Investors' Faith in Mutual Funds Is Rewarded

Gautsche says that even though MMA had long warned of deceptive and dangerous practices in the financial markets, that foresight wasn't enough to stave off the damage.

"The whole industry has suffered from the market downturn of last fall," he says. "It has put stress on every aspect of the industry, and we are not immune to that. The excesses of the market, specifically with the big banks and some of the issues that put the economy over the tipping point last year, were things that we had been talking about and identifying for several years as issues. The mortgage issues and the lending practices were things that we were talking about several years before the mess hit the marketplace."

Gautsche says faith-based funds strive to strike a balance between what is good for faith and prosperous for business.

"You have to take a long-term perspective," he says. "As a bank or an investment firm, you can make short-term profits. But if, in the end, the investments fail and you have to have these defaults, it was a bad business move. From an ethical and religious standpoint, people into debt they can't afford, buying things they can't afford and probably don't really need isn't in clients' best interest and doesn't create a healthy, fulfilling life. Ultimately, causing bankruptcy or having people lose their homes are not business practices we want to be associated with."

-- Reported by Joe Mont in Boston.