Managers bearish on tobacco industry despite improving returns

'Road bumps in the sector'

Fund managers remain nervous about the tobacco industry, which has been under regulatory, technological and social change over the past decade, despite a turnaround in performance over the past year.

As consumers became more health-conscious and aware of the risks associated with smoking and the tax on tobacco products climbed with almost every Budget in recent years, the industry began to see a fall in demand and an acceleration in volume decline. While this posed a threat to profitability, the popularity of e-cigarettes and heat-not-burn products signalled a positive transformation for both consumers and investors. Update: Robeco latest firm to exclude tobacco investments But this transformation proved to be slower than expected, leading some managers to begin reducing their ...