Faith-Based Investing Beyond Mutual Funds

For many investors, faith-based investing begins with screening mutual funds. Certain industries are excluded. Certain companies are avoided. It is a meaningful starting point.

As portfolios grow and financial goals become more layered, screening alone may not fully reflect one’s convictions or opportunities.

At Stonecrop, we believe that faith-based investing is not just about avoiding what conflicts with your values. It may also involve thoughtfully pursuing what aligns with them.

When Standard Solutions May Not Be Enough

Mutual funds offer diversification and simplicity. However, they also limit customization. Investors with more complex balance sheets or tax considerations may find that pooled vehicles do not provide the flexibility they need.

For example:

• A fund may contain companies that conflict with personal convictions despite broad screening.

• Gains inside a fund may create tax consequences outside of your control.

• Allocation decisions may not reflect your specific income needs or long-term legacy - objectives.

As portfolios evolve, more tailored approaches may become appropriate.

The Role of Direct Indexing

Direct indexing allows investors to own individual securities that mirror a broader index while applying customized screens and adjustments. This structure may allow for:

• More precise faith-based exclusions

• Greater tax management through selective harvesting

• Intentional tilting toward companies that align with personal values

We believe that this level of customization may help investors express conviction more clearly through their portfolios.

Exploring Private Market Opportunities

Public markets are only one part of the investment landscape. Certain private investments may provide additional diversification or access to areas not available through traditional funds.

These opportunities may include:

• Private equity investments

• Private credit strategies

• Direct investments in operating businesses

• Faith-aligned enterprises seeking capital

Private investments involve unique risks and considerations. They are not appropriate for every situation. For some, they may serve as part of a broader, well-coordinated strategy.

Conviction Requires Coordination

As investment tools become more sophisticated, so does the need for alignment. Faith-based investing at this level requires thoughtful coordination between tax planning, estate strategy, liquidity needs, and long-term goals.

We believe that investment strategy should reflect both financial objectives and spiritual convictions. That alignment becomes increasingly important as assets grow and responsibilities expand.

How Stonecrop May Help

Faith-based investing may look different at different stages of life. Whether you are beginning with screened funds or exploring more customized strategies, we help clients design portfolios that reflect both discipline and conviction.

If you would like to explore how your investments may more fully align with your faith and long-term objectives, contact us at info@stonecropadvisors.com.