--Hillary Jackson

Faithshares plans to launch international versions of some of its five faith-based exchange-traded funds and also is considering expanding its lineup to include additional faiths, Faithshares president Thompson Phillips told FA in an interview. He said he hoped to have the Faithshares Catholic International Values Fund and Faithshares Christian International Values Fund up and running before year's end.

"Our intent is definitely to have to have international [ETFs]...We'll see how the first five do and launch more hopefully later this year," Phillips said. As for additional faiths, such as Presbyterian, Episcopalian, Mormon, Jewish and others, he said the determination to launch would be based on whether there was demand among investors and whether an individual fund would make sense economically and from a business standpoint. Phillips underscored that Faithshares is in the exploratory phase and has no immediate plans to launch additional U.S. ETFs.

Faithshares filed plans with the Securities and Exchange Commission a year ago to launch the first ever faith-based ETFs ( FA, 2/20/2009 ). The Oklahoma City-based firm's Catholic Values Fund, Christian Values Fund, Methodist Values Fund, Baptist Values Fund and Lutheran Values Fund began trading in December. Phillips said all five are outperforming the S&P 500 Index, with the Catholic fund performing the best. He said the firm aims to have $30 million in each of the five funds by the end of the year, but would not disclose how much each currently has in assets. Morningstar lists each as having between $2.6 million and $2.7 million.

All five ETFs avoid investing in companies that do business in alcohol, tobacco, gambling, pornography and weaponry, but each has its own set of guidelines regarding the specific types of investments it can make, Phillips explained. They are benchmarked against indices created by FTSE/KLD and rebalanced annually in July.