New JUST ETF - thoughts?

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gouverneur
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New JUST ETF - thoughts?

Post by gouverneur » Thu Jun 14, 2018 6:43 am

https://slate.com/business/2018/06/just ... ually.html

If I understood correctly, the basic idea is, for a 0.20 expense ratio, you get a fund composed of 500 of the 1,000 largest companies in the US market, but ordered by a set of metrics based on broadly held American perceptions of what makes a "good" company (how it treats its workers, consumers, environment, etc.) rather than market capitalization.

It raises an interesting question of how (or whether) to incorporate ethical considerations into our investments, which is in tension with the philosophy of index investing.

Any thoughts? Any interest in buying into this concept? What will we call it: ethics tilt?

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JoMoney
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Re: New JUST ETF - thoughts?

Post by JoMoney » Thu Jun 14, 2018 7:15 am

Sounds like a slightly different take on "Socially Responsible Investing".
...just Capital’s board members, who include Deepak Chopra and Arianna Huffington—seem almost designed to elicit eye-rolling and snark...
Yup.
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TheTimeLord
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Re: New JUST ETF - thoughts?

Post by TheTimeLord » Thu Jun 14, 2018 7:18 am

Surprisingly I am interested.
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czeckers
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Re: New JUST ETF - thoughts?

Post by czeckers » Thu Jun 14, 2018 7:20 am

My recollection is that socially responsible investing tends to lag the broader markets.
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Jack FFR1846
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Re: New JUST ETF - thoughts?

Post by Jack FFR1846 » Thu Jun 14, 2018 7:21 am

Unless you're buying IPO shares, you're not buying from the company....you're buying from previous shareholders. So that GranolaTreeVeganCageFree company you are buying could see your funds going to the likes of Joseph Stalin, Adolf Hitler and Sadam Husein who are going to use the money to promote their business distributing free cigarettes laced with meth to kindergardeners. Yes, I know they're dead, but you get the point.
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b42
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Re: New JUST ETF - thoughts?

Post by b42 » Thu Jun 14, 2018 7:25 am

From the article:
If you’re currently invested in S&P 500 index funds, you should certainly consider moving all or some of that money into the Just 500 instead. It might be a little bit less liquid, especially in its early days, and, yes, you might miss out on substantial stock gains from the excluded big evil companies. Then again, you might miss out on substantial stock declines from those big evil companies, too.
It seems that the JUST ETF is another active fund with it's own methodology.

carguyny
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Re: New JUST ETF - thoughts?

Post by carguyny » Thu Jun 14, 2018 7:30 am

I don't see how the can achieve truly ethical investing and still be left with 500 companies. Maybe you can argue it's incremently better? But having visited numerous factories in China and India - you need to exclude any company that makes products there.

I would happily see a 20% increase in product prices for worker conditions to significantly improve and pay for it that way vs some oddly ranked ETFs by people that are getting shown what companies want them to see rather than visiting factories etc on unplanned visits.

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Rick Ferri
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Re: New JUST ETF - thoughts?

Post by Rick Ferri » Thu Jun 14, 2018 7:41 am

Here is the reason the article says the fund is “better” than the S&P 500:
it’s not better because it’s going to outperform the S&P 500 funds (it might, it might not, no one knows). Instead, it’s better because the stocks in it are chosen according to what you might call a crowdsourced dynamic values-based algorithm.
Wow! This MUST be better because it’s so sophisticated and complex sounding how could it NOT be better?

:oops: I’m joking. If this is your thing, and you’re willing to pay more for it, then go for it.

Rick Ferri
Last edited by Rick Ferri on Thu Jun 14, 2018 7:43 am, edited 1 time in total.
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JoMoney
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Re: New JUST ETF - thoughts?

Post by JoMoney » Thu Jun 14, 2018 7:43 am

I think the advantage of an ETF like this, is that investors that do agree with it can choose it, and then maybe the activists who try to influence board decisions and proxy votes can stop harassing Vanguard's broad market index funds and investors to support their proxy initiatives or drop stocks they don't agree with.
"To achieve satisfactory investment results is easier than most people realize; to achieve superior results is harder than it looks." - Benjamin Graham

IlliniDave
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Re: New JUST ETF - thoughts?

Post by IlliniDave » Thu Jun 14, 2018 8:09 am

The problem for me with those types of "filters" is that there's no way of really knowing how much the values/morality of the fund's decision makers overlap with my values/morals. So I try to leave that sort of judgement out of investing.
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snarlyjack
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Re: New JUST ETF - thoughts?

Post by snarlyjack » Thu Jun 14, 2018 8:54 am

I have read articles on people picking individual dividend paying
stocks that are analyzing the company values.

The idea is that dividend paying stocks are more share holder friendly,
think J & J. They feel dividend paying stocks are giving back to the share
holders & are more fiscally responsible with their money. So when it
comes to buying a individual stock are you going to buy BP Oil or
Well Fargo Bank or a different problem free company.

I think these choices happen all the time with individual stock pickers.
Now it seem they are bundling "choice stocks" into a etf. The problem
with this thinking is the tobacco, alcohol & gaming companies are great stocks.

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Carlos Danger
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Re: New JUST ETF - thoughts?

Post by Carlos Danger » Thu Jun 14, 2018 8:57 am

My thoughts are it's idiotic. 1st of all, what these funds often define as socially responsible or moral, I define as socially reckless or immoral. 2nd of all I invest to build wealth, not to express my political feelings. If the some company is the biggest donor to the candidate for President I do not vote for in 2020, or advocates against a constitutional amendment in the Bill of Rights I personally support, I would still want to be in that company if it's a good investment.

ChinchillaWhiplash
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Re: New JUST ETF - thoughts?

Post by ChinchillaWhiplash » Thu Jun 14, 2018 8:58 am

On a similar train of thought, are there any funds that only hold companies that make/manufacture their products in the US?

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