FEM logo
Fund EcoMarket

the sustainable, responsible and ethical investment information hub

Style Name: Faith based funds

Funds that are specifically designed to meet the needs of a named faith or religion

Brief description of Style

Faith based funds invest in line with specific religious principles (e.g. Shariah Law)

SRI approach applied

Faith based funds typically use negative ethical screening as part of their investment process in order to create funds that meet the requirements of a named religion or faith.

Decisions may be guided by an external committee or panel of experts or use specialist indices which list allowable constituents.

SRI issues covered

Funds invest in line with a set of policies that meet the needs of their intended clients. This may include, for example, the avoidance of the payment of interest, avoiding companies involved in pornography, gambling or alcohol – which are required by Islamic investors.

Variation across Style segment & associated Styles

There is little choice in this market at present as there are relatively few options available. Retail faith funds are mainly intended for Islamic investors although options may exist for other faith groups from specialist providers. Interpretation of ethical principles may differ.

NOTE: The ‘Faith Friendly’ filter option within the Fund EcoMarket ‘Other Features’ filter box is intended to help users find other potentially appropriate options.

Impact on investment strategy

Faith based exclusions may substantially impact where a fund manager can invest. Funds may use specialist benchmarks to gauge performance or guide investment decisions.

Who is this Style most likely to appeal to?

Faith based funds are primarily intended for investors who want to invest their money in line with a specific named faith – which primarily means Islamic investors who are looking to invest in line with Shariah principles.

Associated Styles

These funds have features in common with some Balanced and Traditional Ethical funds some of which have their origins in the (e.g. Methodist and Quaker) Christian beliefs.

Please also see the ‘Faith Friendly’ filter option within the ‘SRI Features’ area of the Fund EcoMarket tool for other options that may suit investors with faith related investment aims, but which are marketed as ‘ethical’ options.

(Note: There is also now a movement of Catholic investors who are seeking to encourage more responsible investment strategies, although these may not be accessible to individual investors.)

Associated Jargon

Sharia funds, Islamic Finance

Providers

Offered by very few fund providers

 

 

Sign Up to our Newsletter

If you are a Financial Services Industry professional you can sign up for our newsletter

Click Here

Latest News

SRI Services and Partners annual event 6 October 2022
August 12, 2022

The SRI Services & Partners annual Good Money Week event will be back, in person, on 6 October 2022 Sign up here As in previous years there will be a combination of expert keynote presentations and fund manager panel sessions. The main details are: Date: Thursday 6 October Main conference: 10 – 5.30pm Drinks reception:  […]

ILP Moneyfacts – Sustainability slow, slow, quick
July 18, 2022

Below is a link to an article that I wrote for this month’s Investment Life and Pension Moneyfacts. (Just published – July 2022) My title for the piece was “Sustainable investment: slow, slow, quick” in recognition of the accelerating  pace of change in all things sustainable investment, particularly climate change. Their title ‘Putting down roots’ […]

How SDR should help financial advisers
July 14, 2022
How SDR should help UK financial advisers

The journey to SDR and how it should help financial advisers