For many church treasurers and charity trustees, the question of how to invest reserves is accompanied by a deeper anxiety: can we invest in a way that reflects our values without sacrificing the returns our organisation needs? It is a fair concern, and in 2026 it deserves a direct answer.
The short answer is yes. Christian investment funds are not a niche compromise. For UK churches and charities, they represent a financially sound, legally supported, and missionally coherent approach to long-term stewardship.
This guide examines what Christian investment funds actually are, how they perform, what the regulatory landscape looks like for charity trustees, and why a specialist manager with deep faith-sector expertise is the right choice for organisations that take both their finances and their values seriously.
Key takeaways for trustees:
- The Charity Commission's CC14 guidance explicitly supports responsible investment aligned with a charity's values
- The 2022 Butler-Sloss ruling confirmed trustees can prioritise ethical considerations even where this may affect returns
- Epworth Investment Management, part of the Methodist Church's Central Finance Board, manages around £1.3bn in assets exclusively for UK churches and charities
- Christian investment funds offer negative screening, positive alignment, and active stewardship; not just exclusions
- Minimum investment in Epworth's Multi-Asset Fund starts at £1,000, making it accessible to organisations of all sizes
What Are Christian Investment Funds?
Christian investment funds are pooled investment vehicles that apply faith-based criteria to how capital is deployed. They go considerably further than simply avoiding a handful of controversial sectors. A properly constructed Christian fund operates on three distinct levels.
Negative Screening (Exclusions)
This is the layer most people are familiar with: refusing to invest in companies whose activities conflict with Christian values. Common exclusions include:
- Fossil fuel extraction and production
- Tobacco manufacturing and distribution
- Gambling and adult entertainment
- Weapons systems and controversial armaments
- Payday and high-interest lending
- Companies with documented severe human rights abuses
Positive Alignment
Beyond exclusions, credible Christian funds actively seek companies that contribute positively to society. This means directing capital towards businesses that support health, education, affordable housing, human rights, and corporate integrity. It is a distinction that matters: a fund that merely avoids harm is not the same as one that actively pursues good.
Active Stewardship
The third dimension is engagement. Christian fund managers use their position as shareholders to challenge poor practice, vote on governance resolutions, and push companies to improve. This is not passive ownership; it is an expression of the same accountability and care that underpins Christian ethics in every other sphere of life.
The practical implication for trustees: when you invest in a Christian fund, you are not simply parking reserves in a filtered index. You are participating in an active, values-driven approach to ownership that reflects your organisation's purpose.
The Legal Position for UK Charity Trustees
One of the most persistent barriers to faith-aligned investing has been a misreading of trustee duties. Many trustees have historically assumed they face an overriding legal obligation to maximise financial returns, regardless of ethical considerations. The regulatory position in 2026 is unambiguous: that assumption is wrong.
The Charity Commission's CC14 Guidance
The Charity Commission's CC14 guidance on charity investment makes clear that trustees have the discretion to adopt a responsible investment approach. The guidance explicitly recognises:
- Negative screening (avoiding sectors that conflict with a charity's values)
- Positive screening (directing investment towards mission-aligned sectors)
- Stakeholder engagement (using shareholder rights to influence company behaviour)
The Commission's updated guidance was designed specifically to give trustees confidence that responsible investment is not only permissible but, in many circumstances, the right approach for their organisation.
The Butler-Sloss Ruling (2022)
The landmark 2022 Butler-Sloss case provided further legal clarity. The ruling confirmed that charity trustees can prioritise ethical considerations in their investment decisions, even where this may result in accepting potentially lower financial returns, provided the decision aligns with the charity's objectives and purpose.
For a church or faith-based charity, this is highly significant. It means that investing in a way that reflects Christian values is not a breach of duty; it is an exercise of it.
What this means in practice: Trustees of UK churches and charities are not just permitted to choose a Christian investment fund. In many cases, given their organisation's stated purpose and values, they may have good grounds to conclude it is the most appropriate choice available.
Do Christian Investment Funds Perform?
This is the question that sits at the heart of every trustee conversation about ethical investing. The honest answer requires nuance, because the performance picture in 2025 was more complex than either critics or advocates of ethical investing would like to admit.
The Broader ESG Context
According to FE fundinfo data, the average ethical and sustainable fund in the UK returned 10.3% in 2025, compared with 12.2% for the average conventional peer: an underperformance of 1.9 percentage points. The primary reason was sectoral, not structural. ESG-screened funds typically exclude traditional energy, defence, and commodities, all of which delivered some of the market's strongest returns in 2025 as geopolitical pressures drove demand. This was a specific, identifiable headwind, not evidence that ethical investing is inherently less profitable.
The critical context: there are currently 1,120 funds in the Investment Association universe that describe themselves as ethical or sustainable, representing over 20% of all IA funds. The category is not fringe; it is mainstream.
The Long-Term Case
Short-term performance comparisons miss the point for most churches and charities, whose investment horizon is measured in decades, not quarters. The long-term argument for values-aligned investing rests on several structural factors:
- Companies with strong governance and ethical practices tend to carry lower regulatory and reputational risk
- Sectors facing structural decline (fossil fuels, tobacco) carry long-term stranded asset risk that screened funds avoid
- The Charity Finance Fund Management Survey 2024 found that 38% of charities expected to increase their ESG-screened allocation in the next 12 months, with only 2% planning to reduce it
Epworth Investment Management Ltd (“Epworth”)'s Own Performance Data
Epworth's funds provide a concrete reference point. The WS Epworth Investment Funds for Charities annual report (to 31 December 2024) shows:
| Fund | 12-Month Return | 3-Year Return (p.a.) | 5-Year Return (p.a.) |
| UK Equity Fund | 8.22% | 1.81% | 3.47% |
| Multi-Asset Fund | Meets 5-year RHP objective | Rated Green | 4.62% total over RHP |
| Cash Plus Fund | 4.2% | 4.6% | 3.0% |
The Multi-Asset Fund achieved a total return of 4.62% over its five-year recommended holding period, meeting its investment objective and receiving a Green rating for investment performance. For the Cash Plus Fund, the five-year annualised return of 3.0% reflects a period that included historically low interest rates; the current rate of 3.67% A.E.R. is considerably more competitive.
The conclusion is clear: Christian investment funds, managed with genuine expertise, can deliver returns that meet the financial objectives of most churches and charities, while removing the reputational and mission-alignment risks that come with conventional investing.
Why Specialist Matters: The Case for Epworth
Not all Christian investment funds are equal, and not all ethical fund managers understand the specific needs of UK churches and charities. This is where specialist expertise makes a material difference.
Epworth Investment Management has been managing investments for UK churches and charities for decades, operating as part of the Methodist Church's Central Finance Board with approximately £1.3bn in assets under management. Crucially, Epworth works exclusively with UK registered charities and faith-based organisations. This is not a sideline; it is the entire business.
What Epworth Offers
Epworth's full range of services is designed specifically around the governance, reporting, and ethical requirements of charities. The three core offerings are:
1. The WS Epworth Multi-Asset Fund (MAF) An all-in-one, diversified fund combining equities, bonds, property, alternatives, and cash within a single ethically screened portfolio. Available to any UK registered charity with a minimum investment of £1,000. The fund is structured to comply with Charity Commission expectations and includes built-in governance reporting for trustees.
2. Discretionary Service for Charities (DSC) A bespoke investment management service where Epworth constructs and actively manages portfolios tailored to each organisation's specific objectives, risk tolerance, and ethical mandate. Sub-accounts can be created for individual congregations, departments, or restricted funds under a single relationship. This is the appropriate choice for larger charities or denominations managing reserves across multiple entities.
3. The Epworth Cash Plus Fund A Common Deposit Fund for liquid reserves, currently offering 3.67% A.E.R. (inclusive of the management fee of 0.25% + VAT). It provides same-day access to deposits, daily interest calculation, and a secure online portal for trustees to monitor balances. The fund has operated since November 2006 and has never incurred a capital loss.
Ethics Embedded, Not Overlaid
A critical distinction with Epworth is that ethical screening is not a filter applied to an otherwise conventional investment process. It is embedded at every stage. The team applies rigorous exclusion thresholds to sectors including fossil fuel extraction, tobacco, gambling, adult entertainment, weapons systems, and payday lending. Beyond exclusions, positive alignment criteria direct capital towards companies that support health, education, affordable housing, and human rights.
Epworth also engages actively with companies on governance and ESG issues, using its position as a shareholder to drive change rather than simply divesting and walking away.
The Christian Aid Partnership
When you invest in the Epworth Multi-Asset Fund, 50% of the management fee is donated to Christian Aid's In Their Lifetime project, which works to tackle poverty, inequality, and injustice. For faith-based organisations, this means the act of investing itself contributes to mission, not just the returns it generates.
Common Objections, Addressed Honestly
Trustees considering a move to Christian investment funds will encounter a predictable set of objections, often from advisers or colleagues who have not examined the evidence closely. Here is a direct response to the most common ones.
"We'll sacrifice too much return"
The performance data does not support this as a blanket conclusion. As the Epworth fund data shows, well-managed Christian funds can meet their stated investment objectives over a five-year horizon. The 2025 underperformance of the broader ethical fund category was driven by a specific set of market conditions (strong defence and energy sectors) that are not permanent structural features of the market. Over a 10 to 20-year horizon, the risk profile of excluded sectors often looks less attractive, not more.
"It's too restrictive for a diversified portfolio"
The WS Epworth Multi-Asset Fund invests across equities, bonds, property, alternatives, and cash. Diversification is built in. The ethical screening narrows the universe of eligible investments but does not prevent a well-balanced, multi-asset approach. The fund's recommended holding period is five years, consistent with standard multi-asset investment guidance.
"Our trustees don't have the expertise to oversee this"
This is precisely why a specialist discretionary manager exists. Under Epworth's Discretionary Service for Charities, trustees delegate day-to-day investment decisions to Epworth's team while retaining oversight of the investment policy. This is consistent with the Charity Commission's CC14 guidance on delegating investment management. Trustees do not need to be investment professionals; they need a manager they can trust.
"We're not a faith-based organisation"
Epworth's client base includes non-faith charities, trade unions, and independent schools that value ethical clarity and transparent governance, regardless of religious affiliation. The investment criteria are principled and well-documented; organisations that share those principles are welcome, whatever their background.
| Objection | The Reality |
| Returns will suffer | Short-term headwinds exist; long-term structural case is strong |
| Too restrictive | Multi-asset approach provides genuine diversification |
| Trustees lack expertise | Discretionary management handles this; CC14 explicitly supports delegation |
| Only for faith organisations | Epworth serves any charity that values ethical investment |
How to Choose the Right Fund for Your Organisation
The right Christian investment fund depends on your organisation's size, investment horizon, liquidity needs, and governance capacity. The following framework helps trustees think through the decision.
Step 1: Separate Your Reserves by Purpose
Not all of a charity's cash should be invested in the same way. A useful starting point is to distinguish between:
- Operational reserves (cash needed within 12 months): best placed in a liquid, low-risk fund such as the Epworth Cash Plus Fund, which offers same-day access at 3.67% A.E.R.
- Strategic reserves (cash not needed for 3 to 5 years): suitable for a diversified, multi-asset approach such as the WS Epworth Multi-Asset Fund
- Endowment capital (long-term, capital preservation focus): appropriate for a bespoke discretionary mandate tailored to the organisation's specific objectives
Step 2: Assess Your Governance Capacity
Smaller organisations with limited trustee investment expertise are generally better served by a pooled fund with built-in governance (such as MAF) than by a bespoke discretionary service. Larger organisations, or those with complex structures such as multiple congregations or restricted funds, benefit from the flexibility of the Discretionary Service for Charities.
Step 3: Verify the Ethical Framework
Not all funds that describe themselves as ethical apply the same criteria. Before committing, trustees should ask:
- What specific sectors are excluded, and at what revenue threshold?
- Does the fund engage actively with companies on ESG issues, or only exclude?
- Is the ethical framework independently reviewed?
- How does the manager report on ethical compliance to investors?
Epworth publishes its ethical framework, exclusion criteria, and engagement activity, giving trustees the transparency they need to satisfy their governance obligations.
Step 4: Consider the Full Cost
Management fees matter, but so does the cost of misalignment. A charity that invests in sectors that conflict with its mission risks reputational damage, donor attrition, and internal governance challenges that are far more expensive than a modest fee differential. The true cost of conventional investing, for a faith-based organisation, is rarely just financial.
The Verdict: Are Christian Investment Funds Worth It in 2026?
For UK churches and charities, the answer is straightforwardly yes, provided the fund is managed by a specialist with genuine expertise in faith-aligned investing.
The case rests on four pillars:
- Legal clarity. The Charity Commission's CC14 guidance and the Butler-Sloss ruling have removed the ambiguity that once deterred trustees. Responsible investment aligned with a charity's values is not just permissible; it is well-supported in law.
- Financial credibility. Christian investment funds, properly managed, can meet the long-term financial objectives of most churches and charities. Short-term performance gaps, where they exist, are driven by specific market conditions rather than structural weakness in the approach.
- Mission coherence. For a faith-based organisation, the question is not just whether a fund performs well. It is whether the organisation can justify its investment choices to its donors, beneficiaries, and community. A church investing in tobacco or fossil fuels while preaching stewardship of creation is a reputational problem waiting to happen.
- Specialist availability. The UK market for faith-aligned charity investment has a credible, long-established specialist in Epworth Investment Management. With £1.3bn under management, FCA authorisation, Charity Commission registration, and a track record stretching back decades, Epworth offers the governance infrastructure, ethical rigour, and sector expertise that generic fund managers cannot replicate.
The real question for trustees in 2026 is not whether Christian investment funds are worth it. It is whether there is a credible reason not to use one.
To explore Epworth's fund range or speak with the team about your organisation's investment needs, visit epworthim.com/what-we-offer or book a confidential call.
Epworth Investment Management Limited (“Epworth”) is authorised and regulated by the Financial Conduct Authority (FCA Registered Number 175451). It is incorporated in England and Wales (Registered Number 3052894), with a registered office at Methodist Church House, 25 Tavistock Place, London WC1H 9SF and is wholly owned by the Central Finance Board of the Methodist Church. Epworth-managed funds are designed for long term investors. The value of units in funds can fall as well as rise and past performance is not a guide to future returns. The level of income is also variable and investing in Epworth
funds will not be suitable for you if you cannot accept the possibility of capital losses or reduced income. Any estimates of future capital or income returns or details of past performance are for information purposes and are not to be relied on as a guide to future performance.