There are ETFs out there that track everything from women in leadership to environmental responsibility. And if you don't like social responsibility, there's always VICEX.

I reckon people invest in them to support ethical (or, in the case of VICEX, "evil") companies. But how do they fare compared to the rest of the market? Would one be making sub-optimal financial choices by buoying up feel-good stocks?


As far as I'm concerned, factor number one in evaluating an ETF (or any other fund, really) is the expense ratio and other related fees. If I think there's a market sector, or commodity, or whatever that will out perform, but I don't want to get directly in to options contracts, I'll seek out an ETF. First I filter by fees, then I filter by prospectus; you want to make sure the fund is actually investing in the thing it claims to track.

Whether or not that will beat the broad market is, in my opinion, irrelevant. If you wanted to be in the broad market, you'd be in a low cost market index fund. You're looking for a risk category more specific than the broad market and will experience risk/returns in line with that category.

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