Is Ryanair a biblically responsible company?
Stocktake: sky gambling is a ‘blessing’, gains ahead, September boredom and Apple profit
Despite Ryanair’s history of in-flight scratch cards, alcohol and calendars featuring scantily clad female staff, Inspire – which invests in “companies that are blessings” – approves of the airline. Photograph: Nick Bradshaw
Ryanair’s reputation has taken a battering lately. The UK’s Civil Aviation Authority accuses it of “persistently misleading passengers” regarding recent flight cancellations, while disgruntled staff are highlighting questionable working practices. It might come as a surprise, then, that the controversial company is deemed sufficiently “inspiring” to be a holding in a “biblically responsible” exchange-traded fund (ETF). In March, Stocktake reported on the launch of the Inspire Global Hope ETF. The US fund tracks 400 of the world’s “most inspiring, biblically aligned large companies”, and condemns companies “engaged in activities that are not consistent with biblical truth”. There’s no place for companies supporting “LGBT activism”, “anti-family entertainment”, pornography, alcohol or gambling, to name but a few areas of contention. Ryanair might not seem especially biblical, what with its history of hawking in-flight scratch cards, alcohol and calendars featuring scantily clad female staff. Inspire, which invests in “companies that are blessings to their communities, customers, workforce and the world”, appears to think otherwise.
Quarterly gains on the cards for stocks
Furthermore, the S&P 500 has risen in every month from May through September; since 1928, those instances have been followed by fourth-quarter gains every time. Fat Pitch blogger Urban Carmel notes a sentiment survey showing marked bearishness among investment managers. This has happened 16 times since the survey began in 2006, notes Carmel, with stocks gaining over the following six weeks on every single occasion. Carmel notes economic data is strengthening, a point also made by the Leuthold Group’s Doug Ramsey. The market is “in gear”, with strength in cyclical sectors evidence of healthy risk appetites and an improving economy. In short, the bulls remain in control. Fourth-quarter gains look increasingly probable.
The most boring September in history
A comeback for active funds?
A minority outperformed in Europe, although there was a sharp increase in outperformers. The UK numbers were especially impressive – eight out of 10 funds outperformed, prompting Money Observer to say active funds had “proven their worth since last June”. That’s a gross exaggeration. Luck and randomness mean the figures vary wildly from year to year – a whopping 87 per cent of UK funds underperformed in 2016 – but the key point remains that few funds do the business over the long term. In the UK, 70 per cent underperformed over the last decade.
The figures are even worse for other regions, with 85 per cent of global funds underperforming over the last 15 years. Consequently, talk of a fund manager comeback remains premature, to say the least.