Vice Fund Outperforming Market

Take a look at this chart; it shows the performance of the Vice Fund, which invests in companies that profit off human moral weaknesses. As you can see, it is out-performing the S&P Index pretty healthily.

But don't be so quick to think it's all about booze, tobacco and gambling. Only 61.26% is. There's 17.15% in "other" -- that's troubling -- but a big contributor to The Vice Fund's performance is the 21.59% share of its portfolio invested in defense stocks.

Defense as a vice? Here's how the fund justifies it:

The Case for Defense Stock Investing

Afghanistan, Iraq, North Korea. Those should be reason enough to believe in Defense Stocks. Homeland Security and anti-terrorism have become large, profitable industries. So called "Socially Responsible Investors" would claim that you shouldn't own stocks that have anything to do with defense or weapons. That means that all of the Aerospace and Defense Industries are to be avoided. Maybe in a perfect world these industries wouldn't need to exist, but until that perfect world does exist, we want to own these stocks.

Through good times and bad times, Aerospace and Defense firms employ millions of Americans and contribute billions of dollars to the U.S. economy. They provide technological innovations that are used in almost all of our daily lives. Why wouldn't we want to invest in these companies?

Are these good stocks to own? The new Bush budget calls for increased defense spending, and defense stocks have performed historically well following conflict. As an example, look at any public information on stocks like Lockheed Martin or General Dynamics since the 1970's. You'll see that they outperformed the S&P 500 Index by wide margins over the past 30+ years.

What high horse can someone who makes their living investing in alcoholism, lung cancer and the destruction of families through gambling be on that allows them to say that the defense of our country is a vice? How can you be "for our trooops" if you think it's a vice to provide them with the tools they need to survive and win?

And where are the pop music companies and MTV/Viacom in the portfolio? Those are among the biggest vice stocks going nowdays.