Inspire Investing is the world’s largest provider of faith-based ETFs, offering investors an opportunity to align their deeply held beliefs with their investment portfolios. From screening out conflicting companies to providing proactive shareholder engagement, this innovative strategy aims to provide both financial returns and the satisfaction of investing with integrity. To learn more about why RIAs and BDs might consider this personalized approach to investing, Wealth Advisor Managing Editor Scott Martin sat down with CEO Robert Netzly to discuss Inspire Investing’s unique approach to faith-based investing.
Netzly introduced Inspire ETFs as a pioneer in faith-based investing, which his firm refers to as “biblically responsible investing.” This approach goes beyond traditional financial analysis and incorporates a moral aspect, focusing on where investment returns are coming from. The idea is simple but profound: investors should be aware of the ethical implications of their investments and strive to invest in alignment with their values.
His personal journey into faith-based investing sheds light on the convictions that drive Inspire ETFs. While managing money with Wells Fargo’s private client service in Carmel, California, Netzly realized that he personally owned stocks of companies involved in manufacturing abortion drugs. This revelation led him to question the moral implications of profiting from such investments. His values as the president of a local pro-life pregnancy center were significantly out of alignment with his investment choices. This personal experience propelled Netzly to create ETFs and other investment vehicles that enable faith-based investors worldwide to align their beliefs with their financial actions.
For RIA and BD advisors, the concept of alignment between values and capital is critical when working with clients who prioritize their ethical and moral beliefs. Inspire ETFs offer a solution to address this alignment, allowing investors to screen out companies that conflict with their values and instead invest in businesses that better reflect their principles.
Netzly suggests that the alignment between values and capital can potentially result in what he calls “values alignment alpha.” This unique perspective challenges the conventional notion that performance should be the primary driver of investment decisions. Instead, investors who prioritize their values are willing to accept potentially lower returns if it means investing in a manner consistent with their beliefs.
While Inspire Investing’s screening process is one aspect of aligning investments with values, its engagement efforts with companies also play a crucial role. The firm actively engages with companies to encourage them to change their practices. For instance, Inspire’s efforts have led companies such as Chevron and Costco to stop giving money to certain causes, aligning more closely with the preferred values.
Investing in faith-based ETFs can offer investors a built-in contrarian viewpoint and diversification relative to the broader investment marketplace. These ETFs often have a smaller-cap, more value-oriented tilt, which can appeal to investors who follow Fama-French factors. Additionally, they provide investors with an opportunity to express their social and religious beliefs in their portfolios, giving them a voice in shaping the values they want to promote in society.
Netzly emphasizes that investing with Inspire ETFs allows advisors to help clients pursue higher goals that extend beyond financial returns. By understanding what their clients hold dear, advisors can deepen their relationships and tailor investment strategies to reflect those values.
For advisors looking to incorporate faith-based ETFs into their clients’ portfolios, Netzly recommends the WWJD ETF (ticker symbol: WWJD). This international fund has gained popularity among investors and is performing exceptionally well. Notably, it avoids investments in China, which can be appealing to investors concerned about ethical considerations related to that market. The fund’s five-star rating from Morningstar further attests to its success.
Inspire Investing has rapidly become one of the fastest-growing investment firms in the nation, attracting investors who prioritize values alignment in their portfolios. As advisors consider the evolving landscape of investment options, faith-based ETFs such as those offered by Inspire Investing provide an avenue to cater to clients’ values and beliefs while aiming for financial success.
