As markets and investors become ever more sophisticated, the range of investment vehicles available also gets bigger. Once upon a time, the height of investment sophistication was a punt on Singapore rubber futures. Today, investors can put their cash into anything from booze to sex to guns, even death. Experts are divided on what is behind the rise of investment vehicles such the Vice Funds or Death Futures. Some say it is the increase in disposal income among the population, others argue that investors are becoming more knowledgeable and therefore less risk averse. Some even say that in a crowded market only the quirky or bizarre will attract an investor's attention. However, rights and wrongs aside, investors are warned that by choosing gimmick over fundamentals they could end up with much less than what they bargained for. 'It's the result that should be exciting,' says Philippa Huckle of the Philippa Huckle Group, 'not the actual investment itself.' The question of bad taste came to the fore recently when it was revealed that the Pentagon had plans to launch an online futures trading market which would allow punters to bet on the likely timing and location of the next terrorist attack, assassination, or political upheaval in the Middle East. The so-called Policy Analysis Market (PAM) chose as an example a derivative contract based on the likelihood of the overthrow of the Jordanian monarchy. The Pentagon argued that it was a useful terrorism management tool but Congress cried foul, and the scheme was quickly dropped. PAM may have been one of the more bizarre ideas, but there are still many other questionable investment tools and what is more, they are making money. Launched in the United States on August 30, 2002, the Vice Fund has grown 9.32 per cent since its inception. The Fund goes some way to proving that sex, drugs, rock and roll do sell, with its assets distributed almost evenly between gaming, alcohol, defence and tobacco. Sex was selling like hot cakes in Australia earlier this year when The Daily Planet, a Melbourne-based bordello, was launched on the country's stock exchange. The company's share price more than doubled from an opening of 50 cents to a close of A$1.09 (HK$5.77). Today the stock is still trading at the A$1 mark. And Death Futures, gambling on when a sick person will die, is a billion dollar industry in the US. Sally Wong, Senior Executive Director, Hong Kong Investment Funds Association, says that just because an investment has questionable morals, it doesn't mean it is more sinister. She does suggest investors spend more time researching investments of a slightly offbeat nature but more importantly, they should be sure it fits into their current portfolio. 'Instead of chasing a particular theme, focus on your need and what you can afford. That is more important,' she said. An expensive piece of art might look good on the wall and its capital value may increase, but that is no good if you are looking for the regular income. In fact, the Mei/Moses index, calculated by two economists from New York University, shows a long-term annual return of only 8.2 per cent from fine art, compared with 8.9 per cent for the Dow Jones index. The same goes for fine wine, antiques and precious metals. According to Ms Huckle, a portfolio should resemble a pyramid with speculative investments coming at the very top. 'On a smaller portfolio I would say, 'what is your strategy?' and first of all I would build the foundations, layering up on top of that,' she said. 'Get your first HK$5 million and then you can have your art collection, your wine, because they are an unreliable asset.'Just because a fund is new and untested, it doesn't mean its constituents are as well. An Asia-based 'Vice Fund' could include some of the region's best-known companies. China's Tsing Tao is the country's largest brewer and owner of one of the world's biggest selling beer brands, as is the Philippines' San Miguel. Indonesia's Gudang Garam and Japan Tobacco are respectively their country's largest cigarette manufacturer. And with 320 million smokers in China alone, there is certainly a healthy market for their products. Viola Tam, Director, Mutual Fund Sales, Principal Global Investors (Asia) Limited, says local investors like what they know and if there are good returns to be had from a tobacco distributor or beverage manufacturer then so be it.