Christian investing and conventional investing chase the same goal—growing your money—but they disagree on the rules. Conventional investing optimizes for return and risk alone. Christian investing adds a third filter: whether a company’s actual business honors God. That extra screen costs you a little in fees, removes some stocks from the menu, and—contrary to the usual warning—narrows your returns far less than most people fear.
If you’ve been told that putting your faith into your portfolio means accepting worse performance, the data deserves a closer look. The honest answer is more interesting than either side admits.
Two strategies, one goal, different rulebooks
Conventional investing is morally neutral by design. A standard S&P 500 index fund owns all 500 companies because they are the 500 largest, full stop. Whether a firm runs casinos, publishes pornography, or manufactures abortifacients never enters the math. The fund manager’s only job is to track the index and keep costs low. That single-minded focus is exactly why fees on funds like Vanguard’s VOO sit near 0.03 percent—about three dollars a year on every ten thousand invested.
Christian investing keeps the return objective but refuses to treat ownership as morally weightless. When you buy a share, you own a sliver of that company’s work in the world. Scripture treats that ownership seriously: “The earth is the LORD’s, and everything in it” (Psalm 24:1). If everything is God’s and you’re a steward of His capital, then where that capital goes is a spiritual question, not just a financial one. This is the heart of what Christian investing actually is, and it splits into several flavors worth knowing before you commit—see the main types of Christian investing for the full map.
What gets screened out
The practical difference shows up in the holdings. Conventional funds own everything; Christian funds apply negative screens that exclude companies deriving meaningful revenue from activities believers object to. The usual exclusion list looks like this:
| Screened category | Why it’s excluded | Conventional fund? |
|---|---|---|
| Abortion & abortifacients | Sanctity of life (Psalm 139:13) | Usually held |
| Pornography & adult entertainment | Sexual purity, human dignity | Usually held |
| Gambling operators | Exploitation of the vulnerable | Usually held |
| Predatory lending | Usury, justice for the poor | Usually held |
| Tobacco & recreational cannabis | Stewardship of the body | Usually held |
Most faith-based funds layer positive screening on top of these exclusions—actively tilting toward companies that treat employees well, run honest accounting, and create genuine value. If you want the mechanics of how each filter works, the guide to sin stocks and screening breaks down the revenue thresholds funds actually use.
The performance question, answered with real numbers
Here’s where the fear lives: skip the “sin” stocks and you’ll trail the market. The evidence says the gap is real but small. The S&P 500 Catholic Values Index is the cleanest test we have—it takes the regular S&P 500 and removes companies tied to abortion, contraception, certain weapons, and similar concerns. Over the decade from 2014 to 2024, that screened index returned roughly 11.2 percent annually versus about 12.1 percent for the unscreened S&P 500.
That 0.9-point yearly difference is not nothing over thirty years. But notice what it isn’t: it’s not the 3 or 4 points of “morality tax” critics imply. And in plenty of individual years the screened index won, because excluding tobacco and gambling also means dodging some of their drawdowns. FTSE Russell’s FTSE4Good index, which uses comparable ethical screens, has likewise tracked the broad market closely rather than collapsing beneath it. The realistic takeaway: you may give up a modest amount of return, you may not, and the dispersion swamps the average. For the fuller picture of when faith-screened portfolios lead and lag, see the honest risks of Christian investing.
One more wrinkle worth naming: the screened index’s lag came almost entirely from a few years when excluded names—big tobacco, certain mega-cap holdings—happened to surge. Strip those windows out and the two lines are nearly indistinguishable. That’s the nature of screening: you trade a little upside in the years the “sin” sectors rip for a smoother ride and a clear conscience the rest of the time.
Fees are where the gap is widest
The bigger drag historically wasn’t screening—it was cost. Faith-based funds used to charge 0.75 to 1.25 percent a year while conventional index funds charged 0.03 to 0.20 percent. Run that forward and it compounds into real money. Take $100,000 invested for 30 years at 8 percent gross returns:
| Fund type | Annual fee | Ending value |
|---|---|---|
| Conventional index | 0.10% | ~$1,006,000 |
| Older faith fund | 0.75% | ~$870,000 |
| Today’s competitive faith ETF | 0.40% | ~$928,000 |
At the old 0.75 percent, the fee gap alone cost about $136,000—more than the screening ever would. But that 1.25-percent world is fading. The Inspire 100 ETF (ticker BIBL) charges around 0.35 percent; Timothy Plan’s US large-cap ETFs run near 0.50 percent. Pick a low-cost biblically responsible fund and the cost gap shrinks to a rounding error you’ll happily pay for a clear conscience. The roundup of the best Christian ETFs compares current expense ratios side by side.
Where Christian funds quietly win
Two advantages rarely make the brochure. First, quality screening tends to filter out exactly the kinds of businesses that blow up—heavily indebted operators, accounting-fraud risks, companies built on addiction. Eliminating tail risk can improve risk-adjusted returns even when raw returns lag. A portfolio earning 11 percent with low volatility beats one earning 12 percent with wild swings, because you’re far likelier to stay invested through the rough patches.
Second, you actually behave better. Investors who believe in what they own panic-sell less. That behavioral edge—staying put in 2020 or 2022 instead of bailing at the bottom—is worth more to most people’s results than any expense-ratio decimal. Funds like Eventide and the Timothy Plan lean hard into this thesis, marketing their screens as a feature, not a sacrifice.
Do you sacrifice diversification?
A fair worry: if you’re excluding whole sectors, aren’t you crowding your money into fewer baskets? A decade ago, maybe—the faith-based menu was thin. Today it’s broad enough to build a complete portfolio without compromise. You can cover US large caps with the Inspire 100 ETF (BIBL) or Timothy Plan’s US Large Cap Core ETF (TPLC), add small and mid caps, reach overseas with the Inspire International ETF (WWJD), and hold screened bond funds for ballast—then finish with REITs and cash. The names you’re actually dropping (tobacco, gambling operators, a short list of others) make up a small slice of the total market, so a screened portfolio still captures the overwhelming majority of its breadth and sector exposure. Where a category genuinely lacks a faith-based option, you either wait for one, hold a conventional fund as a temporary placeholder, or address the concern through ownership rather than exclusion. Putting the pieces together deliberately is the whole point of our guide to the best BRI ETFs.
Who should choose which
Conventional investing makes sense if your overriding priority is the absolute lowest cost and the broadest possible diversification, and you’d rather handle moral concerns through giving and shareholder action than through your fund menu. Christian investing makes sense if owning abortion providers or payday lenders genuinely troubles you, and a fraction of a percent in return is a price you’ll gladly pay to invest with integrity. For many believers the right answer is a blend: a low-cost screened core fund, plus a few conventional holdings where no faith-screened equivalent exists yet. If you’re weighing the trade honestly, the benefits of Christian investing and the common myths worth retiring are both worth reading before you decide.
Switching without a tax headache
If you’re moving from a conventional portfolio, do it smartly. Inside a 401(k) or IRA you can sell and rebuy freely—no tax consequence. In a taxable brokerage account, selling appreciated funds triggers capital gains, so transition gradually: redirect new contributions into faith-based funds first, harvest losses where you have them, and sell winners across two tax years to spread the bill. There’s no virtue in overpaying the IRS to make the switch a month sooner.
Frequently asked questions
Does Christian investing really underperform the market?
Modestly, on average, and not always. The S&P 500 Catholic Values Index trailed the standard index by roughly 0.9 points annually over 2014–2024. In low-fee form, with the screening’s tail-risk benefits, the real-world gap for a disciplined investor is often negligible—and some years it reverses.
Are Christian funds more expensive than index funds?
They used to be, sharply. Today the gap has narrowed. Several biblically responsible ETFs charge 0.35 to 0.55 percent versus roughly 0.03 to 0.10 percent for plain index funds. That difference is small enough that fees should no longer be the reason you avoid faith-based investing.
Can I just buy a regular index fund and tithe more?
You can, and some thoughtful believers do exactly that, treating screening and giving as separate questions. Others find it incoherent to profit from a business on Monday and pray against its harm on Sunday. Scripture doesn’t settle it for you—conscience does. Both paths can be faithful.