Professor Bainbridge...on law, politics, religion, culture & food

The Blue Fund

Jane Galt evaluates the Blue Fund, "which invests only in companies that give the majority of their political contributions to Democratic candidates and adhere to progressive values" (CNN). Politics aside, both basic economic theory and tons of empirical evidence tell us that broad-based, passively-managed index funds do better than actively-managed funds. An actively-managed fund run by adherents of the anti-business party that invests only in companies loyal to the anti-business party doesn't strike me as a particularly good long-term business model. (Of course, given the GOP's lousy track record on the economy in recent years, I wouldn't invest in a Red Fund either.)