Posted on 03/23/2005 6:53:20 PM PST by SmithL
SEATTLE - A mutual fund company that invests only in businesses it deems socially responsible has dropped Starbucks Corp., citing the coffee giant's launch of a java liqueur with whiskey maker Jim Beam.
Pax World Funds, a Portsmouth, N.H.-based fund family, steers clear of companies involved in defense or weapons, tobacco, liquor or gambling. It sold 375,000 shares of Starbucks worth an estimated $23.4 million, about 1.6 percent of its Pax World Balanced Fund portfolio, the fund said in a statement released Wednesday.
"While we continue to admire and respect many aspects of Starbucks' business and corporate citizenship activities, the company essentially forced our hand in this matter," said Anita Green, Pax World Funds' vice president of social research.
In a written response to the Pax World announcement, Starbucks said it was disappointed but understood Pax World Funds' strict policy on not investing in companies that make money from the manufacture of liquor.
"Starbucks is committed to responsible marketing, and proud of our history of corporate responsibility," the statement said. "Prior to the introduction of this product, Starbucks worked diligently to research and understand its potential impact."
Pax World Funds said it sent Starbucks CEO Orin Smith a letter in mid-February urging the company to end its deal with Jim Beam, which was announced last year.
"We have divested ourselves of these shares reluctantly and only after trying to get the company to reconsider its course of action," Green said. "Investors in Pax World Funds expect us to do what we say we will do about avoiding companies that produce liquor."
Starbucks Coffee Liqueur is sold in restaurants, bars and stores licensed to sell liquor. It is not sold in any of the coffee chain's 9,000 stores.
In the statement it released Wednesday, Starbucks noted it is sponsoring a national program aimed at educating parents and children about the dangers of underage drinking.
Message left with Jim Beam Brands Co. and the Distilled Spirits Council of the United States were not immediately returned Wednesday.
Shares of Starbucks fell 22 cents, or 0.4 percent, Wednesday, to close at $51.44 on the Nasdaq Stock Market.
Founded in 1971, the Pax World Funds family includes holdings in companies that sell goods and services which fund managers feel improve the quality of health care, technology, housing, food, education, pollution control, utilities and leisure activities.
The funds family, including Pax World Balance Fund, the Pax World Growth Fund and Pax World High Yield Fund, has about $1.6 billion in assets under management.
Yeah, now that PAX dropped that deadweight from the portfolio, they're sure to improve on the -23% 5 year average. The five year increase in value of Starbucks stock is ONLY 257%. Imagine how much money the fund can loose in a socially responsible manner now that they don't have Starbucks to earn money for them!!!
I wonder if I can short PAX?
Pax isn't the only fund of that nature. There's always Domini.
There are a lot of Foundations, Hospitals, Endowments and Church pension funds that have restrictions about how their money is invested. Some of those restrictions aren't far off from Pax's.
Yikes - thanks for the financial advice!
But if a company comes along that is involved in "medicinal" marijuana, they'll plow everything they got into it.
Why are you railing at an investment company choosing its stocks however it jolly well pleases?
How many people have been kneecapped by E. F. Hutton?
I was referring to legalized gambling. No one at PAX is going to do any kneecapping. After all, they are the ANTI-GUN socially responsible investment choice! It's all a matter of how one likes to take their sin. I'll take mine with a little Starbucks coffee liquor on top.
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