As America’s largest oil spill prompts worldwide debate on corporate ethics, conscientious investors—caught in the perfect storm between conscience and the Great Recession—”are still aggressively seeking ways to align their values with good value,” said Tom Phillips, co-founder and president of the world’s first and only family of Christian-values exchange-traded funds (ETFs).
BP and FaithShares®
Tailoring its five funds according to the tenants of the country’s four largest Christian denominations* (Catholic, Baptist, Methodist and Lutheran), as well as a non-denominational fund, FaithShares also screens for social, governance and environmental scores. For example, a key BP contractor involved in the current oil spill did not pass FaithShares’ environmental filter in 2009. In fact, none of the companies involved in the BP crisis have ever been included in FaithShares’ funds.
“Value and values need not be contradictory,” said Phillips, a 33-year investment industry veteran. Launched in December, FaithShares conducted its first annual rebalancing Friday (June 18) after out-performing the broad market as measured by the S&P 500 in its first six months.
The first and only ETF of its kind, FaithShares is designed to enable large and small investors alike to align their good values with the potential for good value.
“While larger investors can give millions to a money manager and ask that it be managed in accordance with their beliefs,” Phillips told The Wall Street Journal last December, “smaller investors have had few ways to do that.”
How Does It Work?
Starting with the 400 largest U.S. stocks, FaithShares tailors each fund according to the particular tenants of the country’s four largest denominations as well as a non-denominational fund. While the five funds have many stocks in common, approximately 30 percent differ according to a specific denomination’s tenants.
For example, in the Catholic Values Fund, investments in pharmaceuticals that produce, provide or promote birth control are prohibited, but may be included in the Baptist Values Fund. Stem cell-related investments are permissible in the Lutheran Values Fund, but not in the Christian Values Fund. Other criteria considered include nuclear power, weapons of mass destruction, pornography and more. FaithShares then applies a proprietary screen for environmental, social and governance scores. The top 100 stocks based on those scores are then equally weighted to match the FTSE U.S. Large Cap Index.
The 100 stocks are placed in five funds:
- FaithShares® Catholic Values Fund (FCV)
- FaithShares® Baptist Values Fund (FZB)
- FaithShares® Methodist Values Fund (FMV)
- FaithShares® Lutheran Values Fund (FKL)
- FaithShares® Christian Values Fund (FOC)
What’s New? What’s Different?
Until the launch of FaithShares in December 2009, brokers and financial advisors had no ETF options for investors looking to align their Christian values with their investments. FaithShares Christian Values Funds offer a one-of-a-kind tool for individuals and faith-based institutions looking to combine their faith with financial investments. As compared with mutual funds, ETFs generally offer lower management fees, better tax efficiency and convenient trading through most registered and discount brokers.
“We created these funds to meet the needs of investors who want to participate in the potential of the stock market, yet be good stewards of their money. That has worked out very well,” Phillips said.
FaithShares® Advisors, LLC launched in December 2009 and is the world’s first and only Christian-values exchange-traded fund. For more information about FaithShares visit www.FaithShares.com. To purchase FaithShares ETFs contact your investment advisor or a discount broker.
For an interview on the trends in values-based investing with FaithShares Co-founder and President Tom Phillips or CEO Garrett Stevens, contact Christine Cape at 770.813.0000 or 404.545.0085 mobile.
*(2008 American Religious Identification Survey)
Carefully consider the Funds’ investment objectives, risk factors, charges, and expenses before investing. This and additional information can be found in the Funds’ prospectus, which may be obtained by calling 1-877-FAITH55 (1.877.324.8455), or by visiting www.faithshares.com. Read the prospectus carefully before investing.
This information is not an offer to sell or a solicitation of an offer to buy shares of any Fund to any person in any jurisdiction in which an offer, solicitation, purchase or sale would be unlawful under the securities laws of such jurisdiction.
Shares are bought and sold at market price (not NAV) and are not individually redeemed from the Fund. Brokerage commissions will reduce returns.
Investing involves risk, including the possible loss of principal. In addition to the normal risks associated with investing, narrowly focused investments typically exhibit higher volatility.
FaithShares Funds are distributed by SEI Investments Distribution Co., which is not affiliated with FaithShares Advisors, LLC or any of its affiliates.
Performance through 6/16/2010 for the FaithShares Portfolios is: Baptist Values 5.30% at NAV, 5.19% at Market Price (3 month as of 3/31/2010) 9.76% at NAV, 9.62% at Market Price (since inception, 12/14/2009). Catholic Values 5.59% at NAV, 5.59% at Market Price (3 month as 3/31/2010) 15.22% at NAV, 13.93% at Market Price (since inception, 12/8/2009). Christian Values 5.78% at NAV, 5.78% at Market Price (3 month as of 3/31/2010) 15.79% at NAV, 14.87% at Market Price (since inception, 12/8/2009). Lutheran Values 5.34% at NAV, 5.25% at Market Price (3 month as of 3/31/2010) 6.32% at NAV, 6.59% at Market Price (since inception, 12/14/2009). Methodist Values 5.86% at NAV, 5.74% at Market Price (3 month as of 3/31/2010) 15.5 % at NAV, 14.33% at Market Price (since inception, 12/8/2009). Since inception returns are annualized.
The performance data quoted represents past performance and does not guarantee future results. Investment return and principal value of an investment will fluctuate so that an investor’s shares, when sold or redeemed, may be worth more or less than their original cost. Market price returns are based upon the midpoint of the bid/ask spread at 4:00 Eastern Time and do not represent the returns you would receive if you traded shares at other times. Current performance may be higher or lower than the performance quoted. For performance data current to the most recent month end, please call 1-877-FAITH55 (1.877.324.8455), or visit www.faithshares.com. Expense ratio for all funds is 0.87%
Performance through 6/16/2010 for the S&P 500 Index is: 5.36% (3 month as of 3/31/2010), 3.13% (12/8/2009 through 6/16/2010), 1.04% (12/14/2009 through 6/16/2010).
Index returns are for illustrative purpose only, one cannot invest directly in a index.