Scientists: Sinful investments provide the best return – Aftenposten

Scientists: Sinful investments provide the best return – Aftenposten

Ethical investments are high on the agenda of many pension funds and sovereign wealth funds. Oil Fund, for example, a list of around sixty companies excluded from the investment universe, including tobacco companies and weapons manufacturers.

In a recent report by Credit Suisse Research Institute and the London Business School, researchers have looked at the returns from 1900 and until today in various stock markets, writes the Financial Times.

The results show that it is most profitable to put money in alcohol and tobacco:

• In the United States did the tobacco companies it clearly the best in the period, while companies producing ship lies at the bottom. Had you invested one dollar in tobacco companies in 1900 and reinvested the dividends that are paid out, this would have grown to $ 6.28 million today. A shipping investment would comparison given $ 1,225 today.
• In the UK, alcohol companies that do it best, while companies in the engineering sector is on the bottom.

Ethical investments, “the sinful” more profitable

One of the researchers behind the report, Professor Elroy Dimson, also led oil fund strategy advice. He says that the solid performance of companies engaged in tobacco and alcohol do not need to because the products they sell are addictive.

The development may also be that the share values ​​of these companies are “artificially low” because some funds and people who make ethical investments, shadows away. Then return better for those who are left behind.

– Ironically ethical investors therefore partly be why sin gives higher returns, says Dimson, according to a press release.

– Pity pays

In the report he draws also be two funds that began in the early 2000s, The Vice Fund and The Social Index Fund.

The former invests in sectors such as tobacco, alcohol, gaming and arms industry, while the latter stands outside companies engaged in alcohol, tobacco, weapons, gambling and nuclear power.

While The Social Index Fund had a return of 168.8 percent in the period, The Vice Fund has grown by 236.5 percent. Growth on New York Stock Exchange as a whole is the center of these two.

“Many ethical investors emphasize that one can earn good at doing good things. They assume that investing in responsible and principled companies will pay off in the longer term. In reality there is much in our analysis suggesting that sin pays, “says the report.

Lost in tobacco exit

The researchers stressed that there are many good reasons to invest responsibly, but that it is important to be aware of what the price is.

Norges Bank has previously shown what Norway has lost not to invest in all types of companies and all types of sectors. From 2005 to 2012 estimated the bank that the Code had led to a loss of 10.6 billion.

Oil Fund is today at 6.500 billion.

Published: 11.feb. 2015 8:35