Inspire Small/Mid Cap ETF (ISMD) seeks to track small- and mid-capitalization U.S. companies that align with biblical values through faith-based screening criteria. This values-based equity ETF excludes businesses involved in activities deemed inconsistent with Christian principles while providing exposure to smaller American companies.
How It Works
ISMD employs a rules-based screening methodology that first applies biblical values filters to exclude companies involved in abortion, pornography, gambling, tobacco, and other activities. From the remaining universe, the fund selects small- and mid-cap stocks using fundamental analysis and quantitative metrics. Holdings are weighted based on market capitalization with periodic rebalancing to maintain alignment with both financial and faith-based criteria.
Key Features
- Faith-based screening excludes companies involved in activities inconsistent with biblical values, appealing to values-driven Christian investors
- Focuses on small- and mid-cap companies offering potential for higher growth compared to large-cap alternatives
- Combines ESG-style screening with traditional fundamental analysis to identify quality smaller companies with strong financial metrics
Risks
- This ETF can lose value if small- and mid-cap stocks underperform, which historically occurs during economic uncertainty when investors favor large-cap stability
- Values-based screening significantly reduces the investment universe, potentially limiting diversification and creating concentration risk in certain sectors or stocks
- Smaller companies face higher business failure rates and greater volatility, potentially causing 40-50% declines during market downturns compared to large-cap alternatives
Who Should Own This
Best suited for faith-based investors with 5+ year time horizons seeking small/mid-cap exposure while maintaining biblical values alignment. Requires high risk tolerance due to small-cap volatility. Works as satellite holding (10-20% of equity allocation) within diversified portfolios for Christian investors prioritizing values over maximum returns.