Some might liken the term “faith-based investing” to active management (tee hee!), but I’m actually referring to something else. When I say faith-based investing, I’m referring a specific type of SRI (Socially Responsible Investing) in which a portfolio invests within the parameters of a religion’s belief set.
Sharia Compliant Funds
One example are investment funds which are Sharia compliant. Sharia is the religious body of law of Islam, and some notable rules state that you cannot sell something you do not own which means you can’t short a stock. Also, fixed income instruments that pay interest are not allowed by Islam. However, there are Sharia compliant funds that manage to achieve substantially the same results of these types of investments through some extra layers of transactions. Sharia compliant investment funds are one of the fasted growing class of investments in the world.
FaithShares ETFs
FaithShares Advisors in Oklahoma have filed to launch five index ETFs which essentially screen large cap stocks based on certain religious values:
- FaithShares Baptist Values Fund
- FaithShares Catholic Values Fund
- FaithShares Christian Values Fund
- FaithShares Lutheran Values Fund
- FaithShares Methodist Values Fund
Each will hold the top 100 stocks based on the screens, and will then hold the positions on an equal weighted basis.
Do any readers screen their investments based on social screenings?
I have been involved in the faith-based investment movement for the last 5 years. Many think you have to either choose principles or profits. I am here to say that after 2 years of research and writing 2 books on faith-based investing, this is not the case. You can generate competitive profits while keeping your faith central. This does involve a little effort on your part to search a little harder for investments in line with your faith. For those seeking to incorporate the Christian faith, I have created two sites to make it easier: http://www.jayperoni.com and http://www.faithbasedinvestor.com
Many Blessings,
Jay Peroni, CFP
Author of The Faith-Based Millionaire
http://Www.jayperoni.com
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Jantzi Social Index is nearly identical to TSX 60. The main differences that I observed are Jantzi Social Index exclude Manulife, Goldcorp, Barrick Gold, and Imperial Oil. Later three resource companies are not very environmentally friendly by definition. Guess what? Jantzi Social Index includes Kinross, Yamana, and Suncor. I would assume that Kinross, Yamana, and Suncor are not very environmentally either. I just want to point out these value based screening may not work well.