Biola Inspire White Papers
On This Page
- Introduction to BRI
- A Biblical Argument for BRI
- Performance Attribution of the First Biblically Responsible-based SRI Index
- Faith-based Investment and Sustainability
Introduction to BRI
Biblically Responsible Investing (BRI) is a growing movement among Christian investors and investment firms, with significant potential for cultural impact. BRI is an investing approach that seeks to ensure that a Christian is investing in a way that is consistent with the moral standards of the Bible. Is BRI a helpful investment approach? Or just a marketing ploy meant to exploit? As this paper will argue, BRI products, through their excluding, engaging and endorsing activities, help Christian investors maintain their integrity and responsibility to biblical stewardship while actively investing in the stock market.
A Biblical Argument for BRI
In the beginning, God’s commandment for us is to work and watch over the land (Genesis 2:15). While our culture has excelled at becoming more productive in our "working of the land" through modern portfolio theory and passive investing, we have gradually gotten worse at fulfilling the second part of God's commandment, namely, to "watch over" the very land that we are working. Christian investors can respond to this weakened ability to watch over the land by moving towards Biblically Responsible Investing (BRI).
Performance Attribution of the First Biblically Responsible-based SRI Index
In the U.S., two of the most important investment trends over the last 10 years have been the rise of index investing and the rise of Sustainable, Responsible and Impact (SRI) investing. So, it would make sense that new indexes would emerge based on SRI principles. One such index is the new Inspire Small/Mid Cap Impact Equal Weight Index, which is the first biblically-based SRI index. This paper briefly discusses the methodology of this index and shows that its strong back-tested risk-adjusted returns (relative to its non-SRI S&P benchmark), are not due to sector bias (as one would expect), but are attributed to favorable stock selection within each industry sector. This index is likely the beginning of a wave of more sophisticated passive products that will meet the needs of niche investor populations better than the active products of the past.
Faith-based Investment and Sustainability
The number of mutual funds and assets-under-management for religious-driven investment firms are increasing at a rapid rate. This paper’s research aims to comprehend not only their financial outcomes but also their sustainability performance in relation to specific equity indexes. This paper's analysis demonstrates that ESG scores for religious funds outperform the three selected socially responsible benchmarks, while only a part of the funds had higher risk-adjusted returns over a long-term period.