I have advised clients from all walks of life, and the most resonant financial plans are always those that are deeply aligned with personal values. For members of the Church of the Brethren and other Anabaptist traditions, the notion of simply maximizing returns feels hollow, if not contradictory. Their faith calls for a life of peace, simplicity, service, and stewardship—principles that must extend into the realm of investing. This is not a niche concept; it is a holistic approach to finance I term Brethren Values Investing. It moves beyond the avoidance of “sin stocks” to a proactive, positive strategy of using capital as a tool for good, in a way that is consistent with centuries of faith-based witness. For investors seeking this path, the journey is about building a portfolio that reflects their beliefs without sacrificing prudent financial stewardship.
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The Theological Foundation: More Than Avoidance
The Church of the Brethren, rooted in the Anabaptist and Pietist movements, holds core values that directly inform a philosophy of investing.
- Stewardship (The Most Central Principle): This is the belief that all resources—money, time, the earth itself—are gifts from God entrusted to human care. Investors are not owners but stewards. This reframes the entire purpose of investment from personal enrichment to faithful management. The question shifts from “How can I make the most money?” to “How can I manage these resources in a way that honors the Giver and benefits His creation?”
- Peace and Nonviolence: The Brethren commitment to peace is not merely the absence of war but the active pursuit of reconciliation and justice. This principle naturally leads to avoiding companies profiting from weapons manufacturing, military contracting, or technologies that enable violence and oppression.
- Simplicity: A call to live simply challenges the culture of consumerism and unchecked materialism. Investing should support sustainable and equitable economic models, not companies that exploit human desires or create unnecessary waste.
- Service and Community: The ethic of “neighbor love” and mutual aid encourages investments that strengthen communities, provide essential services like clean water and healthcare, and support economic development for the marginalized.
The Practical Application: A Three-Tiered Strategy
Putting these values into practice requires a structured approach. I guide clients through a process of negative screening, positive alignment, and community-focused impact.
1. Negative Screening (The “Thou Shalt Nots”)
This is the most common starting point—excluding companies whose activities fundamentally conflict with core values. For a Brethren-informed portfolio, this typically means screening out:
- Weapons and Defense Contractors: Companies involved in the production of firearms, munitions, missiles, military aircraft, and related technology.
- Tobacco: Producers of cigarettes, cigars, and other tobacco products.
- Alcohol: Brewers, distillers, and vintners.
- Gambling: Casinos, lottery operators, and online gaming platforms.
- Pornography: Adult entertainment companies.
This list can be expanded based on personal conviction to include sectors like fossil fuels (due to environmental stewardship concerns) or large-scale speculative banking.
2. Positive Alignment and ESG Integration (The “Thou Shalts”)
Values investing is not just about what you avoid; it’s about what you affirm. This involves proactively seeking out companies that demonstrate positive Environmental, Social, and Governance (ESG) practices that align with Brethren values.
- Environmental Stewardship: Investing in companies leading in renewable energy, sustainable agriculture, water conservation, and circular economy models.
- Social Responsibility: favoring companies with strong labor practices, safe working conditions, fair wages, racial equity initiatives, and positive community relations.
- Good Governance: Supporting companies with ethical leadership, transparent accounting, and shareholder rights. This aligns with the Brethren value of integrity.
This is where the investor moves from a defensive to an offensive strategy, using capital to reward and encourage corporate behavior that builds a better world.
3. Community Investing and Impact (The “Direct Action”)
The most profound expression of values-based investing is direct community impact. This involves allocating a portion of capital to vehicles that provide direct, measurable social benefit, often accepting a below-market rate of return in exchange for tangible good.
- Community Development Financial Institutions (CDFIs): These are banks, credit unions, and loan funds that provide credit and financial services to underserved communities. Depositing money into a CDFI or buying their notes directly funds affordable housing, small businesses, and community facilities in low-income areas.
- Microfinance: Supporting institutions that provide small loans to entrepreneurs, often women, in developing countries.
- Affordable Housing Projects: Direct investment in funds or projects that create and preserve housing for low-income families.
Implementation: Building a Brethren Values Portfolio
The practical challenge for an individual investor is implementation. Few have the time or expertise to analyze thousands of companies. Fortunately, the market has evolved to provide solutions.
Option 1: Values-Based Mutual Funds and ETFs
Many fund families offer products that cater to various values. The key is to look beyond the label and examine the fund’s prospectus to understand its specific screening criteria.
- Examples: Funds like the Pax Global Environmental Markets Fund (PGRNX) or the iShares MSCI KLD 400 Social ETF (DSI) apply rigorous ESG screens. The Eventide Gilead Fund (ETGLX) is explicitly faith-based, though its approach may blend with other Christian traditions.
Option 2: Working with a Faith-Conscious Advisor
A growing number of financial advisors specialize in sustainable and values-based investing. They can help you select individual stocks or funds that meet your specific criteria and build a properly diversified portfolio.
Option 3: A Customized Blend
A sophisticated approach might involve:
- Core Portfolio (80-90%): A broadly diversified, low-cost ESG index fund or a collection of values-aligned funds.
- Satellite Impact Allocation (10-20%): A dedicated allocation to community investments like a CDFI note or a microlending platform.
The Return Question: Performance and Faithfulness
The inevitable question is: “Will I make less money?”
Extensive research, including meta-studies from Morgan Stanley and others, has shown that ESG and values-based funds have historically performed on par with, and in some markets outperformed, conventional funds. The rationale is that companies with strong ethics, good governance, and sustainable practices are better managed and less prone to the reputational, regulatory, and litigation risks that can devastate a company’s value.
However, for the Brethren values investor, this may be the wrong question. The primary objective is not to maximize financial return but to achieve a faithful return. It is the return on values. If an investment perfectly aligns with one’s faith but delivers a 6% return instead of a 7% return, the trade-off is not a loss but a gain in integrity and witness. This is the heart of stewardship: managing money in a way that one can present before God and conscience with a clear heart.
Brethren Values Investing is a journey of alignment. It is the deliberate and prayerful work of ensuring that one’s financial resources are not working at cross-purposes with one’s spiritual convictions. It is a powerful testimony that every aspect of life, including the management of capital, is an arena for practicing peace, simplicity, and service to the community. By building a purposeful portfolio, an investor does more than secure their retirement; they participate in the ongoing work of stewardship and shalom.
