Muslim Investors Top 2005
Faith Funds Table
In a year when the Standard & Poor's
500 index has nudged up barely 5 per cent, investors would
have done better by investing according to the principles
of the Koran.
Among the small but rapidly growing band of faith-based mutual
funds, the main US Muslim fund has beaten funds run according
to the principles of the Catholics, the Mennonites, the Presbyterians,
and the evangelical Christians. In fact, with the $100m (£58m,
€84m) Islamic Amana Growth fund posting a 22 per cent
return for the year, they have pretty much beaten everyone,
according to data provided by Lipper.
Amana Growth and its sister fund, Amana Income, avoid investing
in any company that derives more than 5 per cent of its revenue
from alcohol, tobacco, pornography, gambling or the sale of
pork. It sold stock in Albertson's, a grocery chain, when
alcohol sales began to edge close to 5 per cent of revenue.
The Koran's ban on money lending also eliminates most financial
institutions. Morningstar, the fund tracker, notes that Amana
keeps stock turnover low because the Koran warns against speculation.
Apple, Qualcomm and Adobe are big holdings.
Another small fund aimed at the large US Muslim community,
the Allied Dow Islamic index, has reaped only 6.9 per cent
for the year. It invests 80 per cent of money in various Dow
Jones Islamic indices, with the remainder actively managed.
The Timothy Plan, which appeals mainly to evangelical Christians,
has a clutch of funds that avoid alcohol, tobacco, gambling,
abortion, pornography and also any companies that advertise
on shows which feature sex or violence. Its biggest, the Large
to Midcap Value Fund, has scored a return of 17.5 per cent,
this year after underperforming for some time.
Among the rest of the pack, the Ave Maria Catholic Values
fund - the flagship of four Ave Maria funds which hold a total
of $400m - has returned 6.3 per cent for the year. It avoids
investing in companies that facilitate abortion, donate to
Planned Parenthood, are involved in pornography or offer same-sex
partner benefits. That last requirement eliminates about 200
of the 500 companies in the S&P.
New Covenant, the Presbyterian mutual fund which, with $2bn
under management, is the heavyweight of the faith-based world,
and MMA Praxis, the mutual fund arm of the Mennonite Church,
have performed largely in line with the market. Both have
more in common with socially responsible investing, avoiding
companies that make firearms or that cause environmental damage
as well as screening out gambling and alcohol-related companies.
The tiny Vice Fund - which actively invests in alcohol, tobacco,
gambling and so on - has returned less than 5 per cent. (Courtesy
The Financial Times Ltd)