Feb 8, 2020
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How a Vegan Ends Up With Leather in Her Portfolio

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Scour her holdings and you’ll probably find something that is personally objectionable. I wouldn’t want to own Intuit, given all of the reporting from Pro Publica about how it tried to keep people from filing their income tax returns for free. Equifax also makes an appearance, which hurt my heart. We people are animals, too, after all, and Equifax treated us shabbily in the wake of its horror show of a security breach.

And what price perfection, or only modest imperfection, in pursuit of a portfolio that is as close to morally pristine as can be? New funds tend to be costly, and these two are no exception.

The Vegan ETF features a fee of 0.60 percent, which is a lot for an index fund. Let’s say you put $2,500 into an everyday index fund that requires only a 0.10 fee. And let’s also say you do that every year for 45 years and earn a 6 percent annual return. The fund with a 0.60 fee ends up with $471,456, while that lower-fee fund ends up with $547,100. That $75,644 difference is real money, and it could go a long way toward advancing any of your chosen causes.

Ms. Smith said the company had every intention of starting to reduce fees once it passed $50 million or so in assets. Right now, she said, there was about $15 million in the ETF.

Karner Blue funds can cost even more, though the exact amount depends on how much you invest and whether you’re using a financial adviser. Ms. Benjamin said investors knew what they were signing up for, including the fact that the fund’s overarching organization also features an animal welfare advocacy and research organization, a political action committee and a foundation. And, she said, the fund managers are constantly pressing company executives for changes in their animal impact policies.

As with any socially conscious investment, questions about performance always linger somewhere in the background, even though research has shown that this sort of investing need not mean sacrificing returns that match the overall stock market.

Still, the focus on animal welfare is narrow enough that it could skew the holdings in a direction that is not ideal if you care about having an allocation of financial assets that matches a prominent, diverse stock index. This is particularly true with the Vegan ETF, where you sit out whole swaths of the economy.

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