Biblically Responsible Investing (BRI) is an investment practice that filters out companies engaged in activities that conflict with biblical values. There are several different organizations that define various activities which do not represent Christian values. Some of the common activities BRI strategies avoid are:
· Alcohol, Gambling, and Tobacco
· Unsustainable Environmental Practices
· Human Rights Violations
This list of activities is very similar to a broader investment practice known as Socially Responsible Investing (SRI). SRI attempts to avoid companies that are engaging in activities that are perceived to be harmful to society. This practice obviously has a significant amount of overlap with BRI values.
Is A BRI Strategy Right For You?
Many people of faith look to incorporate their values into every facet of their lives, including investments. There are several considerations to take into account when implementing this type of strategy and although these considerations are important they are manageable.
It may take considerable resources in the form of time and research to ensure that your strategy reflects your values. It may prove difficult to build and manage a portfolio that 100% aligns with your values however, with enough research you should be able to get close. In addition to the regular task of managing a portfolio for diversification, risk, and return there is now the added task of ongoing monitoring to ensure that the portfolio aligns with your values. Even for the sophisticated investor this is the type of strategy that may require the assistance of a professional well versed in this area.
Other considerations you should be aware of are performance and cost. Performance may divulge from traditional investment portfolios and costs may be higher. Anytime you explicitly remove a potentially profitable investment for non-financial reasons there could be a performance impact. There is no way to know for certain whether this will positively or negatively impact performance. Despite not being able to know how performance will be affected we can be fairly certain that costs will be higher in this type strategy. This should come as no surprise as the additional research and due diligence a fund manager needs to do on a BRI strategy will incur costs greater than simply buying an index fund for example.
Where To Go From Here?
There is a saying that “you vote with your wallet”. By investing in companies that reflect your values and withholding investments from companies that are in conflict with your faith you are essentially voting with your wallet. Although I don’t believe that a BRI strategy is right for everyone that holds Christian values, I do want my clients and friends to be aware of this type of strategy and make that decision for themselves. I think this is particularly important for Christian institutions. As role models for their congregations and donors; Christian institutions can bring awareness to this topic by putting their investment dollars to work in strategies that reflect their values.
This commentary on this website reflects the personal opinions, viewpoints and analyses of the Financial Strategies Group, Inc employees providing such comments, and should not be regarded as a description of advisory services provided by Financial Strategies Group, Inc or performance returns of any Financial Strategies Group, Inc Investments client. The views reflected in the commentary are subject to change at any time without notice. Nothing on this website constitutes investment advice, performance data or any recommendation that any particular security, portfolio of securities, transaction or investment strategy is suitable for any specific person. Any mention of a particular security and related performance data is not a recommendation to buy or sell that security. Financial Strategies Group, Inc manages its clients’ accounts using a variety of investment techniques and strategies, which are not necessarily discussed in the commentary. Investments in securities involve the risk of loss. Past performance is no guarantee of future results.
This article is written by Brice Carter.