An Odd Investment...

I wouldn't do it, but it shows what some people will think of:

MORE than 150 mutual funds call themselves socially responsible, investing only in companies that meet a series of ethical standards set by their fund managers. Then there's the Vice Fund.

Its prospectus says it favors "products or services often considered socially irresponsible." The fund has fulfilled that promise under several different fund managers, investing mainly in companies involved with alcohol, tobacco, gambling and military contracting. This politically incorrect approach has helped the Vice Fund outperform the Standard & Poor's 500-stock index from its inception in 2002. But the fund has had more than its share of management turmoil.
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Lately, the approach has again been paying off. Gambling and hotel casino stocks returned 25.3 percent this year through Thursday and 28.9 percent, annualized, in the last five years , according to Morningstar. The S.& P. 1500 Casino and Gaming Index, which tracks 10 stocks from the 1500 index, was up 10.1 percent through Thursday and 21.4 percent, annualized, over the last five years.

Tobacco stocks posted annualized five-year gains of 20 percent, while those for alcoholic beverages gained 12 percent a year and the aerospace and defense sector, including military contractors, climbed 11.8 percent, according to Morningstar.

The Vice Fund returned 9.2 percent this year through Thursday, compared with 3.1 percent for the S.& P. 500. Over the last three years, the fund's return has been 20.6 percent, annualized, outpacing the 10.9 percent of the S.& P. 500. The fund has no load, or sales charge, and has an expense ratio of 1.75 percent. Its allocations as of May 31 included roughly 27 percent to casinos, gambling and lotteries; 24 percent to aerospace and defense; 24 percent to alcohol; and 21 percent to tobacco.