Sin Stock Returns

The Effect of the Business Cycle on the Performance of Socially Responsible Equity Mutual Funds

“…The study also extends previous work comparing the performance of secular SRI funds with religious funds and the Vice Fund (Chong et al, 2006;Fabozzi, Ma, & Oliphant, 2008;Hemley et al, 2005;Hoepner & Zeume, 2009;Kurtz & diBartolmeo, 2005;Naber, 2001;Shank, Manullang, & Hill, 2005), which produced mixed findings. This comparison permits the identification of the relative value added by the criteria of SRI screens and the value added by giving preference to the 'sin" stocks usually excluded from SRI funds.…”

“…A portfolio invested in vice industries appeared more stable than its conventional benchmark (Hemley et al, 2005). However, studies comparing portfolios built on vice and SRI found that a portfolio built on vice did not out-perform the Domini Social Equity Fund (Hoepner & Zeume, 2009) or the S&P 500 (Fabozzi et al, 2008;Hemley et al, 2005;Hoepner & Zeume, 2009;Shank et al, 2005). A study of bull and bear markets during the period 1990-2002 concluded that the Vice Fund exhibited less risk than the S&P 500 (Hemley et al, 2005); hence lower returns would be consistent.…”

Social Preferences and Portfolio Choice

“…Hence, given the increasing interest in socially responsible investments (EUROSIF (2012), SIF (2012)) one should expect that SRI funds perform at least as well as the market. Some papers suggest that SRI funds could potentially outperform conventional funds or that the performance is the same, but others find that SRI funds underperform compared to other funds (Bauer, Otten and Koedijk (2005), Kempf and Osthoff (2007), Fabozzi, Ma and Oliphant (2008), Renneboog, Ter Horst and Zhang (2008), Hong and Kacperczyk (2009), Edmans (2011). Therefore, it is unlikely that the steady growth in socially responsible investments can be explained by financial reasons alone.…”

“…However, there is also clear evidence that investing socially responsible can be financially costly. For instance, Fabozzi, Ma and Oliphant (2008) and Hong and Kacperczyk (2009) find that divesting from 'sin' industries that involve weapons, tobacco, alcohol or gambling is costly because these companies tend to perform better than 'non-sin' companies. Also Renneboog, Ter Horst and Zhang (2008) find that SRI equity funds underperform relative to conventional equity funds.…”

Economic Aspects of Sin Industry in Croatia

“…Autor tvrdi da je kod konzumacija pojedinih dobara riječ o tome da potrošač donosi odluku koja se ne mora temeljiti na racionalnom izboru, kao što smatraju ekonomisti, nego na potrebi potrošača. Industrija poroka svrstava se u skupinu ograničene konkurencije, odnosno monopolistička tržišta (Fabozzi, Ma i Oliphant, 2008). Djelatnosti industrije poroka visoko su regulirane glede nadzora proizvodnoga procesa, zabrana i visokoga poreznog opterećenja, a važno je i ograničenje ulaska na tržište.…”