Biblical ETF Makes Misleading Claims

October 15, 2019

Benchmarks Switched In Spring

Complicating matters is the fact that, between April and May of this year, the benchmark for comparison that Inspire had been using in its literature changed.

Prior to the MSCI ACWI Equal Weight, Inspire had been comparing BLES in its literature to the vanilla MSCI ACWI, a market-cap-weighted total stock index.

The fund's most recent prospectus, dated April 1, uses the MSCI ACWI; while its most recent Semi-Annual Review, dated May 31, uses the MSCI ACWI Equal Weight.



(For a larger view, click on the image above)


Source: BLES' prospectus, dated April 1, 2019



(For a larger view, click on the image above)


Source: BLES' Semi-Annual Review, dated May 31, 2019


(Author’s Note: BLES’ Semi-Annual Review uses the MSCI ACWI Equal Weight – Price Return, once again explicitly comparing BLES' total return to its benchmark's price return.)

Interestingly, BLES' relative performance compared with the MSCI ACWI isn't nearly as positive. Whereas Bloomberg data shows BLES indeed outperforms the MSCI ACWI on all time frames examined—albeit much more modestly than Inspire claims—BLES actually lags the total return of its former benchmark across those same time periods.


  YTD Total Return 1-Year Total Return Since-Inception Total Return
BLES 16.68% 0.97% 6.30%
MSCI ACWI 16.72% 1.96% 9.14%

Source: Bloomberg


When asked about the reason for the benchmark switch, Netzly at first denied using the MSCI ACWI as a comparative benchmark (instead falsely claiming that BLES' starting universe draws from the MSCI ACWI). Then, when pressed, he once again pointed to the firm's data provider as the reason for the switch.

"The data provider for our fund trust, who puts together our prospectus, did not have access to the equal-weight version of that index," he said, adding that internally, Inspire had always compared it to the MSCI ACWI Equal Weight.

"Even if we were using a market cap [index] and switched in an equal weight [index], it's just making it more accurate," he added. "The appropriate benchmark to use is an equally weighted benchmark, because it's an equally weighted fund."

Weighing Apples Against Oranges

Comparing an equal weight fund with an equal weight benchmark makes intuitive sense. However, comparing total return to price return makes less sense, and it's a choice that Inspire elected not to explain further to us, when pressed.

"A price return index on an income-generating asset class (like equities or bonds) measures the actual performance of exactly nothing," said Dave Nadig, managing director of "It represents no real-world investor experience, and no rational investor would ever choose one as the benchmark for any investment's performance."

"It’s equivalent to comparing your height to everyone in a room, when you get to stand on a step stool," he added. "You’ll get a number; you might even be 'tallest.' But mostly, you’ll get laughed out of the room."

In its press release, Inspire lauds how its relative performance data encourages "confidence" in the concept of biblical investing.

"The stellar performance of BLES bolsters our confidence that biblical values and good returns are not mutually exclusive,” said Netzly in the release. "BLES has shown the world that Inspire’s approach to investing in the most inspiring, biblically aligned companies in the world has yielded better returns than its secular benchmark."

Contact Lara Crigger at [email protected]

Editor's Note: We stand by our reporting, but have agreed to append the following statement from Inspire:

Inspire Investing disagrees with numerous claims in the recent article. We acknowledge that we made an honest mistake by inadvertently using the total return of our ETF compared with the price return of the index, and we began correcting that section of our release prior to the article. Unfortunately, the article misrepresents the accuracy and source of our data. Inspire is updating the press release, and our administrator has verified the accuracy of our NAV performance: click here.

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