'Antiterror' Fund Carries a Small Stick

In the years after Pearl Harbor, patriotic Americans lined up to invest billions of their hard-earned savings in government "war bonds" to help pay for the war against Germany and Japan.

In the years since 9/11? Not so much. In fact, if you wanted to invest your savings in a way that supported the war against al Qaeda, you'd be hard pressed to know where to go or what to do.

Enter Adam Sheer, at New York-based Roosevelt Investment Management. Last week his small firm, which has $1.1 billion under management and family ties to President Theodore Roosevelt's heirs, relaunched its tiny $14 million (BULLX Quote)Bull Moose mutual fund as the "Roosevelt Anti-Terror Multi-Cap Fund."

The new name highlights a strategy the fund has been pursuing since April 2005. The impetus came from an investor. "About two years ago," Sheer explains, "one of our shareholders came and said they were upset that people really didn't care if they invested in public companies that did business with countries that sponsor terrorism."

He's hoping his renamed fund will capture the attention of like-minded investors. A number of big 401(k) plan managers, including Nationwide Financial, have expressed interest in including his fund in their plans.

Roosevelt Investment isn't alone. Missouri State Treasurer Sarah Steelman has also been pushing an "antiterror investment" policy in the state's pension fund since coming to office in early 2005. Steelman has moved $26 million into an antiterror fund run by Boston's State Street Global Advisers. And Steelman is poised to include Sheer's fund in her state's 529 tax-sheltered educational savings plan.

But these are tiny steps, involving a few tens of millions of dollars. By contrast, the World War II war bonds raised what would be worth nearly $1.5 trillion today.

And in the case of both Missouri's pension money and the Roosevelt fund, the antiterror label is grander than the current scope. In reality, both merely boycott companies that have ongoing business relationships in any of the four nations listed by the U.S. State Department as sponsors of terrorism: North Korea, Sudan Syria and Iran.