The Praxis Impact Bond Fund, a pioneer in faith-based and socially responsible investing, has achieved two notable milestones in 2024: celebrating its 30th anniversary and exceeding $1 billion in assets under management. These achievements highlight the fund's success in catering to investors who wish to merge their financial objectives with their ethical values, offering a diversified, values-screened 'core bond' portfolio that includes impact-oriented bonds.
Managed by Praxis Mutual Funds, a division of Everence Financial, the fund has evolved significantly since its inception in 1994. Initially focused on excluding investments that didn't align with specific values, the fund has progressively shifted towards actively seeking out investments that promise a positive societal impact. This shift was notably marked in 2006 with an investment in vaccine bonds, setting a precedent for the fund's future direction.
Chad Horning, CFA, President of Praxis Mutual Funds, remarked on the dual milestones, emphasizing the fund's broader impact beyond financial returns. Benjamin Bailey, CFA, Vice President of Investments and Senior Fixed Income Investment Manager at Praxis, detailed the fund's strategic evolution, particularly its increased allocation to impact-oriented bonds, which now constitute approximately 36% of its portfolio.
The fund's portfolio includes a variety of U.S. corporate debt securities, government agency notes and bonds, and mortgage-backed securities, with a growing emphasis on green bonds, social bonds, and sustainability bonds. These investments adhere to guidelines set by the International Capital Market Association (ICMA), focusing on contributions to climate and communities.
The Praxis Impact Bond Fund's growth mirrors a wider trend towards socially responsible and impact-driven financial products. For investors keen on understanding the tangible effects of their investments, Praxis offers transparency through its annual Real Impact Report and quarterly updates, detailing the fund's impact strategies.
As the fund steps into its fourth decade, its journey from a niche investment option for Mennonite and Anabaptist investors to a significant entity in the socially responsible investment sphere underscores the evolving landscape of ethical investing. The Praxis Impact Bond Fund's milestones not only celebrate its past achievements but also signal the potential for further growth in impact investing within the fixed income market.
