At TIFIN Grow, we believe that with investment personalization, it’s critical to help clients invest in what matters most to them. This should not end at clients’ religious beliefs.
We sat down with BrightPortfolios, a firm that offers asset allocation portfolios and automated solutions to financial advisors, to learn more about solutions within this growing area.
TIFIN Personality: Tell us a bit more about the Faith Driven Investing space? What would you say to somebody entirely new to this concept?
BrightPortfolios: Faith Driven Investing (FDI) goes by many names. It’s also called Biblically Responsible Investing (BRI) Morally Responsible Investing, Faith Based Investing, and Christian Investing, among others. The various definitions encompass the crux of Biblical investing as a way for Christian investors to integrate faith with their finances and honor their beliefs with our wealth.
When we buy stocks, mutual funds, or ETFs, we’re taking ownership stakes in businesses. Therefore, we are supporting and profiting from the activities of the businesses we own in our investment portfolios. And we believe it’s critical to align those with our values as Christians.
TIFIN Personality: How long has this type of investing been around?
BrightPortfolios: Although Faith Driven Investing has been around since the 1980s, its recently – within the past 10 years – started gaining traction with advisors and investors. In fact, Faith Driven Investing has grown into a large movement adopted by fund managers, financial advisors, and investors across the country. There are more Faith Driven Investing mutual funds and ETFs available today than ever before.
TIFIN Personality: What are some areas that are included in the screening process?
BrightPortfolios: At BrightPortfolios, we use a combination of ETFs and mutual funds to build broadly diversified, biblically-screened investment portfolios. We seek to maximize risk-adjusted returns while keeping expenses as low as possible.
More broadly, a Faith Driven Portfolio should avoid investing in companies that intentionally harm others for the sake of profit. This strategy may exclude companies that profit from the sale of alcohol, tobacco or cannabis, as some examples.
Importantly, through research and fundamental analysis, we can invest in companies that seek to create value and have positive impact for all stakeholders. This approach helps align our investment portfolio with scripture and gives us peace of mind that we are not profiting from the abuses of others. When we do so, we are investing to support our beliefs, and investing itself can become an act of worship.
TIFIN Personality: Like any purpose-based investment area, investors of course want to make sure that they don’t sacrifice returns. What do you say to somebody with those concerns?
BrightPortfolios: There are plenty of studies that show when companies do good, they do well. One example comes from the Biblically Responsible Investment Institute (BRII) who carefully assessed the impact of screening the S&P 500 over the last twenty years. We think the results are reassuring to investors. BRII tracked a portfolio of companies passing their comprehensive biblical screens versus the unscreened index. While BRI screening resulted in a slight disadvantage in some periods and a slight advantage in others, the screened portfolio matched the return of the S&P 500 in the long run.
TIFIN Personality: What are some things an investor should look out for when they’re aiming to adopt a portfolio that better aligns with their values?
BrightPortfolios: As an investor considering implementing Faith Driven Investing, it can be difficult to know where to start. Of course we are available to help, but if somebody already works with a financial advisor, start a conversation with them. Many advisors are still unaware of this concept and would welcome the discussion.
For investors seeking to learn more, there are industry resources including Faith Driven Investor and Kingdom Advisors, an organization for Christian financial professionals. Investors may choose to work with advisors with the Certified Kingdom Advisor® accreditation, part of Kingdom’s community of biblical advisors who go through education and testing to earn their place in that community.
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BrightPortfolios provides compensation to TIFIN Grow, LLC or one its affiliates to be a sponsored fund which provides the fund greater visibility. TIFIN Grow, LLC has a financial interest to promote and market investment solutions from BrightPortfolios that can conflict with the interests of its clients. This material is provided for informational purposes only and should not be construed as individualized investment advice or an offer or solicitation to buy or sell securities tailored to your needs.