The World’s First Vegan Fund Turns One. Are Vegan Stocks a Good Investment?
On September 10th, 2019, Beyond Investing launched the world's first vegan-centered Exchange Traded Fund (ETF) on the New York Stock Exchange, with the ticker VEGN. Comprised of stocks that are vegan-friendly, the fund is designed with the health and safety of people, animals, and the planet in mind. So the question is: Would it have been a good investment, and should investors consider it a "buy" one year later?
Run by a group of vegan investment professionals, the US Vegan Climate Index avoids companies involved in unethical practices. They don't include holdings that represent animal cruelty or environmental harm. Its unique screening process weeds out animal exploitation, child labor, high carbon-intensity production, the burning or extraction of fossil fuels, single-use plastics, and so much more. This strict standard sets the US Vegan Climate Index apart from other funds.
You Eat Vegan, But Should You Invest in a Vegan Fund?
The launch allowed vegans, animal advocates, and environmentalists to put their money where their mouth is. But along with shares of Beyond Meat, it also held some big names like technology giants Apple, Microsoft, Facebook, AT&T, and Intel, which together made up roughly 20% of the portfolio, according to CNBC. One year later, the Index has consistently outperformed the S&P 500. On its birthday earlier this month, VEGN had a 27.69 percent total return on market price. By comparison on the S&P from last August to this August went up 19.6 percent, and in another sector, Callon Petroleum Co.(CPE), widely considered one of the biggest names in oil and natural gas, fell -86.83 percent, and Tyson (TSN) the meat company is down -30.27 percent. (As of last Friday, September 18th, the final trading day before this story was published, after a soft week, the S&P 500 One Year Return was 13 percent while VEGN’s One Year Return was over 19 percent.) So now the question remains: Is VEGN still worth the buy? No one knows what's going to happen in the market but at the current trends in meatless products and planet-friendly consumerism, we bet yes.
In the past year, assets in VEGN have exceeded $25 million. Beyond Investing uses this influence and power to encourage companies to shape up for the betterment of the world. Currently, they are focusing on Apple, Verizon, Ford, GM, and Starbucks. Of these major institutions, Beyond Investing is asking to end the manufacture and sale of leather and to continue the transition to sustainable plant-based foods. Beyond Investing CEO Claire Smith, said, "As the world turns to ethics to save itself, investors should be looking at VEGN to be ahead of the curve."
Beyond Investing and the US Vegan Climate ETF, VEGN makes investing for animal lovers and vegans a simple process. Investors don't have to do the dirty work of researching individual company policies. "Our environmental clauses permit us to screen out the highest carbon emitters more broadly," Smith says. With a strict policy of excluding companies involved in animal testing and selling animal-based products, Beyond Investing offers a new option for investors hoping to back companies that share the same values they do.
What If You Had Invested in Beyond Meat at Its IPO?
As a comparison, according to CNBC back in February, before the pandemic drove sales of meatless meat even higher: "If you invested $1,000 in Beyond Meat at IPO, that investment would be worth nearly $4,500 as of Feb. 5, 2020, for a total return of around 345%, according to CNBC calculations. In the same time frame, by comparison, the S&P 500 earned a total return of around 14%. Beyond Meat has a current stock price of around $111." Since then the stock price has jumped to as high as 162 and closed recently at 155, so your total investment would be a nice windfall.
But as market news affects individual companies, each stock on its own is not an indicator of the sector the way an ETF is. One example: When a rumored deal between Impossible Foods and McDonald's fell apart in January, shares of Beyond jumped up 12 percent, as speculation increase that Beyond would announce a partnership with the chain. Since then the stock has been on a rollercoaster but ended up higher for the most recent quarter as more consumers are embracing meat alternatives.