Faith, belief, prayer and hope are words the religious world shares with its secular, financial counterpart — particularly as brokers console their clients while the stock market continues to sink.
Right now investors want to have faith, to believe, to hope things will get better and maybe even pray they will.
In light of all that "religion talk," a new survey shows that a substantial number of Americans actually do feel some type of faith-based stewardship regarding their money and that if they don't necessarily make investment decisions based in part on their own moral beliefs, they at least think about doing so.
Figures released this week by Mennonite Mutual Aid show that "religion and ethical issues are cutting a much wider swath across investing than previously was understood," according to MMA Praxis President John Liechty. "If anything, the data suggest that this trend is gaining speed and will become even more pronounced in the future."
The survey of 1,141 U.S. investors shows 19 percent said they "always or usually" use moral convictions in making their investment choices, while 17 percent said they "sometimes" do so and 20 percent said they would like to.
The sentiment may be part of the reason the number of mutual funds that focus on screening out companies affiliated with alcohol, tobacco, gambling or pornography — traditionally known as the "sin stocks" — has grown from just six in 1993 to about 40, with the pool of choices continuing to expand.
Women's interest in what has been termed "faith-based investing" is more marked than that of their male counterparts, with 63 percent of women surveyed saying they are interested in incorporating their beliefs into financial decision-making. Just under half of men expressed that interest.
Liechty said the results show there is "enormous potential for growth of investing that takes into account the religious values of tens of millions of Americans." Yet the potential, at least locally, may be going mostly untapped." He said despite the popular notion that returns will suffer when you eliminate investment in a lucrative company, numerous academic studies have shown that such "screening" does not hamper the funds' performance — but it doesn't improve it, either.
Allyn Critchley, assistant manager of Piper Jaffray's Salt Lake office, said if there is a growing interest in such "faith-based investing," she hasn't seen much of it. "There are social issues that have been more at the forefront, like the avoidance of tobacco and environmental things, and of course, alcohol. I've not personally had anyone inquiring about religious values or heard anyone discussing it."
Companies that produce or distribute pornography or have ties to gambling or abortion are screened out by a small but steadily growing number of mutual funds. Even so, "I don't think I've ever had pornography mentioned" by a client or by colleagues, she said. As for faith-based investing overall, "I've been in the business for about 23 years, and I haven't had that many inquire about it."
The brokerage, she said, offers about sixty different mutual fund families, and "to be honest, I haven't had enough people inquire about it so it's not something I would normally call to their attention. We can name the mutual fund families that do have those convictions."
The largest and oldest fund families that offer values-based investing are often sponsored by churches, Liechty said — his being one of them. MMA Praxis Mutual Funds is the only fund company in the nation that "reflects Anabaptist Christian beliefs and values."
The oldest such organization is the Lutheran Brotherhood Funds. Others include the Noah Investment Group, Catholic Values Investment Trust, Domini Social Investments, Acquinas Funds, The Timothy Plan and Ave Maria Catholic Values Fund.
While Critchley hasn't seen much interest, it's possible that some Utah investors are simply doing the "background work" themselves, particularly with the tools now available to research mutual funds and stocks on the Internet.
One particularly useful tool for investors trying to determine what a mutual fund contains is found at www.crosswalk.com/investigator. Using the ticker symbol for the mutual fund, the computerized search engine shows users which of the fund's companies support several objectionable activities, and what percentage of the portfolio each of those stocks comprise. The conservative Christian Web site also offers individual company profiles focused specifically on any corporate activity it considers morally abhorrent.
In addition to the traditional "sin stocks," the investment screen includes information on companies that deal in or contribute to abortion-related products or services, military hardware and those that espouse or promote non-traditional family lifestyles. Faith-based investing seeks, in part, to effect the same kind of social change while providing investors a way to be "good stewards" of their money based on Christian principles.
"This is not a practice of religious zealots but a mainstream investing philosophy. That's why these funds exist, so that people can live from a religious standpoint for what their money is doing in the world."
E-mail: carrie@desnews.com