Faith-Based Investing Reaches USD169bn but Lags Mainstream Funds, Says Morningstar

The global faith-based investing market has grown to approximately USD169bn across 853 investment strategies, but these funds continue to trail conventional products in diversification, costs and long-term performance, according to Morningstar.

As of 30 April 2026, Morningstar found that faith-based passive funds charged roughly twice the average asset-weighted fees of comparable conventional products, largely because of limited competition and fewer passive investment options.

Product availability remained particularly limited for Christian and Catholic investors, with most funds concentrated in broad equity strategies.

Religious screening also created distinct portfolio characteristics. Shariah-compliant funds maintained lower exposure to financial stocks while allocating more heavily to technology companies, whereas Christian-focused funds generally held less exposure to healthcare businesses.

Although faith-based funds underperformed comparable nonreligious strategies by around 1% annually on average, Morningstar noted that Shariah strategies had benefited in recent years from strong technology sector performance.

The report suggests growing opportunities for asset managers to develop more diversified and competitively priced faith-based investing products as demand continues to broaden globally.