Christian Investors Put Their Beliefs into Practice

Socially responsible investing began in the 1960s. Today, increasing numbers of Americans are investing in issue-based mutual funds, including funds with Christian investing principals.

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This concept won't surprise anybody who puts money in an environmentally friendly mutual fund. People have tried socially responsible investing for decades, and now more investors are turning to churches to help guide their decisions.

NPR's Monica Villavicencio examines Christian mutual funds.

MONICA VILLAVICENCIO: At a midday Catholic mass at the National Shrine in Washington, D.C., a priest addresses a church full of worshippers.

Unidentified Man: What do I do with my time? With my money? What do I do with my friendships? All of that, even our very ordinary humdrum activities and duties, become not only important, they become the means to our salvation.

VILLAVICENCIO: American Christians are taking that message to heart and passing it on to their financial advisers. They don't want their money invested in things they don't agree with. And it shows. Assets in faith-based funds swelled from 2.4 billion in 2000 to 15.9 billion at the end of August.

Arthur Ally is the founder and president of the 15-year-old Timothy Plan. It's a biblically based family of mutual funds.

Mr. ARTHUR ALLY (Founder and President, Timothy Plan): We're concerned with the issues like abortion and pornography, a nontraditional married lifestyle, the homosexual agenda. We are not homophobes, but we will not own shares of companies that are promoting the agenda.

VILLAVICENCIO: That means that many entertainment companies are screened out. Pharmaceutical companies that manufacture products that these investors feel are linked to abortion are also off limits.

But many other Christian investors disagree with Ally over what values stand at the heart of their investments. Take 29-year-old Andrea Martin(ph) of Washington, D.C.

Ms. ANDREA MARTIN (Financial Investor): You show your faith by being socially responsible, by caring about others, by living nonviolently. Living with less so that others can have more.

VILLAVICENCIO: Martin grew up in Nairobi, Kenya, where her parents were teachers at a Mennonite mission school. After college, she wanted to start saving for retirement. Mennonites are pacifists and do not support companies that produce weapons, pollute or operate sweatshops. And so she chose the antiwar, pro-environment MMA Praxis Funds.

Ms. MARTIN: I really liked knowing that it was socially responsible. That whatever profits I would be gaining I knew were not at the expense of anyone else.

VILLAVICENCIO: But just how profitable are these funds? And how much do the returns really matter to investors?

George Tobin(ph) is a financial investor who invests in the Timothy Plan. Returns range from about 2 to 12 percent over the past five years. That compares with the S&P 500 five-year average of about 7 percent. So not all Timothy Plan funds are winners. That's why Tobin also invests in companies that would not pass the fund's Christian filters.

Mr. GEORGE TOBIN (Financial Investor): That's not everybody's cup of tea, you know. No, I think that my objective is to maximize the returns on my investments.

VILLAVICENCIO: Sixty-six-year-old Raymond Martin is a Foreign Service retiree and MMA Praxis investor. He's more forgiving.

Mr. RAYMOND MARTIN (Financial Investor): To be honest, in their first years, they haven't done as well as some of the other mutual funds.

VILLAVICENCIO: Yet he remains loyal.

Mr. MARTIN: We feel a certain attachment because it's Christian, because it's Mennonite, so we don't have any intention of taking out the money that we've already invested there.

VILLAVICENCIO: But despite this mixed-performance record, the industry's faith-based arm is thriving, growing four times as fast as the overall mutual fund industry in the last six years.

Monica Villavicencio, NPR News.

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