Investment fund looks for firms with Christian values

Three years ago, David Lenoir started doing some soul searching - professional and personal.

He and partner Jack Ross were at Wachovia Securities, working with folks on their investments. They had left First Mercantile Trust Co., a firm built by Lenoir's father and brother, in 2002 so they could concentrate on individuals -- the firm, now part of SunTrust Banks, deals mostly with benefit plans for companies.

Two years later, Lenoir, 39, turned to his faith.

"I felt Christians were called to be different," he said. "I realized there was a disconnect between the way Christians believe and how they invest their money."

To remedy that, Lenoir started a mutual fund that screens companies based on Christian values.

His Centurion Christian Values Fund opened March 30.

Such funds fall into the general category of socially responsible investments, said David Kathman, who follows such funds for Morningstar, an independent investment research firm in Chicago.

Religious funds are growing faster overall than other social funds, he said.

Among those similar to Centurion are The Timothy Plan, a nondenominational evangelical Christian fund, and the five Ave Maria funds, which screen investments based on Catholic principles, Kathman said.

Lenior got his inspiration from another religious fund -- the Amana Growth Fund. The 13-year portfolio bases its investments on Muslim principles.

Over the 10 years ended April 30, that fund produced total return of 13.2 percent a year, in the top 1 percent of the 484 large growth funds in that group, according to Morningstar.

"It has all the characteristics that if I was your financial adviser, I'd put it in front of you," Lenoir said. "What I took away from this is you can screen and you can perform."

Lenior started his twofold screening - exclusion and inclusion - with about 3,000 companies. He and his board of advisers eliminated firms that made money from or condoned abortions - from making devices used in the procedure to contributing to Planned Parenthood - as well as firms that dealt in pornography and companies that support the "gay and lesbian agenda," Lenoir explained.

The fund also has a "minimize" screen for companies such as tobacco and alcohol producers or casino operators -activities that fall more into the behavioral sin category.

"Alcohol is not a sin, drunkenness is," Lenoir said. "Gambling is entertainment for some people, but a real problem for others."

If a company brings in more than 20 percent of its revenues from such ventures, Centurion won't buy it.

Lenior prefers to emphasize the positive screens.

He looks for companies that treat employees well, promote diversity from the board room to the front lines, support human rights and have high environmental standards - "how they are on what God created," Lenoir explained.

That positive spin sets Centurion apart from other religious-based funds that are more "fire and brimstone" in their public posture toward screened-out companies, Kathman said.

The screens left about 2,500 investment possibilities, which Lenoir turned over to fund manager William Gurner, president of Sector Capital Management of Germantown.

"His job is to tell us what to own," Gurner said. "My job is to make money."

The religious standards created a problem, he said.

The original plan for the fund was to invest in companies with market values of $5 billion or more, but the screens filtered out 250 of the nation's 500 largest firms, he said. So Gurner reduced the minimum threshold to $1 billion to find enough prospects to fill the fund.

As of May 31, the fund had shares in 48 companies, with Memphis-based FedEx Corp. the second-largest holding.

While the focus may be on the screens, Kathman said, making money "really depends on the manager.

"Over short periods, they certainly do (produce returns) depending on what the market is like," he said. "Over the long stretch, I don't know of any evidence that they do better or worse than any SRI (socially responsible investment) funds."


Founder and manager: David Lenoir

Portfolio manager: William Gurner, Sector Capital Management

Opened: March 30, 2007

Assets: About $2 million

Holdings: Shares of 48 companies

Return: 5.7 percent from March 30-June 29