A new company from Oklahoma called FaithShares Advisors has filed with the SEC to offer a family of ETFs designed to attract religious investors. The funds are not yet available and, in the current environment, may never see the light of day. The idea is still quite interesting, though.
“Socially-responsible” ETFs are not new: iShares KLD Select Social Index Fund (KLD) has been around since 2005, and there are dozens of socially-responsible mutual funds. In theory, many investors would like to invest in companies that reflect their personal values – or at least avoid those they find objectionable. Some people want to follow the doctrines of a particular religion while others are interested in protecting the environment, promoting world peace, etc. Unfortunately, values vary so widely that it is hard to please enough people to offer a viable product.
Faithshares is trying to address this by slicing the pie even smaller. Their plan is to offer five ETFs directed at different Christian denominations:
- The FaithShares Baptist Values Fund
- The FaithShares Catholic Values Fund
- The FaithShares Christian Values Fund
- The FaithShares Lutheran Values Fund
- The FaithShares Methodist Values Fund
The ETFs will track indexes designed by KLD Research & Analytics. I was unable to find any information on these indexes, though the KLD web site describes several others. Given the complexity of modern corporations, this project may require a lot more theological parsing than they think. Inevitably, there will be conflicts between optimum investment performance and the values each index is supposed to represent.
I give FaithShares an A for effort – but I suspect their project will need a lot of prayer if it is to succeed.