Invest Where You Believe is the slogan of the Moravian Ministries Foundation. It is a slogan or mission statement that resonates with me and speaks to my personal belief as a follower of Jesus Christ. I believe that I should push a significant portion of my charitable donations toward Christ and His Kingdom’s work on this earth. That includes our church and various ministries that serve basic human needs but primarily spiritual needs by sharing the Gospel. I know that many Moravians agree with me in that assessment and it is truly lived out by you each day of your life in your church, your community and the mission field.
What if we flipped the message around and in addition to saying “invest where you believe,” we also said, “invest in how you believe.” What I mean by that is simply investing in a way that also reflects your Christian beliefs and values in the underlying investments that you own in your account or portfolio. For years this has been called socially responsible investing or SRI. Modern times have driven the industry to expand the definition to include environmental, social, and corporate governance issues versus a historic prohibition to sin stocks (i.e. pornography, alcohol, tobacco, firearms, drug companies, etc.). This has been an important issue to many investors through the years and continues to be discussed by several of our clients and perhaps many of you as you read this.
Usually in the world of investing, the rule of thumb is that sin sells and/or profits and those stocks invested in the types of companies mentioned above tend to perform very well. I myself have cautioned investors that managing portfolios through an Environmental, Social, and Governance (ESG) lens often leaves your portfolio behind, i.e., trailing the broad market’s performance. Money magazine’s August issue features an article on this type of investing and points out many of the positives in 2017’s performance. In fact, since the election many of the socially responsible stocks are performing quite well. Interest in this type of investing is growing. Morningstar, a mutual fund rating agency, says that over $205 billion is invested in this type of asset in 2017 so it bears further tracking and discussion.
Our investment partner, TIAA Kaspick, has several portfolios focused in ESG screening. They build portfolios featuring money managers that seek to include companies with positive environmental, social and governance records and to exclude those with poor records. The portfolios do not exclusively feature ESG managers, but they definitely have a strong tilt in that direction. If you are concerned about climate change, natural resource use, waste management or environmental opportunities, these portfolios may interest you. If you or the boards you serve have questions or you would like more information on ESG, give me a call. Until next time, enjoy your summer and God Bless.