There are ETFs for just about everything these days. Amongst the country, commodity, sector and bear/bull ETFs, there are Socially Responsible ETFs.
To cater to those who view the SRI funds as political correctness and who love to decry it, in the spirit of equal opportunity I would like to modestly propose the creation of another one that presents the opposite point of view - the Shunned and Sinner Index ETF. One has to admit, it has a certain ring to it, or more precisely, a TWANG - tobacco, weapons, alcohol, nuclear and gambling.
The S&S ETF investor need not sacrifice for his or her unpopular personal point of view. No indeed. In their paper, The Wages of Social Responsibility, found over at the Social Investment Forum (Ah, the world is full of ironies, isn't it. This very paper that won the 2008 Moskowitz Prize for Socially Responsible Investing confirms that you can make money by doing the opposite), researchers Meir Statman and Denys Glushkov found that "... we also find that ‘shunned’ stocks outperformed stocks in other industries". They cite another study by Harrison Hong and Marcin Kacperczyk called the Price of Sin that found "... that the realized returns of ‘sin’ stocks were higher than the returns of other stocks." These 198 baddies stocks include GE (weapons and nuclear), Coca Cola (alcohol ... so that's the secret ingredient!), Altria (tobacco and alcohol) and Harley Davidson (gambling ... really? riding a bike isn't that dangerous).
An S&S ETF would allow investors to add a Mean tilt to their portfolio to supplement the oft-noted Value and Small Cap tilts. It's time to jump in now, before the efficient market discovers the S&S effect and eliminates it through arbitrage.
We can all have our cake and eat it too though, since Meir and Glushkov also found that the SRI approach can do well by focusing on companies with good community and employee relations and high scores on environmental responsibility. Everyone wins, no one loses, now that's politically correct.
How about it, iShares, Powershares, Claymore isn't there an unexploited opportunity and a clientele to be served?