California State Teacher’s Retirement System is turning around a long standing ruling that prohibited them from investing in those sinfully smoky tobacco stocks. In theory, the eight year old ban was put on because of the worries about the pending lawsuits and the downside risk. But I just have to wonder if that was not really a smokescreen for the underlying desire to stay “socially-responsible.”
The board of the California State Teachers’ Retirement System began deliberating on Wednesday about adding tobacco stocks to its portfolio of more than $160 billion, reuters said.
Calstrs divested itself of these stocks in 2000 because of various lawsuits against the industry and looming government regulation, but said missing out on a “market weighting” in tobacco stocks cost it $1 billion in returns in the past several years, the paper said.
It was not clear how much money Calstrs planned to invest in tobacco companies, the newspaper said.
This move could be beneficial for US tobacco companies, as investment funds like CALSTRS pack quite a punch with their capital.
