The Praxis Impact Bond Fund, a leading faith-based and socially responsible investment option, has achieved two significant milestones in 2024. The fund, managed by Praxis Mutual Funds, a division of Everence Financial, has reached its 30th anniversary and surpassed $1 billion in assets under management.
This dual achievement underscores the growing interest in socially responsible investing and the fund’s success in providing investors with a way to align their financial goals with their values. The Praxis Impact Bond Fund aims to offer a diversified, values-screened ‘core bond’ portfolio that includes impact-oriented bonds, allowing investors to make a positive difference while seeking financial returns.
Chad Horning, CFA, President of Praxis Mutual Funds, emphasized the significance of these milestones, stating, ‘What’s especially meaningful to us, as the Fund reaches its 30-year anniversary and $1 billion in assets, is that it’s helping make a difference in the wider world and in everyday investors as they steward their family finances.’
The fund’s portfolio includes a range of U.S. corporate debt securities, government agency notes and bonds, and mortgage-backed securities. Over the years, the fund has increased its allocation to impact-oriented bonds, reflecting the growth and diversification of the impact bond market.
Benjamin Bailey, CFA, Vice President of Investments and Senior Fixed Income Investment Manager at Praxis, noted the evolution of the fund since its inception in 1994. Initially focused on screening out investments that didn’t meet specific values criteria, the fund has shifted towards actively seeking positive impact investments. Bailey highlighted a pivotal moment in 2006 when the fund invested in vaccine bonds, which opened up new possibilities for making a tangible impact through fixed income investments.
The growth of the green bond market in the U.S. since 2009 has further expanded opportunities for impact investing within the fund. As of 2024, approximately 36% of the fund’s portfolio is dedicated to positive impact bonds, a significant increase from 25% in 2016 when the fund was renamed to reflect its impact-focused strategy.
Praxis defines positive impact bonds as those that make specific positive contributions to climate and communities. These include green bonds, social bonds, and sustainability bonds, which follow guidelines established by the International Capital Market Association (ICMA).
The success of the Praxis Impact Bond Fund reflects a broader trend in the investment world towards socially responsible and impact-driven financial products. As investors increasingly seek ways to align their portfolios with their values, funds like this provide an avenue for individuals and institutions to potentially make a positive impact while pursuing their financial objectives.
For those interested in understanding the impact of their investments, Praxis publishes an annual Real Impact Report and quarterly updates detailing seven different impact strategies across various fund types. This transparency allows investors to see how their money is being used to promote positive change.
As the Praxis Impact Bond Fund enters its fourth decade with over $1 billion in assets, it stands as a testament to the growing importance of impact investing in the fixed income space. The fund’s journey from a niche product for Mennonite and Anabaptist investors to a significant player in the socially responsible investment landscape illustrates the evolving nature of ethical investing and its potential for growth in the years to come.
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