Since 1994, an intricate screening process has been an integral part of the Timothy Plan family of biblically based mutual funds. With humble beginnings and not many technological advances to help the initiative at the outset, over the years Timothy Plan’s screening process has changed and improved, and sources for research increased with the accessibility of the internet.
Timothy Plan screens were originally managed by an in-house team of researchers, which allowed research results to be reflected in real time. Once the word got out about this huge step forward, financial advisers began clamoring for the research to be made public.
In 2011, the Institute for Corporate Securities Research Inc. (ICSRI), which by then had assumed the responsibility for the research, joined forces with eVALUEator, LLC, a company that screens mutual fund holdings, and made its equities research available to eVALUEator subscribers through the iNVESTigate tool. Today, the Biblically Responsible Investing (BRI) movement has expanded and is utilized by money management firms nationwide who use this tool to screen holdings.
Back in 1994, Timothy Plan founder Art Ally pioneered the first pro-life, pro-family screening standard. Timothy Plan’s commitment is first to the Lord, and it will not invest a single penny with any company violating the screens. These screens were created based on the following core beliefs:
We believe our bodies and the lives we lead are gifts from our Creator. A healthy biblical lifestyle is a life free from addiction, participation in activities posing potential harm to ourselves or others, and sexual impropriety. Alternatively, a healthy biblical lifestyle protects the sanctity of marriage and sexuality, promotes care of our bodies, assists those who struggle with substance abuse, and strives to promote social justice and equality for our most vulnerable.
We understand the screens we choose to focus on may not appeal to everyone. And some may even find them controversial. All of our screens are based on how scripture instructs us to live. Our purpose is not to judge the person, but to avoid the actions that cause His people to stumble. Our hope is that no matter one’s views, one can respect our desire to please the Lord in all we do and say.
Over the years, the screens have grown and adapted to the culture. Currently, these screens consist of five cultural screens and three social screens having multiple subcategories. Companies with one or more violations are removed as an investment option. This information is actively updated and communicated to the Timothy Plan fund managers for compliance and accountability.
Each fund is spot-checked to determine whether a company in the portfolio has recently engaged in an activity violating the screens. Timothy Plan has a strict policy on any company violating the screens; in other words, if any company currently owned is determined to be in violation, it is liquidated as soon as practicable, keeping, of course, the interests of shareholders as the primary concern.
LIFE | ABORTION: Life is a precious gift from God—even from the moment of conception. This screen seeks to protect the life of the unborn by screening out companies involved in the abortion industry. Two examples are fetal tissue research and the manufacturing and distribution of abortifacients.
PURITY | PORNOGRAPHY: Our culture has exchanged true beauty and sexuality for the lust of the eyes and impurity—and seeks to make it a commodity. This screen identifies companies engaged in the promotion of adult themes through advertisements, media, games, stores, establishments, publications and the internet.
FAMILY | ENTERTAINMENT: Families are the foundation of our culture, and the values we instill need to be preserved. This screen identifies companies engaged in anti-family entertainment through the promotion of violence, language, sex and drugs through advertisements, media, games, stores, establishments and publications.
MARRIAGE | LIFESTYLE: Marriage is holy—instituted by God. This screen filters to recognize companies that affirm the marriage covenant, a sacred bond between a man and a woman instituted by and publicly entered into before God.
LIBERTY | RIGHTS: We are endowed by our Creator with certain inalienable rights—life, liberty and the pursuit of happiness. These rights are removed from many people across the world. This screen identifies companies that are involved in human oppression, human trafficking, slave labor, terrorism, and Christian persecution.
STEWARDSHIP | GAMBLING: We are called to be wise stewards with all that God has given us—not as ones who gamble away our money or bring ourselves to ruin. This screen identifies gambling related activities, including equipment manufacturers, casinos, riverboats, cruise lines, racetracks and gambling software.
LONGEVITY | TOBACCO: Known as a silent killer and a common cause of lung cancer, Timothy Plan does not invest in companies that manufacture tobacco. This screen identifies manufacturers of cigarettes, cigars, smokeless tobacco products, tobacco leaf distributors and marketers and tobacco-specific retail stores.
SOBRIETY | ALCOHOL: Alcohol addiction hurts and destroys children and families; therefore, Timothy Plan does not invest in companies that manufacture alcohol. This screen identifies companies that enable these abuses, including brewers, distillers, microbrewers and winemakers.
eVALUEator has been an essential tool to ensure Timothy Plan funds stay clean. As of 2019, other investment firms are also using this service to help screen their investments, along with several foundations.
“There were some funds screened for alcohol, tobacco, and gambling, but that was it,” recalled Dave Hart, who runs eVALUEator. Ally had met with a financial advisor who had the vision to create a software program comparing screens based on American values against mutual fund holdings. The reports generated a transparent view of the violation of the underlying holdings of mutual funds. Timothy Partners collaborated with eVALUEator by providing their research to expand the software to include Timothy Plan’s biblical screens.
“The original owner decided to sell eVALUEator to Timothy Partners,” Dave continued. “Knowing the potential positive impact it could have on the investment industry, Art asked three of our original partners about buying eVALUEator.”
Over the years, there has been heavy investment into upgrading the software into the very sophisticated model it is today. eVALUEator uses Morningstar as its fund data provider. The process of importing mutual funds, ETFs, bond funds and variable annuities is accomplished using a complex, custom-coded, autonomous importer built into eVALUEator and was redesigned by professional software developer.
The screening research company, ICSRI, manages over 37,800 companies. During an average update, over 555,000 holdings have to be filtered into 37,800 parent companies. Without this procedure, it would be impossible to accurately show the percentage of violations or the amount of assets each fund might have. To complicate things further, many investment funds contain other funds within their holdings, which also hold multiple securities.
Let us look at an example of one complexity both eVALUEator and ICSRI successfully solve daily.
- 21st Century Fox America has over 40 different publicly traded bond offerings, held across numerous funds.
- Although a privately owned company, 21st Century Fox America is a subsidiary of publicly traded Walt Disney Co.
- These securities must all be linked to symbol DIS—The Walt Disney Co.
Every 90 days, eVALUEator imports information from market data researcher Morningstar, Inc. and cross-checks the holdings against the ICSRI research. When a new holding is discovered, ICSRI checks to see if any screen violations are found.
Knowing What You Own
Whether you are new to the faith or are mature in your Christian walk, selecting a mutual fund should be about more than its rate of return—it should also complement your faith. Until the creation of eVALUEator, it was difficult for individuals to know how to align their investments with their values. Viewing a screen report of a mutual fund can be an eye-opening experience. Christians work hard to abstain from sin in areas encountered daily. Parents are generally on guard to protect children from the impact of the culture.
It is easy to lose sight of the bigger picture when it comes to investing. Tobacco companies pay high dividends to shareholders, and yet return no redeemable value to society. Once viewed, an eVALUEator report cannot be placed back in a box. It has a way of exposing personal idols, particularly when it comes to money and stewardship.
Do you know what you own?
(Robert Knight is a writer for Timothy Partners, Ltd. He is a regular weekly columnist for The Washington Times and Townhall.com and is frequently published by American Thinker, The Daily Caller, OneNewsNow and others. His latest book is “A Nation Worth Fighting For: 10 Steps to Restore Freedom.”)