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iotech stocks are risky, volatile, and potentially worth a fortune. But are they biblically sound?

Some evangelical investors are betting Christian-friendly stocks can outperform the market, and they’re leaning heavily on biotech to prove them right.

A pair of index funds launched last week promise to filter out companies that don’t “align with biblical values.” That means no “sin stocks” that deal in alcohol, tobacco, or firearms. Instead, they’re exclusively investing in “inspiring” companies, according to their regulatory filings. In practice, that means the funds’ largest holdings are cancer drug developers Incyte and Kite Pharma.

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There’s no top-down preference for biotech, according to Robert Netzly, CEO of Inspire Investing, which introduced the funds. But the quest to treat illness happens to score well on Inspire’s proprietary metric for picking companies, which Netzly said scours scores of data points — including federal records and donor rolls — to determine how well companies comport with the firm’s view of Christian morality.

“Look at a company like Bluebird Bio,” Netzly said. “They’re doing really groundbreaking work to potentially cure genetically caused disease. Those are the kind of companies that our investors really want to support.”

Biotech’s efforts to edit genes and otherwise tinker with creation aren’t barriers for Inspire, he said, because “as long as it’s not destroying life, we’re all for it.”

Incyte, the largest holding in Inspire’s index of big companies, said it does not comment on the decisions of its investors. Kite Pharma and Bluebird Bio, indexed in the company’s mid-sized fund, didn’t respond to a request for comment.

Inspire is among hundreds of firms selling what are called exchange-traded funds — customized indexes that lump together stocks based upon a uniting factor. The ETF industry has boomed in recent years because its offerings are fairly cheap — fees tend to fall below 1 percent — and allow investors of varying sophistication to diversify their bets.

“A lot of financial advisers can’t buy individual stocks and risk having them blow up and lead to angry calls from clients,” said Brad Loncar, a biotech investor who manages an ETF focused on cancer immunotherapy. “ETFs spread the risk and make biotech more accessible to a wider range of investors, and that’s good for our industry.”

The increasing popularity of ETFs has created a market for niches ever narrower, said David Kathman, who tracks socially responsible funds at Morningstar. Funds with a religious bent have come and gone in recent years, including a Shariah-compliant offering that shut down last year and a family of pan-Christian funds that closed its doors in 2011.

But Inspire’s approach stands out thanks to its algorithmic approach to picking stocks.

Most ETFs set their investment criteria and then index the most valuable companies that fall within them, relying on the wisdom of the markets to sort things out. Inspire, however, relies solely upon its values-based rating system, called the Inspire Impact Score.

The implicit bet is that companies in good biblical standing will outperform the market. It’s a fairly bold gamble, especially in biotech, where even dedicated investors who pore over scientific papers and regulatory filings struggle to predict whether clinical trials will come up positive.

But Netzly believes in Inspire’s methodology, pointing to a company-sponsored study concluding that “biblically responsible” stocks beat the market by 4.7 percent over a five-year period.

“We say all the time, good values and good returns are not mutually exclusive,” Netzly said.

Christian-inspired biotech investing extends beyond the world of ETFs. Boston-based Eventide, which has about $1.6 billion under “biblically responsible” management, has a particular focus on the life sciences — and did so well in 2015 that Chief Investment Officer Finny Kuruvilla was profiled in Bloomberg.

Last year, however, Eventide’s biotech fund took a 16 percent loss as the industry swooned. Kuravilla no longer grants interviews, said Rob Moll, the fund’s director of communication.

But Moll said the firm hasn’t lost faith in its methods. “The best investors always have down years,” he said.

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As for Inspire, its definition of “biblical values” rules out investing in companies that support “the LGBT lifestyle,” according to its filings with the Securities and Exchange Commission.

That stipulation would seem to put Inspire out of step with most of its portfolio.

More than 90 percent of Fortune 500 companies prohibit discrimination based on sexual orientation, according to Human Rights Watch, and two-thirds provide benefits to employees’ domestic partners. In biotech, leading companies including Genentech and Amgen have spoken out in support of LGBT employees, and industry trade group BIO has long promoted a culture of inclusion.

But Netzly sees no discordance with Inspire’s investing ethos.

“The first thing to understand is that we love our neighbors in the LGBT community, and we encourage our companies to provide tolerant workplaces,” he said. Where companies run afoul of Inspire’s metrics, Netzly said, is when they spend “corporate dollars and time promoting something that is not in line with biblical values.”

What happens when a member of the Inspire portfolio commits a moral infraction? The fund plans to put offending companies on a six-month probation until management addresses the issue, Netzly said. If companies are unwilling to change, they get booted from the fund — and Inspire hasn’t ruled out shareholder activism to influence corporate leaders.

“That’s what we call inspiring transformation,” Netzly said.

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