Thursday, October 19, 2006
Trade Blue
Rob Wherry at SmartMoney (10/17; sorry, no direct link) reports:
ACROSS THE COUNTRY, political opponents are duking it out as this year's election season approaches the finish line. But today marks the beginning of a political drama that will play out in the mutual fund world: the official launch of the left-leaning Blue Fund, a socially responsible mutual fund that sells itself as investing in companies that "act blue" and "give blue." In other words, companies that tend to favor the Democrats. ...The Blue Fund, which is based on the S&P 500 index, has a primary screen that looks at federal political contributions. In order to qualify a firm's top three executives and its political action committee must be a net contributor to the Democratic Party over the last 10 years. It then must pass additional ethical screens based on corporate governance, treatment of employees, human rights and the environment....The Blue Fund's parent company say its research shows "blue" companies — about 80 out of the S&P 500 — outperformed the broader market by 10% over the last five years.
As Wherry notes, the Blue Fund charges a hefty premium and it may outperform because Blue sticks are smaller and more growth-oriented than the rest of the S&P. Still, it's good to see that even in the heart of American business, there are people who care more about their country than about their tax break.
More blogs about politics.
