Investors lose a major justification for holding tobacco stocks

London: It wasn’t so long ago that the stellar performance of tobacco stocks such as British American Tobacco Plc and Philip Morris International Inc was enough justification for asset managers to hold onto their investments, despite a broader push toward socially responsible investing.

But in recent years, a flurry of European pension funds and insurers have begun divesting their holdings, putting pressure on the share prices. BAT had its worst year on record last year, slumping 50%, as the US Food and Drug Administration toughened its stance toward the tobacco industry. Philip Morris slumped 37%.