Impact funds frequently operate on a «you're out» basis. An UBS analyst has established that fund managers have a negative bias towards pornography.
Socially responsible investments? The conventional answer from fund managers is to opt for those which exclude oil, coal, weapons, alcohol, tobacco – as well as gambling and pornography. The booming impact investment industry generally operates by ruling out certain types of investments, based on specific environmental, social, and governance criteria.
Fund managers have a surprising bias when it comes to exclusions, an UBS analyst has revealed: Stephen Caprio calculated that nearly 40 percent of all bond funds shut out pornography, far more than the less than 30 percent which rule out fossil fuels, gambling, and weapons, according to «Bloomberg».
There is no rational reason for the difference, but it isn't the first time that market analysts have identified a somewhat arbitrary method for criteria of which investments to exclude from impact funds. A Citigroup analyst recently found that fund managers were willing to invest in tobacco or oil stocks, provided the companies maintained clear and transparent guidelines.
