Buy cheap sin stocks to profit from the ethical investment boom
Flood of money flowing into ethical funds is creating bargains in oil, tobacco and mining stocks
Tobacco shares could be a bargain if investors ignore ethical concerns
Credit: Danny Lawson/Danny Lawson
The ethical investment boom has given DIY investors the chance to buy “sin stocks” at unjustified discounts, experts have said, as more companies become blacklisted by large institutions.
Last year, one in three pounds invested in funds went into those that take into account environmental, social and governance (ESG) factors, according to financial data group Morningstar.
Heavyweight investors are increasingly selling their stakes in companies they view as failing to meet these ethical standards.
Weekly outlook: FCA investment pathways go live; Hargreaves, BP and Glaxosmithkline report
The key events for UK wealth managers for the week starting 1 February
Monday 1 February
– FCA investment pathways go live
Two years after the City watchdog published its proposed rules on investment pathways, the industry finally unveils its four “buy and forget” solutions for drawdown customers.
The project has received a fair amount of pushback from critics, including AJ Bell chief executive Andy Bell who called it “fundamentally flawed”, arguing the adviser-less solutions risk funnelling people into investments that do not suit their needs and are an excuse for “pension providers to line their pockets by peddling their own in-house funds with little or no control on fund charges”.
London’s two biggest oil companies are set to report their results for a year which has included a giant price war between Saudi Arabia, a drop in oil prices due to Covid and massive write-offs.
In the beginning of 2020 all eyes were on the Organisation of the Petroleum Exporting Countries (Opec) whose agreement with Russia to artificially reduce supply and therefore push up oil prices came to a close.
The two parties could not come up with a new agreement, and instead Russia and Saudi Arabia kicked off a production war, pushing down global prices.
Brent crude, the international standard, had started the year on around 61 dollars per barrel, but dropped to 55 before January was out.
AIM performance in 2020 was dazzling and looks set to continue 25 Jan 2021
Many smaller companies did well through the first year of the pandemic. Chris Boxall, co-founder of AIM specialists Fundamental Asset Management, reviews AIM performance in 2020.
London’s AIM market had a remarkable 2020, ending the year with its market value at an all-time high and with the AIM index also significantly outperforming other UK main market indices.
While smaller companies have a tendency to underperform their larger peers in a struggling economy – and the UK economy certainly struggled in 2020 – a large number of AIM companies were beneficiaries of the pandemic and lockdown environment.