Interest in Bonds for the Faith-Based Investor

This is an important framework when considering not just what we want to invest in, but what we are proud to own and profit from. This makes sense as an equities-focused asset manager.

But how does that translate to fixed income (i.e., bonds, which are simply a form of debt)? In a technical sense, fixed income is not ownership, yet the financial system cannot function without debt.

Instead, we prefer to think of bonds through another angle. “Investing that makes the world rejoice®” is notably about what we do invest in rather than just what we avoid (to be clear, we still apply our screens consistently to fixed income investments). Bonds sometimes allow investors to fund specific parts of an entity, rather than the entity in total. Fixed income is therefore a large corner of capital markets where investing as a blessing is particularly apparent.

Investing in debt comes with some nuanced differences compared to equities. There are times when we are willing to invest in special purpose bonds, for example, from companies with whom we don’t typically invest. Even if we don’t want to own the stock, we do want to invest in their impact projects which genuinely underwrite human flourishing and are not tied to general business operations. As another illustration, owning a city’s municipal bond which funds a regional hospital does not mean the investor is inherently endorsing local politics.

With our invested assets, either stocks or bonds, we can bring blessing and good to the world and believe screening in, rather than just out, is a powerful way to accomplish this goal.

For additional breakdowns, see our Balanced and Core Bond Strategies.