Are Christian Mutual Funds Legit?

So, you’re a Christian who wants to invest, but you aren’t sure where to put your money—or who all these companies are backing. What if you end up investing in something that goes against your values? Like sin stocks! What in the world are those? We’re glad you asked. Investing is an awesome opportunity, but it can get pretty confusing when you add in really specific factors—like Christian investing. Let’s dig into this kind of faith-based investing and what it means for your investments.

What Is a Christian Mutual Fund?

These types of mutual funds invest money in companies that line up with Christian values. It’s a way you can screen where you’re investing your money and put it behind what you believe in. Just keep in mind that these funds claim to be “biblically responsible,” but that’s all open to their definition of what they think. Still, if you’re looking to put your investing where your values are, then this is a way you can.

What Are Sin Stocks?

Heads up—you won’t find a little pitchfork next to their title. Sin stocks usually fall into the category of all things tobacco, alcohol, gambling and weapons. Really anything that some people would find unethical or immoral would fall into the sin stock group.

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But here’s the thing: A mutual fund that has a couple sin stocks in it shouldn’t be a huge deal breaker—even if you don’t agree with what they do as a company. You’re not going to be able to police everything a company does with a fine-tooth comb. Just use good judgement here, but don’t drive yourself nuts.

What Does Dave Ramsey Recommend for Christian Investing?

If you want to invest in a Christian mutual fund, Dave says you need to do your homework. Research these funds just like any other mutual fund. Does it have good rates of return? Does it have a good track record?

Still, Dave doesn’t go around looking for mutual funds that avoid sin stocks. That’s because buying a stock in a mutual fund company is not the same as supporting that company. When you buy stock in a mutual fund company that has holdings in a company like Anheuser-Busch (who makes beer), you’re not giving a penny to Anheuser Busch. So you’re really not harming or supporting any of these companies with your mutual fund investment. 

Think of it like buying a car. The first time a BMW is sold, it’s sold by BMW, and BMW makes money. But after that, the car is sold at dealerships, used car lots or even through private sellers on the internet. It’ll be sold to a lot of different buyers over the years. And BMW doesn’t make any more money off the sale of that same car once they let go of it.

Don’t lose sleep over a mutual fund that has a few sin stocks in it—even if you don’t agree with what they do. If you start boycotting companies you don’t agree with, you pretty much rule out even having a bank account. So before you ever invest a single dime, just make sure you understand what you’re investing in. Always. Don’t just let someone else pick and choose what you invest in. Make sure you understand your investments and where you’re putting your money.

Bottom line? You shouldn’t invest in companies you don’t agree with. You also shouldn’t invest in something just because your views align—that doesn’t make it a good investment. You’ve got to think things through from all angles here. Not sure how to recognize a good investment? Work with a SmartVestor Pro! These are trusted people with the heart of a teacher who will take care of you and your investments.