In this blog post we’ll explore the question: “Sin Stocks ETF — does one exist and how can I trade it?” Keep reading to find out if you can invest in a sin stocks ETF…
Stocks… why buy one stock when you can buy several all at once for one price?
Take a handful of this stock and a dash of that stock and a pinch of another, stir them all together into a bucket and then sell shares of that bucket… every investor gets a little bit.
That’s the thinking behind an Exchange-Traded Fund (ETF), which is a group of stocks that are traded as a single asset on the stock market. If you want to buy and sell an entire group of stocks for a single price (instead of buying each one individually) you can invest in an ETF, providing you with instant diversification, weighting, and industry specialization if you want. Learn more about ETFs at Investopedia. (Don’t confuse them with a mutual fund — click here to learn more about the difference between ETFs and mutual funds from Investopedia).
There are many different kinds of ETFs and you can find all of them at ETF.com: There are ETFs that track the whole market, or ETFs that track commodities, or ETFs that track real estate investments or health care investments, or ETFs that track emerging markets,
WHERE IS THE SIN STOCKS ETF?
You can find just about every kind of ETF under the sun.
But there really isn’t any sin stocks ETFs.
That’s not to say you can’t invest in a basket of sin stocks, but it’s just not as easy as selecting one single “sin stocks ETF” that you can invest in, clicking “buy”, and then going to the beach while you wait for your windfall fortune to be deposited into your bank account.
Fortunately, there are alternatives, which means you can potentially invest in a basket of sin stocks even if you can’t buy a sin stocks ETF specifically.
SIN STOCKS ETF ALTERNATIVES
Below are a few sin stocks ETF alternatives:
Mutual fund: There used to be a sin stock mutual fund but even that succumbed to the pressure of the market and they eased up on their “pro sin” position. They’re now called the “Barrier Fund” (formerly the Vice Fund) and they trade under the symbol VICEX.
Consumer Staples ETF: Many (but not all) sin stocks fall into the consumer staples category — specifically, alcohol sin stocks and tobacco sin stocks. One ETF, the iShares Global Consumer Staples ETF (trading under the symbol KXI) contains a few well-known sin stocks. At the time of this writing, ETF.com reports that KXI’s top 10 holdings include the following 4 sin stocks: Philip Morris (PM), Altria Group (MO), British American Tobacco (BTI/BATS), and Anheuser-Busch InBev (BUD). (Note: this might change, of course!). Within their holdings are other sin stocks including Imperial Brands, Japan Tobacco, Reynolds American, Constellation Brands, Pernod Ricard, and others.
Aerospace and Defense: There are also 3 Aerospace and Defense ETFs that may qualify as a sin stocks ETF because they hold numerous defense stocks — primarily industrial defense companies that make military hardware like General Dynamics (GD), Raytheon (RTN), and United Technologies Corporation (UTX).
Make your own sin stocks ETF the easy way: There is one other option to trade a sin stocks ETF and that is basically make your own (or the equivalent of one). On this site (Disclaimer: I am not a client and have never used their services; this is not a recommendation) you can create a “themed group of investments” and trade that theme. You can create your basket (called a “motif”) of up to 30 stocks, selected and weighted by you, and then trade that basket. You can create your own or buy a pre-created theme by others, including a casino-themed basket of stocks, a military/warfare basket of stocks, the seven deadly sins, and more.
Make your own sin stocks ETF the hard way: You can also just suck it up, buttercup, and go out and buy all the sin stocks. (That is definitely not a recommendation to buy and if you think it is then please stop reading this website right now and don’t ever come back).
So, is there a sin stocks ETF? Unfortunately for investors who are interested in investing in one — no, there isn’t. However, we’ve provided you with a number of options that may not fit your preference exactly but could be a choice for you to consider if you ant to invest in a basket of stocks while you wait for a sin stocks ETF to come along.