Socially Responsible [Investing]

[columbia]

I pulled the lever on the VFTAX (Vanguard Social Index) fund.

It avoids 3 particular things of extreme non-interest to me (to put it politely). I’m ok if it underperforms the market, although it has bested it for the last 10 years; perhaps because of an overweight on tech?

[Valuethinker]

If you believe in guns and tobacco, odds are you are not in favor of the Wall Street crowd.

This must be a broad generalization. Do you have any data to support this assertion? Are guns or tobacco, as you say, a belief system? Help us all up on to your train of thought here.

This is a personal antidotal observation.

The people I have run across who advocate for things like this tend to risk seeking, individualist who are nonconformist, and distrustful of institutions.

They are also overconfident, and if they can come up with a better strategy then they feel that they can probably execute it better as well.

I find they have the same attitudes as gold bugs, and their preference to hold physical gold over gold funds.

The delusion here, and it's very common, is that one can "beat the system".

That somehow one has seen some pattern that the market as a whole has not cottoned on to, and thus there are excess profits - $20 bills lying in the streets.

We reject that as a general notion here, that you can beat market efficiency.

(Off topic comments removed by Moderator Jbranx)

[Whakamole]

I pulled the lever on the VFTAX (Vanguard Social Index) fund.

It avoids 3 particular things of extreme non-interest to me (to put it politely). I’m ok if it underperforms the market, although it has bested it for the last 10 years; perhaps because of an overweight on tech?

Overweight on tech, financials (a very nice recovery in the past 10 years - 2009 was the bottom of the bank crisis), and health care, and underweight on energy and utilities.

[jbranx]

I removed some off topic comments in this thread. The topic is SRI, socially responsible investing. Comments about the shortcomings of people interested in SRI are unacceptable. See Forum Rules 4(b) on discussions of the crimes, shortcomings or stupidity of other people. Moderator Jbranx.

[SGM]

I own the whole market. I have my own ideas about what is socially responsible and would not depend on others to make this judgement.

[columbia]

I certainly missed this in March:


Vanguard to expand ESG offer with active global equity fund
https://institutional.vanguard.com/VGAp ... Info030719

Wellington Management will handle it.

[BSBHead]

Having seen this play out in the institutional space, I think the hardest thing to figure out is what is socially responsible? I get big tobacco, guns, and oil & gas, but what about companies that pay their employees significantly lower than average or have a big carbon footprint (e.g. airlines)? What about companies with potential privacy related issues (e.g. social media)? Basically, this is an impossible equation in my view given every person in the world has a different view of what is socially responsible.

[pdavi21]

Because the opposite of active management is also active management.

Really, the socially responsible list looks like a joke to me, but I am not on the ethics committee.

[columbia]

That VG fund will hold only 40 companies (to start). I don’t even know how to parse that approach.