Investors are constantly told to hold their emotions in check and put their preferences in their pocket. Only the ticker tape tells the truth of the tale.

Yet, some investment strategies do offer preferences up on a plate. For example, The Miller-Modigliani theorem, which won its authors a Noble prize, says that investors should be indifferent as to whether they receive a return on equity through capital gains, dividends or share buybacks. Yet, Jeremy Siegel, author of Stocks for the Long Run, has advised WisdomTree on ETFs that are founded on dividends, among other things.

But people have other preferences. Some think naughty stocks offer the best prospects of growth – tobacco, booze, gaming, weapons – hence the Vice Fund. That’s a preference – or a belief that sins pay dividends.

On the other side is socially responsible investing, now commonly known as ESG – for Environmental, Social and Governance. There are pension plans jointly sponsored by unions and governments that seek to manifest in their investments a commitment to social justice. There are other investors, generally pension managers and large mutual fund complexes, that have an interest in good corporate governance, lest the company managers raid the treasury for excessive compensation and share buybacks misdirected to pay for options grants.

Mostly, ESG has been demonstrated in the clean technology, alternative energy and sustainable water sectors, according to Deutsche Bank. But the ESG universe is expanding. Gender equity has been added to the ESG lineup.

Now, reports, there are at least two women-focused index funds/ETFs. quotes ETF guru Deborah Fuhr to explain the investment rationale: “There’s empirical evidence, and many studies that show that companies that promote gender and sex equality and diversity perform better than companies that do not,” Fuhr told “If the studies are correct, there’s a good business case for these strategies.”

Whether virtue is its own reward, or also reaps investment bonuses, only time will tell.

Scot Blythe is a Toronto-based financial writer.
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