Funds Group: Inspire Funds
Management Company: CWM Advisors, LLC
Funds Affected: Inspire Global Hope Large Cap ETF
Principal Sustainable Investing Strategies: Values-Based Investing, Exclusions, Impact
The fund generally will invest at least 80% of its total assets in the component securities of the Inspire Global Hope Large Cap Index (the “Index”). The index provider selects foreign (including emerging markets) and domestic large capitalization equity securities included in the Russell 1,000 Index, MSCI EAFE Index, and MSCI Emerging Markets Large Cap Index using the index score to a particular security based on the security’s alignment with biblical values and the positive impact that company has on the world through various environmental, social and governance criterion.
The methodology removes from the investment universe the securities of any company that has any degree of participation in activities that do not align with biblical values, which are:
- the LGBT lifestyle; and
- rights violations such as association with or doing business in terrorist sponsoring countries, countries having oppressive systems of government, and countries where there are known human rights violations related to the persecution or severe discrimination against Christians, and poor labor practices
The methodology then assigns a positive score based on whether the company has publically available policies and procedures regarding involvement in activities that align with biblical values in the following categories:
- Products and services (curing or treating disease; enhancing educational opportunities; providing food, water, shelter, clothing and sanitation for the poor and marginalized; and, providing Christian-themed products or services);
- Workplace (encouraging more time with family; providing above average compensation when compared to industry peers; providing above average employee benefit packages when compared to industry peers; and providing a safe and healthy workplace environment);
- Community (benefit the communities in which they do business through philanthropy and volunteerism); and
- Environment (protect and preserve the environment).
The index provider uses software that analyzes publicly available data relating to the primary business activities, products and services, philanthropy, legal activities, policies and practices when assigning Inspire Impact Scores to a company. The 400 securities with the highest Inspire Impact Scores are included in the index and are equally weighted. The index will typically be comprised of 50% domestic securities, 40% in developed foreign securities, and 10% in emerging market securities. The Inspire impact scores of the securities in the index are reviewed periodically (at least annually), and the index is rebalanced quarterly. If, upon review, the Inspire impact score of a security falls below an acceptable level, the security is removed from the index and replaced with a higher scoring security.