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Death: a sure thing?
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May 28, 1997: 8:25 p.m. ET
Houston-based fund is first ever to tap into lucrative death-care market
From Correspondent John Defterios
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NEW YORK (CNNfn) - Death is showing signs of life on Wall Street.
With some $15 billion in annual revenues, the once overlooked death-care industry is attracting investors -- and has even inspired a new fund: Pauzé Tombstone Index Fund, which invests in publicly-owned funeral homes, casket makers and cemeteries.
Fund founder and President Philip Pauzé generated "back-performance" numbers to see how the new fund would have performed historically and says the results were very positive.
"We ran the index from January, 1986 through the 11 years from that point until 1997. The Tombstone index beat just about all of the indices, including the Dow, the S&P 500, the Russell 1000, 2000 and 3000," said Pauzé.
Besides the obvious -- everybody dies -- the death-care industry has a lot going for it. Wall Street research firm Dun & Bradstreet reports that funeral homes have one of the lowest failure rates of the industries it tracks.
Plus, the industry is ripe for mergers or takeovers, which could reduce operating costs and increase profits.
Mergers already have created some death-care giants, including industry leader Service Corporation International. The company has nearly 2,800 funeral homes, 324 cemeteries and 138 crematoriums.
A death-care fund might also be a hedge against the chance of a bear market.
"It's an industry that does not experience a change in demand whether the economy is expanding or contracting, or whether the market is rising or falling," said Standard & Poor's sector strategist Sam Stovall. "When you die, you die. The only difference could be the families of the one who passed away, if times are tough, could opt for a less expensive funeral."
The reality is that few people comparison shop when it comes to funerals. After all, who wants to appear cheap when it comes to burying a loved one. 
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