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By Lara Crigger

I admit it: When I saw the news last week about FaithShares launching two brand-new Christian-themed ETFs, I did a bit of a double take.

On Dec. 15, FaithShares added a Baptist Values Fund (FZB) and a Lutheran Values Fund (FKL) to its religiously themed lineup, which already included a Catholic ETF (FCV), a Methodist ETF (FMV) and a general Christian Values ETF (FOC).

Although the portfolios all possess very similar holdings—there's about 70 percent overlap between the five funds—they do offer subtle differences that sync with the specific denominations' moral restrictions. For example, the Baptist fund avoids companies that sell or process alcohol, while the Catholic fund excludes companies involved in the production of firearms and military weapons.

I've nothing against the idea of making a stand with one's wallet (in fact, as investors, isn't that what we do every day?). And for morally conscious investors, FaithShares' ETFs do offer unparalleled convenience.

But FaithShares also charges a pretty penny for the privilege of investing according to one's moral compass: Their Christian-based ETFs charge a 0.87 percent expense ratio, which makes them one of the most expensive ETFs on the market. (It should be noted, however, that each fund does donate 10 percent of its net income back to a denomination-specific charity.)

So far, religiously themed ETFs have yet to prove themselves more than just a neat PR gimmick. Investors might say they want morally themed funds, but so far, the one such fund available for any length of time has failed to attract many investment dollars.

That would be the JETS Dow Jones Islamic Market International Index Fund (JVS); since its launch last July, it had only attracted $14 million in assets by Nov. 30, 2009. The fund, which focuses on Shariah-law-compliant businesses and sectors, barely scrapes by with an average daily trading volume around 500 shares. Ouch.

At the same time, I think the idea of investing with a conscience is here to stay, particularly given the interest investors have shown in other "socially responsible" options.

The iShares FTSE KLD Select Social Index Fund (KLD), for example, focuses on companies that exhibit "positive Environmental, Social and Governance performance relative to their industry and sector peers." Although average volume in the fund still lags around 9,000, since its inception in 2005 the fund has attracted $120 million in assets.

And if you consider "green" ETFs as an arm of socially responsible investing, you can't help but notice the PowerShares WilderHill Clean Energy Portfolio (PBW), which hones in on companies that focus on greener, renewable energy sources and technologies. As of Nov. 30, 2009, the fund has attracted $721 million in assets, with an average trading volume around 427,000.

It just goes to show: When it comes to the market, nothing speaks louder than green.

We’ll have an in-depth feature article on socially responsible investing on IndexUniverse.com later this week, giving you the full rundown of available options.

For now, though, while I’m pleased to see the rollout of additional choices like the FaithShares ETFs, I wish they’d show a bit more charity and lower those fees.

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Source: The New FaithShares ETFs: Investing with Conviction, But at a Price