The ‘sin stocks’ outperform ethical ones

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A TEN-year study has found that ethical investments perform significantly worse than those which have less moral foundations.

Trader and investor Vince Stanzione, founder of www.fintrader.net, looked at investments around the world over one, five and 10-year periods and found a very noticeable difference in returns.

A set of stocks from organisations seen as green or ethical, such as wind power, solar energy and organic food, and those with high ethical values, lost around 10 per cent of the original £1,000 investment over a decade.

However, a basket of shares in ‘sin stocks’ including tobacco, alcohol, fast foods and gun manufacturers, would have made a 150 per cent increase. Among the successes were British American Tobacco at 435 per cent up and brewer SAB Miller at 486 per cent.

The more ethical companies performing well included Whole Foods Markets at 173 per cent up and agricultural equipment maker Deere which gave a 151 per cent return.

Mr Stanzione warned investors to beware of anything with the words clean, green or ethical in the title, saying they may be good for the conscience but could be less beneficial to the bank balance.