Faith-Based Investing Makes Up Grounds in Gains and Convenience
Faraz Ahmed, head of the online help platform at Google, said his portfolio for years was focused on stocks to avoid the Islamic prohibition against interest. But he worried that was too risky.
by The New York Times
The intersection of faith and money can be complicated.
But investing by the tenets of your faith has become easier, and in many cases it’s neither less profitable nor more risky than investing without a religious screen. There are Islamic exchange-traded funds and real estate investment trusts, Jewish venture capital funds and Catholic separately managed accounts.
And these strategies are not just attracting investors of the same faith. In some cases, people are choosing to participate in what they see as a solid investing strategy regardless of its religious tenets.
“What we’ve seen is faith-based investing, like sustainable investing over all, is much easier to do now than it has been in the past,” said Jackie VanderBrug, head of sustainable and impact investing in the chief investment office at Bank of America. “In the past, clients would have been told that faith-based investing is a great way to lose money. We can say now that you don’t have to give up risk-adjusted returns to invest this way.”
Ms. VanderBrug added that the pandemic and the social unrest that began last summer with George Floyd’s killing had prompted more people to look to their faith and to invest in a way that expressed their values.
“The pandemic brought to light our collective interdependence and vulnerability,” she said. “We now have this lived experience of our interdependence.”
As with investing with environmental, social and governance criteria, faith-based investing allows people to adhere to the tenets of their faith while still having a diversified portfolio, albeit with some exceptions.