The number of faith-based mutual funds and exchange-traded funds (ETFs) has grown tremendously over the last few years.
These funds make investments based on the principles and teachings of a religion.
How It Works
Most faith-based ETFs and mutual funds (no matter the religion) avoid companies that produce alcohol, tobacco and pornography. Some funds have a much longer list of banned investments, including companies engaged in producing and selling firearms, those in the oil industry, those related to gambling and, at times, banks. Some funds avoid companies whose corporate culture they find disagreeable.
The level of strictness depends on the religious principles that govern the funds. These principles may differ from your personal beliefs. Individual funds within similar faith categories will also have varying levels of strictness.
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