Religion-Based ETFs Return With Real Promise

March 31, 2017

Pennies From Heaven

There is an area, though, that fosters maybe the most fervent supporters when it comes to principles: religion.

Also over the last year, there has been another green shoot sprouting in this area of socially responsible investing: religious-valued ETFs. While not as much a headline grabber as SHE and climate-friendly funds, there have been two religious-based ETFs launched this year: the Inspire Global Hope ETF (BLES) and the Inspire Small/Mid Cap Impact ETF (ISMD).

Both are equity funds that track equal-weighted indexes that screen stocks that are in alignment with biblical values and positive impact on the world according to various socially responsible criteria. Since their launches on Feb. 28, BLES has attracted $28 million in assets and ISMD has $18 million in AUM. That’s pretty darn good for a new issuer with a niche focus, in a little over a month.

There have been other funds that intimate a religious bent, but these two funds spell out clearly that the Bible is a guiding hand in stock selection.

Catholic Values ETF

Last year around this time, the reiteration of overtly religion-focused ETFs came on the scene with the Global X S&P 500 Catholic Values (CATH), which has attracted $89 million in assets since it launched last April 18. Again, that AUM is nothing to sneeze at. CATH, like SHE, has performed well, with a return of 14.26% since launch versus SPY’s 15.72% during that time.

CATH tracks an index of U.S. large-cap stocks selected from the S&P 500. The cap-weighted index omits companies from certain industries at odds with Catholic values. The fund tracks the S&P 500 Catholic Values Index.

The relative success of CATH and the auspicious start for BLES and ISMD should be closely watched by ETF issuers, because this space could potentially be the next big thing in the socially responsible ETF world.


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