Christians And Mutual Funds: Ethical Investment Considerations

Christians are instructed to be wise stewards of their physical possessions without letting them become idols. However, many Christians have a strained relationship with money due to certain parables. This has led to a general wariness about investing in companies that go against their values. Christian mutual funds are types of mutual funds that invest in companies that align with Christian values. They are a type of values-based investing, where investors put their money into stocks that they hope will have a good return and also align with their values and principles. This could be based on a company's environmental, social, political, or ethical standing. For example, most Christian investment firms avoid investing in companies involved with tobacco, adult entertainment, and gambling.

'Sin stocks': alcohol, tobacco, gambling, and weapons

Sin stocks are publicly traded companies involved in activities that are considered unethical or immoral. They are perceived as exploiting human weaknesses and frailties for profit. The sectors most commonly associated with sin stocks include alcohol, tobacco, gambling, sex-related industries, and weapons manufacturing.

The demand for the products and services of sin stocks remains consistent, even during recessions. This is because hard times do not stop gamblers from betting, partygoers from drinking, or smokers from smoking. This makes sin stocks a safe bet during economic downturns.

However, sin stocks face greater political risk than most other stocks. They are at a higher risk of being outlawed or heavily taxed due to their association with activities deemed immoral or harmful to society.

From a Christian perspective, the question of investing in sin stocks is a complex one. Some Christians may object to investing in sin stocks on moral grounds, as it could be seen as supporting companies that promote activities contrary to Christian values. For example, a Christian investment company will typically avoid investing in companies involved with tobacco, adult entertainment, and gambling.

On the other hand, some Christians may argue that investing in a company's stock is not the same as directly supporting that company, especially if the stock is purchased second-hand. Additionally, it can be challenging to avoid all sin stocks, as many mutual funds include at least a few sin stocks among their holdings.

Ultimately, the decision of whether or not to invest in sin stocks is a personal one and depends on an individual's interpretation of Christian values and principles.

Abortion and pornography

Christian investors are often encouraged to be vigilant about where their money is going, as many companies that offer their stock to the public fund abortion businesses and invest in pornography. Some companies also receive considerable profit from processing credit card transactions for pornography businesses.

There are a variety of Christian investment firms that offer mutual funds that are screened according to biblical principles. These include:

• Timothy Plan – a pro-life, pro-family fund that has been going for over thirty years.
• GuideStone Funds – a fund that provides investments that are socially screened and based on Christian values.
• New Covenant Funds – a fund that makes investments consistent with social-witness principles adopted by the General Assembly of the Presbyterian Church (USA).
• Inspire – a firm that offers a free screening tool for biblically responsible stocks.
• Sovereign’s Capital – a company that goes beyond negative screening by investing in companies with exceptional cultures that enable employees to flourish.
• Eventide Asset Management – a Boston-based investment adviser pursuing “investing that makes the world rejoice”.
• Crossmark Global Investments – an innovative investment management firm that provides a full suite of investment management solutions.
• OneAscent Investments – a registered investment advisor that manages a variety of Values-Based investment strategies.

However, some Christian financial advisors argue that it is not always possible to be certain about where your money is going, and that it is not always harmful to invest in a company that might be involved in sinful practices. Dave Ramsey, for example, has said:

> "I'm not concerned about it because when you buy stock in a mutual fund company that has holdings in a company like Anheuser Busch, you are not giving a penny to Anheuser Busch. You're actually not harming or supporting any of these companies if you happen to have a mutual fund that invests in their stock."

But this view is not universally accepted among Christian financial advisors. Dwight Short, for example, has said:

> "Investing biblically is your responsibility. As an investor/owner of publicly traded companies, it's up to you to know whether the company in which you are a shareholder measures up to God's standards."

It is important to note that investing in Christian mutual funds does not guarantee returns, and it is subject to the same economic risks as any other type of investment.

Environmental, social, and ethical standing

From an environmental perspective, Christian investors may seek to support companies that demonstrate a commitment to environmental responsibility and sustainability. This could include investing in companies that prioritise eco-friendly practices, reduce their carbon footprint, or promote green technologies.

Social considerations are also important for Christian investors. They may favour companies that promote human rights, fair employment practices, and ethical business operations. This includes avoiding companies that engage in discriminatory practices, violate human rights, or have questionable labour standards.

Ethical standing is a crucial aspect of Christian investing. Christians often avoid investing in companies associated with "sin stocks", such as those involved in the alcohol, tobacco, gambling, weapons, or adult entertainment industries. Additionally, Christian investors may exclude companies that support abortion, contraceptives, embryonic stem cell research, or the production of weapons of mass destruction.

By considering these environmental, social, and ethical factors, Christian investors can ensure that their investments align with their values and contribute to a positive impact on the world.

It is worth noting that there are varying interpretations and denominations within Christianity, and not all Christians may agree on the specific companies or industries to include or exclude. However, the underlying principle of aligning one's investments with one's values remains a consistent theme in Christian investing.

Biblically Responsible Investing

Christians who want to invest in line with their faith can consider Biblically Responsible Investing (BRI). BRI is a type of values-based investing, where investors choose investments that align with their principles and beliefs.

BRI is also known as faith-based investing or values-based investing. It involves investing in companies that uphold Christian values and avoiding those that go against them. For example, most BRI funds avoid investing in companies involved with tobacco, adult entertainment, gambling, abortion, pornography, weaponry, alcohol, and drugs.

BRI is not just about excluding immoral companies, it is also about investing in companies that promote positive, redemptive practices. This is sometimes called Kingdom Impact Investing, where the focus is on the positive impact of investments, rather than simply avoiding negative influences.

BRI is not without its challenges. Some critics argue that it is impractical, and that it is impossible to avoid all companies with questionable practices. There is also a lack of standardization, with different funds and investors interpreting Biblical values in various ways. Additionally, BRI funds often have higher expense ratios, which can lead to lower returns compared to basic index funds.

Despite these challenges, BRI can be a rewarding investment strategy for Christians, allowing them to align their financial goals with their religious values.

Stewardship

In the context of investing, Christian stewardship involves making investment decisions that reflect biblical principles and values. This is often referred to as faith-based investing or values-based investing. Christian investors seek to generate returns by choosing investments that align with their religious beliefs and values. This usually means avoiding investments in companies or industries that are deemed immoral or unethical from a biblical perspective. For example, many Christian investors exclude companies involved in abortion, pornography, alcohol, tobacco, weaponry, gambling, and adult entertainment from their investment portfolios.

Christian mutual funds have emerged as a response to the desire of many Christian investors to align their investments with their faith. These funds invest in companies that uphold Christian values and avoid those that contradict them. By investing in Christian mutual funds, believers can ensure their investments are consistent with their faith and promote their values. Additionally, some Christian mutual funds focus on investing in companies that have a positive impact on the world, such as those with strong environmental, social, and governance (ESG) practices.

However, Christian investors should be cautious when choosing mutual funds, as not all funds marketed as "Christian" or "faith-based" may align with their specific values. It is important to conduct thorough research and due diligence to ensure the fund's investment strategy aligns with one's personal beliefs. Christian investors may also consider working with a financial advisor or investment professional who specialises in faith-based investing to help navigate this complex landscape.

Ultimately, Christian stewardship in investing involves seeking God's wisdom and guidance in managing one's finances and making investment decisions that honour Him and reflect biblical values. It is about recognising that God is the true owner of all resources and that believers are called to be faithful stewards of what He has entrusted to them.

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