Investing in vice can pay, but not as much as this index
One in eight equity investors hold so-called "vice" stocks, with those buying alcohol and tobacco companies outperforming and those buying into casino and marijuana companies underperforming the average investor.
The findings, based on data from 230,000 investors and returns as of April 13, 2015, come from financial firm SigFig, which found wealthier, older investors in red states are most likely to hold stock in public tobacco companies, namely Altria Group (MO), Philip Morris (PM), Lorillard (LO) and Reynolds American (RAI).
The more conservative crowd was also more likely to invest in alcohol makers Anheuser-Busch (BUD), Molson Coors Brewing (TAP), Boston Beer (SAM), Craft Brewers Alliance (BREW) and Constellation Brands (STZ).
Less-affluent investors in blue states were more likely to own stock in casino companies, including Las Vegas Sands (LVS), Wynn Resorts (WYNN), MGM Mirage (MGM) Melco Crown Entertainment (MPEL), Boyd Gaming (BYD) and Penn National Gaming (PENN).
The more liberal investors were also more likely to buy marijuana producers Medical Marijuana (MJNA), Growlife (PHOT), Hemp (HEMP) and GW Pharmaceuticals (GWPH).
The research attempts to answer the question, does vice pay? The answer would be a resounding no, at least in comparison to investing in the S&P 500 (SPX), which outperformed even the better performing vice sectors of cigarettes and booze.
"The return the investor is seeing, what is the cost to the public health?" Jesse Bragg, media director for Corporate Accountability International (CAI), asked in talking to CBS MoneyWatch about his organization's work, which on Wednesday involved attending Philip Morris International's annual shareholder meeting in New York to protest its marketing campaign, Be Marlboro, which CAI and others contend targets children.
Philip Morris rejected the assertion, stating in an email: "We do not market to minors. Our marketing is about competing for market share by encouraging adult smokers to choose our brands instead of those of our competitors."