Morally sound stocks sought

• Article
• Comments ()
• Click-2-Listen
• Videos

By

The love of money doesn't have to be the root of all evil, according to several organizations active in "values investing."

The search for stocks and mutual funds known for religious virtue as well as financial vitality has shot up in recent years with a proliferation of evangelical Protestant, Catholic and Muslim investment companies.

The Matthews, N.C.-based Stewardship Partners, for instance, specializes in "biblically responsible" stocks in companies that eschew abortion, alcohol, gambling, tobacco, pornography, cloning, stem-cell research and homosexual rights.

Investors must be well-heeled, as the starting fee is $100,000 and the company is managing $230 million in stocks in 580 accounts.

"We help people make money and we hope they can send some of that money back into the work of the Lord," says Rusty Leonard, a former executive vice president with Templeton Investment Counsel Inc. who founded the company in 2001. His company's investment returns, he added, have outperformed the Standard & Poor 500 index, by 26.6 percent since then.

Stewardship Partners praises Cisco Systems, a San Jose, Calif. communications-technology designer that emphasizes helping charities with technology and employee loans, and has programs for wounded American veterans and refugees in Jordan and Israel.

On the opposite end is Rupert Murdoch's News Corp., owner of Fox News, Fox Faith and Zondervan, the latter an evangelical Christian publisher. Nevertheless, Stewardship hits on Fox for its "anti-family" TV programs, "gambling interests" and its collection of hard-core porn channels for its British Sky Broadcasting subsidiary.

"The Lord's called you to be a steward of what He's giving you," Mr. Leonard said, "and you should bring that wealth under His authority. I don't want to invest in companies that are working at odds with everything He is trying to achieve in this world."

Planned Parenthood and various pharmaceutical companies that manufacture abortifacients, are huge beneficiaries of investment income, he added.

"We hope to go to corporate boards asking why they donate to such a contentious issue when so much of their shareholder base is against this," he said. "About 30 percent of the average shareholder base is against abortion."

One of the pioneers of spiritual investing is the Winter Park, Fla.-based Timothy Plan, which debuted in 1994 with one mutual fund and no assets. Now at 10 funds and $600 million in assets, it recently signed a brokerage agreement with Merrill Lynch.

Arthur Ally, president of the Timothy Plan, estimates some 40 million U.S. Christians invest $3.3 trillion in mutual funds, based on figures provided by evangelical pollster George Barna.

"If Christians invested along the moral values they claim to have, they would transform the culture," he said.

His company has a blacklist of 450 funds — out of some 8,000 publicly traded funds — whose profits fund Planned Parenthood, gambling, adult TV fare and health benefits for same-sex couples. Tops on the list is Ford Motor Co., which in 2005 announced it would give up to $1,000 to the Gay and Lesbian Alliance Against Defamation for every Jaguar and Land Rover it sold to a member of GLAAD.

"They are catering to a fringe element. I have trouble understanding that," Mr. Ally said.

Several Catholic groups have jumped into the spiritual investments camp, such as Catholic Values Investment Trust, based in Bridgeport, Conn. Founded in 1997, it steers money away from companies promoting birth control, abortion and weapons of mass destruction.

The Ave Maria Catholic Values Fund group steers money toward companies that follow Catholic moral principles.

As for Muslims, the Amana Mutual Funds Trust, which oversees two Islamic-related funds, diverts money from companies involved in gambling, liquor, pork products and pornography. The Bellingham, Wash.-based company began operations in 1986.