The Performance of Faith-based Mutual Funds: A Matched-Pair Approach

Abstract

Using a matched-pair approach, this study investigates the performance of faith-based mutual funds in the United States from 2007 to 2015. It finds that faith-based funds do not systematically underperform similar secular SRI or conventional funds. Faith-based funds tend to be small and share with similarlysized conventional funds the challenge of attaining sufficient size to fully exploit economies of scale in investing. Given the high growth potential for faith-based investing on a global level, it is possible that this handicap might disappear.