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Socially responsible index funds?

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  • Tangler
    replied
    “The most common and popular of such funds are those with explicit ESG objectives. But even then, the term means different things to different people, and it is difficult for investors to understand exactly what the ESG portfolios actually achieve. To make matters worse, the ESG scores for different companies published by the professional rating services provided to portfolio managers differ materially. Correlations of ratings between different rating services are as low as 0.42. To put that number in perspective, the correlations between the bond ratings of S&P and Moody’s are more than 0.99. ESG raters cannot even agree when they are considering the same attribute, such as carbon intensity.“
    Burton G Malkiel:
    https://www.advisorperspectives.com/...n-its-promises

    ”ESG is bs”
    Elon Musk

    Leave a comment:


  • Tangler
    replied
    1. this is active management
    2. increases costs
    3. Risks underperforming (like any active management)
    4. ESG ratings (scores) vary tremendously depending on who is issuing them and what their focus is.
    5. Good bogleheads podcast on this out today:

    https://podcasts.apple.com/us/podcas...=1000564469511
    Last edited by Tangler; 05-30-2022, 03:04 AM.

    Leave a comment:


  • jacoavlu
    replied
    Originally posted by VentAlarm View Post

    Your condescension aside, most of us have a lot of stuff going on in our lives. I’m ignorant to much of the data regarding energy production. It doesn’t affect my daily life. I’ve got a job, research, a wife I’m trying to love, a family member with cancer and three kids I’m trying to raise well. It’s impossible to be informed on everything and your priorities aren’t mine.
    hey man, my post wasn’t targeted at you so not sure why you’re triggered.

    In your case, it’s fine to be preoccupied. So then, im sure you personally don’t express strong opinions and or take action against something which you might be too busy to be fully informed about

    reasonable?

    Leave a comment:


  • VentAlarm
    replied
    Originally posted by jacoavlu View Post

    that’s reasonable. “Ignorant” is being too kind in my opinion. I would say such people may have other motives to remain ignorant - such as fitting into a crowd - but that would be assumptive on my part. But my point still stands.

    “Informed” shouldn’t be sitting back and waiting for someone to spoon feed a sane adult what is reality.
    Your condescension aside, most of us have a lot of stuff going on in our lives. I’m ignorant to much of the data regarding energy production. It doesn’t affect my daily life. I’ve got a job, research, a wife I’m trying to love, a family member with cancer and three kids I’m trying to raise well. It’s impossible to be informed on everything and your priorities aren’t mine.

    Leave a comment:


  • jacoavlu
    replied
    Originally posted by AR View Post

    I'd change 'sane' here to 'informed'. Many people just don't understand what the true dangers of nuclear power are and what they aren't. It's not that they have been presented the facts and rejected them, it's that they've literally never seen them. I've had a couple of convos with such people. They are persuadable. So I think they're often sane. Ignorant perhaps, but sane.
    that’s reasonable. “Ignorant” is being too kind in my opinion. I would say such people may have other motives to remain ignorant - such as fitting into a crowd - but that would be assumptive on my part. But my point still stands.

    “Informed” shouldn’t be sitting back and waiting for someone to spoon feed a sane adult what is reality.

    Leave a comment:


  • AR
    replied
    Originally posted by jacoavlu View Post
    if you really want to know what you're investing in, which is a basket of equities that are selected by a committee, you can read some about their methodology here

    https://research.ftserussell.com/pro...ound_Rules.pdf

    i haven't been able to find out who is on the committee

    but the fact that they exclude nuclear power tells me they're captured by woke rules, bc no sane person who truly believes that fossil fuel use needs to be decreased but also understands that the world needs more power, would be opposed to nuclear
    I'd change 'sane' here to 'informed'. Many people just don't understand what the true dangers of nuclear power are and what they aren't. It's not that they have been presented the facts and rejected them, it's that they've literally never seen them. I've had a couple of convos with such people. They are persuadable. So I think they're often sane. Ignorant perhaps, but sane.

    Leave a comment:


  • jacoavlu
    replied
    if you really want to know what you're investing in, which is a basket of equities that are selected by a committee, you can read some about their methodology here

    https://research.ftserussell.com/pro...ound_Rules.pdf

    i haven't been able to find out who is on the committee

    but the fact that they exclude nuclear power tells me they're captured by woke rules, bc no sane person who truly believes that fossil fuel use needs to be decreased but also understands that the world needs more power, would be opposed to nuclear

    Leave a comment:


  • Brains428
    replied
    VFTSX- apparently it's closed to new investors. But may be worth looking into and finding comparable ETFs.

    I do not invest in the above or any "conscious" funds. As said above, probably best to direct money directly to a cause, rather than avoiding investing.

    Leave a comment:


  • CordMcNally
    replied
    If you really wanted to follow true ESG guidelines then you’d just hold cash under your mattress. The trick would be what kind of currency you’d pick since all governments have done harmful things we don’t agree with.

    Leave a comment:


  • VentAlarm
    replied
    I’ve come to realize that I’m just going to invest in (what I think is) the best way possible, shop at stores and restaurants that provide the best goods and foods at the best prices and donate as I see fit.

    Boycotting CFA because they have conservative views or Patagonia because they have liberal views would just take too long and be too exhausting. Chick-fil-A makes a great sandwich and Patagonia makes a great vest and duffle. Every company has things and people I do and don’t agree with, but, in the words of American History X “life’s too short to be pissed off all the time.”

    Leave a comment:


  • snowboundobgyn
    replied
    Wow, this really touched a nerve. Obviously I already did a bit of googling and searching old posts on this site but I thought somebody else may have taken a deeper dive or already have invested in these products. FWIW I will just go ahead and invest in FITLX and VFTAX as originally planned.

    Leave a comment:


  • Tim
    replied
    Originally posted by snowboundobgyn View Post
    Of course iit is not the existence of guns, or the manufacturing of guns, that we are opposed to. That is all fine and good, weapons and war exist, it is a fact of life. It is the relentless efforts of the gun lobby to ensure that no reasonable gun control legislation will ever be passed specifically in this country to prevent the massacre of children at an elementary school. I am only responding because you asked - I did not intend this to be a political thread. I just want to know what funds to invest in. I don't to make money off of these children's deaths, end of story. I am not alone because these funds exist and actually perform just fine.
    Just curious, can you define this: "reasonable gun control legislation"?
    Not a challenge intended. Not intended to be political, just I have never found a definition under the top opinions. Either side of the debate.
    Most trot out a few statistics and ignore the whole situation.

    Leave a comment:


  • jacoavlu
    replied
    Originally posted by Dusn View Post
    The OPs post is reasonable. If VFTAX is the exact same as VTSAX but without the gun manufacturers then it seems like a reasonable option. I doubt that one industry or a few small industries would really affect returns much.

    I also don’t know if it’ll make any difference. Donating would be more effective. And I think going for the highest returns and donating the difference is more impactful in this case.

    A related question might be - how much of a downside is there with VFTAX?
    Product summary
    • Seeks to track the performance of the FTSE4Good US Select Index.
    • Market cap weighted index composed of large- and mid-capitalization stocks.
    • Screened for certain environmental, social, and corporate governance (ESG) criteria.
    • Specifically excludes stocks of certain companies in the following industries: adult entertainment, alcohol, tobacco, weapons, fossil fuels, gambling, and nuclear power.*
    • Excludes stocks of certain companies that have violations of labor rights, human rights, anti-corruption, and environmental standards as defined by the U.N. Global Compact principles.*
    • Excludes companies that do not meet certain diversity criteria.*
    • Employs a passively managed, full-replication approach.

    Leave a comment:


  • Dusn
    replied
    The OPs post is reasonable. If VFTAX is the exact same as VTSAX but without the gun manufacturers then it seems like a reasonable option. I doubt that one industry or a few small industries would really affect returns much.

    I also don’t know if it’ll make any difference. Donating would be more effective. And I think going for the highest returns and donating the difference is more impactful in this case.

    A related question might be - how much of a downside is there with VFTAX?

    Leave a comment:


  • Dont_know_mind
    replied
    I would just invest in cheapest broad index fund and donate to anti-gun lobby, if you want to support them.

    Leave a comment:

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