When you write articles on behalf of a financial site that has a Christian theme to it, you are often queried about the subject of morally responsible, or socially responsible, mutual fund investing. According to the Social Investment Forum, the amount of money invested in socially responsible funds has gone from just over $10 billion in 1995 to just over $300 billion today, so there’s clearly been a growth in the interest of investing with a higher sense of purpose. Still…is doing so really a good idea for your individual portfolio?
Going further, one of the challenges for Christians is the matter of deciding if a socially/morally responsible fund’s philosophy truly meshes with their own ideas. A lot of socially responsible funds are comprised within philosophies that would be considered very liberal. “Socially responsible” and “morally responsible” are not always the same thing; if you define morally responsible in terms of an adherence to traditional morality, you may find a lot wrong with funds that believe that it’s morally responsible to avoid investment in companies that do not fully support so-called alternative lifestyles. Semantics can be a tricky thing. For Christians, a better term is “faith-based” investing. That gets to the heart of the matter a little better than these others, which leave a lot of room for interpretation. Among the best-known of the faith-based funds are the Ave Maria funds (www.avemariafunds.com), which is a mutual fund family predicated on Catholic values. There are many others, too, including the GuideStone Funds (www.guidestonefunds.org), a Protestant-based option that actually began as a retirement fund for the employees of the Southern Baptist Convention.
In the end, there is certainly nothing wrong with trying to do what you believe is the right thing, and if you believe that such an effort should have a home in your investment portfolio, so be it. In fact, kudos to you for accepting the chance of lower investment returns in exchange for such a commitment. Just be clear that as soon as you invest in any company at all, with all of the complexities associated with being a company, the intrinsic moral purity of that company becomes a much tougher thing to evaluate, and that morally-based investing becomes less a matter of absolutes, and more a matter of relativism.
James L. Paris and Robert G. Yetman, Jr.
Christian Financial Planner
None of the information contained in the above article is intended to be, nor should be construed as, a solicitation or recommendation to buy or sell any security, or engage in any financial transaction whatsoever. It should be noted that, at any given time, the author(s) may or may not own any of the securities or other financial products mentioned in this column. Furthermore, it is strongly suggested that you seek the advice of an appropriate financial professional before making any changes or implementing any decisions with regard to your personal financial profile.