There is a growing set of funds called “Faith based mutual funds”

These funds usually choose things to avoid.   Let me give you a few examples.

The Timothy Plan (Investing with Biblical Principles)

The Timothy Plan® family of funds employs specific moral screening criteria designed to avoid investing shareholders’ money in any company that has a pattern of contributing to the cultural degradation of our society. As a result, the Timothy Plan’s screens prohibit investing in companies involved in abortion and/or pörnography, non-married lifestyles, as well as companies involved in the production of alcohol, tobacco or gambling.

Who decides which biblical priciples?  Is it ok to invest with slave traders?

However, you may purchase male or female slaves from among the foreigners who live among you.  You may also purchase the children of such resident foreigners, including those who have been born in your land.  You may treat them as your property, passing them on to your children as a permanent inheritance.  You may treat your slaves like this, but the people of Israel, your relatives, must never be treated this way.  (Leviticus 25:44-46 NLT)

Here are some of the types of companies they wont invest in Alcohol, I guess they wont invest in companies that provide wine for churches.  Whoa… that will blow your mind.  And no Tobacco, Gambling or  Pornography companies.

They promote a long list of virtues but I think my favorite is “Piety”.

Piety gives us a sense of duty to uphold the moral standards upon which our great nation was founded.

It appears that sucking up your money is a christian value.  The “A” class of shares start off by taking 5.5% of your money as a front end load.  That is followed up with above market expense ratios.  The Timothy Plan Large/Mid Cap Growtha “A” fund has an annual expense ratio of  1.56% and the average growth fund is about 1.39% and a nice no load index fund is about ) 0.20%.   This fund has a total five year return of about -5% while large cap funds have returned 10% and Mid-Cap funds have returned 17%.  So you have a net performance of -27% when compared to the average mid cap fund and -40% when compared to the Vanguard Mid-Cap Index fund – Ouch!

This entry was posted on Monday, April 12th, 2010 at 6:10 AM and is filed under investing. You can follow any responses to this entry through the RSS 2.0 feed.Both comments and pings are currently closed.