Young investors OK with ASX shares peddling gambling, tobacco, porn

But most are united against shares contributing to war and climate change. Check out your own moral compass with the online ethics calculator.

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A new ‘ethics calculator’ has found younger investors don’t find gambling, tobacco, pornography or alcohol a major problem when it comes to selecting stocks. 

Melbourne investment firm Nucleus Wealth surveyed 1,450 actual and potential investors on their morals during stock selection.

One question was whether the person would put money into a company that made money from a “vice” — named as gambling, tobacco, pornography, alcohol or cannabis.

“Only a third (31%) of Gen Ys chose to exclude at least one vice,” said Nucleus chief executive Damien Klassen.

“The majority of Baby Boomers (51%) chose to exclude at least one vice.”

The result reflects the more tolerant attitude towards the vices in recent years in general society. For example, betting companies such as Pointsbet Holdings Ltd (ASX: PBH) and Betmakers Technology Group Ltd (ASX: BET) are doing well, with many US states now legalising wagering on sport.

Another example is the proliferation of cannabis companies, with decriminalisation occurring in many US states and potential liberalisation in Australia.

The study also found women were 70% more likely to be put off by companies dealing in vice.

Anyone can now take the survey yourself, as Nucleus has posted the ethics calculator online. Your answers can be instantly compared to the attitudes of other investors in the different generations.

Everyone’s united on climate change though

The different generations all came together when it came to companies that are dubious on climate change action.

Millennials (53%) and Baby Boomers (49%) led the way on how likely they were to avoid investing in such stocks.

“I think you could extrapolate a message to politicians that climate change is so important that around half of investors will not invest in companies contributing to climate change,” said Klassen.

Human rights were also a unifying force, except for what the survey called the Silent Generation, which were people born before 1946.

“More than 50% of two groups made an exclusion because of human rights concerns. Human rights issues include the lack of women on boards and in senior management positions,” Klassen said.

“The one anomaly was the silent generation’s views, of whom only 26% said they wished to avoid investing in those companies linked to poor human rights practices.”

Investors are anti-war but don’t care about religion

All generations reacted strongly to businesses that contribute to war, according to Klassen.

“Boycotting investing in companies directly associated with war — such as munitions and armaments producers — was another prominent finding,” he said.

“The strongest feeling was amongst Baby Boomers, with 53% indicating they would not invest in war-related industries.”

Women were far more likely to exclude a stock for war than men, the study found.

Animal welfare was another issue where all generations showed empathy, except for the Silent Generation, with only 21% of that group concerned.

The survey also asked investors if they cared if they would avoid putting money into a business because of their religious leanings. 

Most respondents didn’t care.

“This category includes companies typically excluded by investors with Islamic or Catholic values. All generation groups registered only low single digits, and the average across the whole sample is just 2%,” the study stated.

Klassen said that Nucleus allowed its clients to exclude certain companies based on their moral convictions.

“In our experience, there is clearly interest among investors in enacting their moral outlook through the investment process,” he said.

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Tony Yoo has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of and recommends Pointsbet Holdings Ltd. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of Betmakers Technology Group Ltd. The Motley Fool Australia has recommended Betmakers Technology Group Ltd and Pointsbet Holdings Ltd. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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