If your interest in values-aligned investing is tied to your religious faith, you’re not alone. In one form or another, faith-based investing has been around for centuries. Today’s faith-based investors often find that their goals overlap with those of ESG and impact investors. In fact, churches, synagogues, and even Buddhist monks are increasingly turning to ESG for their investments.
For individuals, the conversation is a little different. Your faith is personal. Just like with any socially conscious investing, identifying what matters to you — both financially and spiritually — is the most important part of your faith-based investing journey.
Below are a few starting points and resources for many of the most popular religions in the US:
Invest in a faith-based mutual fund or ETF. As of January 2022, there are 18 religiously responsible ETFs in the US, according to Bloomberg. There are also mutual funds and indexes tied to different religions; most of them screen out companies that are in conflict with religious teachings — adult entertainment, alcohol, and weapons are commonly excluded businesses. Keep in mind that diversification is sometimes harder with certain industries excluded, and such funds often come with a higher fee. Performance data can show whether they line up with your investment goals and risk tolerance.
Apply existing principles to your portfolio. Many faiths have investment guidelines for their followers to consider. The US Conference of Catholic Bishops has six principles for socially responsible investment, while the Accounting and Auditing Organization for Islamic Financial Institutions outlines Islamic-compliant investing. Need a hand? From Saturna Capital (Islam) to Thrivent (Lutheran), many registered investment advisors (RIAs) specialize in faith-based investing. This is an option worth exploring if you’ve got a lot of assets, especially more complicated ones.
Connect with your community. As faith-based investments continue to grow, so do opportunities to learn from other investors. Networks can offer resources and guidance on screening current portfolios and identifying new opportunities.
Some Faith-based Investing Resources
- Popular screens: Pornography, gambling, abortion, stem cells, weapons
- ETF and mutual funds: Global X, Guidestone Funds, Inspire Investing, Timothy Plan, LKCM Aquinas, Ave Maria
- Indexes: S&P Catholic Values, MSCI USA Catholic Values
- Advisories and guidelines: US Conference of Catholic Bishops, ZUG Guidelines
- Communities: Catholic Impact Investing Collaborative
- And for any Episcopal entity, the Episcopal Church offers access to a specific investment portfolio.
- Popular screens: Debt, pork products, pornography, alcohol, tobacco
- ETFs and Mutual Funds: SP Funds, Wahed, Saturna Capital
- Indexes: S&P 500 Shariah, Dow Jones Islamic Market U.S. Index, MSCI USA Islamic Index
- Advisories and Guidelines: Accounting and Auditing Organization for Islamic Financial Institutions, ZUG Guidelines
- Popular screens: climate change, anti-semitism, human rights, support for Israel
- Mutual Funds and ETFs: JLens Jewish Advocacy Strategy, VanEck
- Advisories and Guidelines: RPB Jewish Values Investing, JCF Guide to Jewish Impact Investing, ZUG Guidelines
- Communities: Jewish Women INVEST, Jewish Community Foundation of San Diego
Buddhism and Hinduism
- Popular screens: Weapons, animal products, climate change
- Advisories and Guidelines: ZUG Guidelines
We will continue to update and expand these resources. If there is one you like and think we should consider adding, please let us know.