Tuesday, April 14, 2009

Go and sin no more

The Vice Fund (VICEX) , a mutual fund which invests in the so-called "sin" industries like distillers, casino operators and cigarette companies, has lost 42% over the past twelve months. That's actually four percentage points worse than the Standard & Poor's 500 index overall.

Meanwhile the Ave Maria suite of mutual funds, which invest only in companies that comply with certain Roman Catholic values, have done better. The Ave Maria Growth Fund is only down 33%. It's beaten Vice by nine points and the S&P by five.

It's hardly a miracle -- but maybe enough to raise eyebrows on Wall Street, a secular place where the usual invocation is "let us prey."

Conventional wisdom there says that "sin" stocks are safe places to park your money during a downturn. Such companies often enjoy strong cash flow, a terrific advantage in a tough economy, as well as pretty resilient businesses.
As for the Ave Maria funds: These were launched earlier this decade by Schwartz Investment Counsel, and they are Catholic not in what they own but in what they avoid. The funds eschew stocks that breach a variety of precepts, mostly around things like involvement in abortion or giving money to Planned Parenthood.

The irony? Their rules have steered them clear of such disasters as AIG, Bank of America, Citigroup, and General Motors.


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