The Evolution and Impact of Values-Based Investing: A Faith-Focused Approach to Financial Stewardship
Values-based investing, also known as faith-based or biblically responsible investing (BRI), represents a growing movement in the financial world where investors align their portfolios with their moral and religious convictions. This investment approach combines the pursuit of financial returns with adherence to specific ethical and religious principles, particularly those derived from Christian theology.
Historical Development
The roots of values-based investing trace back to the 18th century when religious groups like the Quakers and Methodists began advocating for ethical business practices. However, the modern faith-based investment movement gained significant momentum in the 1990s with the establishment of pioneering organizations like the Timothy Plan.
Core Principles and Screening Methods
Values-based investing typically employs both negative and positive screening methods:
Negative Screening
Investment managers exclude companies involved in activities that conflict with biblical principles, such as:
- Abortion and embryonic stem cell research
- Adult entertainment and pornography
- Alcohol, tobacco, and gambling
- Companies supporting or promoting anti-family lifestyles
- Predatory lending practices
Positive Screening
Managers actively seek companies that:
- Demonstrate strong corporate governance
- Practice environmental stewardship
- Support traditional family values
- Engage in charitable giving and community development
- Maintain fair labor practices and positive workplace environment
Notable Organizations and Their Impact
The Timothy Plan
Founded in 1994, the Timothy Plan became the first mutual fund family to implement a pro-life, pro-family screening system for its investments. This groundbreaking approach demonstrated that investors could achieve competitive returns while maintaining their religious convictions. The success of the Timothy Plan paved the way for other faith-based investment firms and helped establish BRI as a legitimate investment strategy.
Eventide Investments
Established in 2008, Eventide Investments has emerged as a leader in values-based investing by implementing what they call "business as ministry." Their approach goes beyond traditional negative screening to actively seek companies that create value for society. Eventide's funds focus on businesses that serve important human needs, enabling human flourishing through their products and services.
Inspire Investing
As a more recent entrant to the field, Inspire Investing has leveraged technology to democratize biblical investing. Their innovative approach includes the development of the Inspire Impact Score™, which helps investors evaluate companies based on biblical values. They've also pioneered biblically responsible ETFs, making values-based investing more accessible to retail investors.
Crossmark Global Investments and Bob Doll
A significant addition to the values-based investing landscape is Crossmark Global Investments, particularly through the leadership of renowned strategist Bob Doll, who serves as their Chief Investment Officer. Doll, known for his annual market predictions and decades of investment experience at major firms like BlackRock and Nuveen, brings additional credibility to the faith-based investment space. Under his guidance, Crossmark has strengthened its position as a leader in values-based investing by combining traditional investment expertise with faith-based screening methodologies.
Kingdom Advisors
While not an investment firm itself, Kingdom Advisors has played a crucial role in advancing values-based investing by training and certifying financial professionals in biblical financial principles. Their Certified Kingdom Advisor® designation has become a respected credential for financial professionals serving faith-motivated investors. Through education and professional development, Kingdom Advisors has helped establish standards and best practices in the faith-based investment community.
Performance and Market Impact
A common misconception about values-based investing is that it necessarily sacrifices returns for principles. However, research and market performance have shown that this is not inherently true. Many faith-based funds have demonstrated competitive returns while maintaining their ethical standards. This success has helped drive the growth of the sector, with billions of dollars now invested in biblically responsible funds and ETFs.
Current Trends and Future Outlook
Several trends are shaping the future of values-based investing:
Technology Integration
Digital platforms and automated screening tools are making it easier for investors to align their portfolios with their values. This technological advancement has reduced costs and increased accessibility for retail investors.
Growing Institutional Interest
More institutional investors, including church endowments and faith-based organizations, are adopting BRI strategies, bringing greater legitimacy and scale to the sector.
Conclusion
Values-based investing represents a significant evolution in how faith-motivated individuals approach wealth management. The success of organizations like the Timothy Plan, Eventide, Crossmark, and Inspire Investments demonstrates that investors need not choose between their principles and financial returns. As the movement continues to grow and evolve, it is likely to play an increasingly important role in shaping both investment practices and corporate behavior.
The future of values-based investing appears bright, with technological advances and growing institutional support creating new opportunities for investors to align their portfolios with their faith. As more investors seek to integrate their faith principles with their financial decisions, the influence of biblical investing principles on the broader investment landscape is likely to continue expanding.
Take the Next Step in Your Values-Based Investment Journey
If you're interested in aligning your investments with your faith and values, Hampton Square Wealth Management is here to help. Our team of experienced advisors specializes in values-based investing strategies that honor your beliefs while pursuing your financial goals. Our portfolio managers work with Timothy Plan, Eventide, Crossmark, Inspire, and others to meet or exceed benchmark returns. We understand the unique intersection of faith and finance, and we're committed to helping you make investment decisions that reflect both your principles and priorities.
Contact Hampton Square Wealth Management today to start a conversation about your values-based investment strategy:
- Schedule a consultation in-person or remote: 973-251-5000
- Email: info@hampton-square.com
- Visit: www.hampton-square.com
Let us help you discover how you can invest with both purpose and conviction.