. As you may have heard, "socially responsible" investments are all the rage now as well, with the most notable fund being the Neuberger Berman Socially Responsible Investment fund NBSRX.



Interestingly, in the year ago period, the Vice Fund beats both the Socially Responsible Fund AND the S&P500 at 3% up for Vice vs. a loss of 4-5% for the benchmarks.





Next, check out the 5 year view, as the Vice Fund completely trounces both benchmarks at 144% for Vice vs. less than 60% for the benchmarks:








Some notables:

• Vice Fund gets a 5 star Morningstar rating vs. 4 for Socially Responsible
• Vice Fund has a higher expense ratio at 1.75% vs. .9%

Vice Fund Top 10 Holdings:

Altria Group Inc. (MO)
9.07%

Carolina Group (CG)
7.15%

MGM Mirage, Inc. (MGM)
5.63%

International Game Tech. (IGT)
5.34%

Diageo PLC ADR (DEO)
5.26%

British American Tobacco PLC ADR (BTI)
4.95%

Boeing Company (BA)
4.81%

InBev (INB)
4.33%

Wynn Resorts, Ltd. (WYNN)
4.13%

Lockheed Martin Corporation (LMT)
3.97%





Socially Responsible Fund Top 10 Holdings:


Comcast Corporation (CMCSK)
4.39%

E.W. Scripps Company (SSP)
4.39%

Anixter International (AXE)
4.13%

Altera Corp. (ALTR)
3.98%

Danaher Corporation (DHR)
3.76%

Willis Group Holdings, Ltd. (WSH)
3.74%

UnitedHealth Group, Inc. (UNH)
3.60%

Bank of New York Mellon Corporation (BK)
3.54%

American Express Company (AXP)
3.32%

BG Grp (BG.)
3.25%


I found the top holding of Comcast in a Socially Responsible Fund to be somewhat ironic, given that they are evil, anti-customer service monopolists (can you tell I have trouble with my cable and internet service?). However, I'm sure they've vetted all their holdings to ensure there are no dealings with the Sudan, profiting from blood diamond trade, etc. In conclusion, let your conscience be your guide at your portfolio's peril.

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