COLORADO SPRINGS, Colo.—Religious groups, who have been demonstrating their power at the ballot box for years, are increasingly turning to faith-based investments.
In 1997, there were a handful of mutual funds that were faith based with assets of $500 million. this year there are at least 40 with $17.5 billion, the Gazette reported, quoting Morningstar Inc. The company monitors mutual funds.
Faith-based investing is also called morally responsible investing, and it is not confined to Christian groups. There are Islamic-based funds.
It is a concept that governments and advocacy groups have used for decades against pariah governments. This “socially responsible investing” accounts for $2.2 trillion.
Faith-based funds do not invest in companies engaged in activities contrary to their moral and religious beliefs, such as tobacco, gambling and pornography.
“Our investors like the fact that they can invest with us and know that their money won’t be invested in companies that violate their principles,” said Stephen Ally, vice president of the Timothy Plan, a Christian evangelical group that oversees eight successful funds.
There can be differences between social responsible and morally responsible groups in some cases. The former may rule out investments in companies they consider to be harming the environment, while faith-based groups focus on their religious beliefs.
Because of the additional screening, faith-based funds are slightly more expensive to invest in than secular funds, but many also have impressive returns.
The Islamic Amana Income Fund, with $436 million in assets, gained 25 percent over the past year, nearly triple that of the investment benchmark, the S&P 500. Over the past five years, the Catholic Ave Maria Mutual Funds have risen 8.7 percent, more than 1 percent above the benchmark during the same period.
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