---
title: Can AI Pick Faithful Investments? The Promise and the Missing Piece
description: Machine learning can optimize a values-based portfolio in ways human analysts cannot match. What it cannot do is understand why those values matter in the first place.
---

[Socially Responsible Investing](https://investingyourvalues.com/articles)

# [Can AI Pick Faithful Investments? The Promise and the Missing Piece](https://investingyourvalues.com/articles/can-ai-pick-faithful-investments-the-promise-and-the-missing-piece)

 Written by [Investing Your Values](https://investingyourvalues.com/articles/author/investing-your-values) | Oct 13, 2026, 5:51:42 PM

Artificial Intelligence has reshaped how work gets done across writing, marketing, healthcare, and finance. Its effect on faith-based investing is less settled, and the questions it raises are more interesting than the usual technology-adoption narrative suggests.

For faith-based investors, AI presents a genuine paradox. The technology is remarkably good at the analytical problem of portfolio optimization. It is incapable of the moral reasoning that defines why faith-based investing exists at all.

### Two Kinds of Responsible Investing

A useful distinction, drawn by researcher Laura Starks, separates socially responsible investing into two categories that are frequently conflated. Value-based investing incorporates the financial risk of holding particular asset types, adjusting position size and return expectations accordingly. Green investing is the clearest example: the thesis is that climate exposure is a priced risk.

Values-based investing works differently. It incorporates moral views directly into asset selection, placing restrictions on what is eligible for inclusion regardless of financial performance. Faith-based investing sits squarely in this second category.

Most of the attention in responsible investing has gone to the first category, where the financial logic is straightforward. But values-based investing has been growing steadily, driven both by politically motivated divestment mandates and by rising interest in faith-based approaches.

### Where AI Genuinely Helps

Faith-based funds face structural disadvantages that AI is well positioned to address. Many are relatively young with limited trading history. Many have narrow scope, focusing only on S&P 500 constituents. And most critically, they tend to value-weight their holdings rather than optimize weights using a model.

Those three characteristics compound. A young fund with limited scope and unoptimized weighting is leaving return on the table that has nothing to do with its values screens. Research by Maureen O'Hara and Artem Streltsov argues that machine learning techniques can close that gap, demonstrating that the assumed tradeoff between doing good and doing well need not be inevitable.

*"Incorporating values-based restrictions into portfolio selection has long been viewed as inducing a doing good versus doing well tradeoff for investors. Using the tools of artificial intelligence, we have demonstrated that this outcome need not be inevitable." — Hasnane Arain, FaithInvest*

The application extends beyond faith-based portfolios. Any investment mandate constrained by textual, nebulous, or implicit criteria faces similar optimization challenges: broader SRI mandates, tax-driven restrictions, geographic limitations, or thematic preferences. AI-based investing is not new in principle. The first AI-driven ETF launched in late 2017. What is new is applying it to constraints that resist clean numerical definition.

### The Problem AI Cannot Solve

Values-based investing requires discerning which investments are eligible when the metrics defining those constraints are not unequivocal. A company's involvement in an industry may be partial, indirect, or ambiguous. The moral weight of that involvement is a judgment, not a calculation.

This is where AI reaches its limit. The technology can analyze vast datasets and identify patterns at scale. It cannot determine whether a pattern matters morally.

*"What ChatGPT lacks is human judgment and creativity. The output that was produced is essentially a list, with no context. In short, there is no soul." — Michael Lustig*

For faith-based investors, that absence is not a minor technical limitation. It is the entire point. The purpose of faith-based investing is to apply moral reasoning that a purely financial model would not produce. Delegating that reasoning to a system incapable of moral judgment would hollow out the practice.

### The Jesuit Perspective

The Jesuits have engaged this question more directly than most religious institutions. Their analysis raises a concern that extends well beyond portfolio construction: AI could personalize spiritual experience to the point where individuals craft their own belief systems from adapted and recombined doctrine.

That possibility challenges traditional religious institutions, which may see a loss of control as their teachings are reassembled by individuals working with AI tools. The Jesuit position is that AI's influence on religious thought is inevitable, and that the relevant question is whether religious communities will actively participate in shaping how it unfolds.

Applied to investing, the practical conclusion is measured. AI can assist in drafting ideas and concepts related to faith values. It falls short of producing well-reasoned, contextualized principles that can be referenced and applied in an investment policy and guidelines document. The drafting is useful. The discernment is not delegable.

### How to Use It Well

The sensible position for faith-based investors is neither rejection nor uncritical adoption. AI is genuinely useful for the problems it is suited to: optimizing weights, processing disclosure documents at scale, flagging holdings that may conflict with stated screens, and identifying patterns across large universes of companies.

What it cannot do is decide what should be screened, why it matters, or how to weigh competing moral considerations when a company's conduct is genuinely ambiguous. Those decisions belong to the investor, their advisor, and the tradition they draw on.

Used as a guide, AI can help faith-based investors do well while doing good. Used as a substitute for judgment, it produces a portfolio that is efficiently optimized toward values nobody actually examined.

### What to Watch

As AI-driven faith-based funds come to market, ask how the screening criteria were established and who established them. A fund using machine learning to optimize weights within human-defined moral constraints is doing something different from one using AI to generate the constraints themselves. The distinction will not always be disclosed clearly, but it determines whether the fund reflects your values or an algorithm's approximation of them.

xxx

References:

Arain, Hasnane, FaithInvest, "Can AI Assess Your Investment Policy and Guidelines," 7/16/24  
[https://www.faithinvest.org/post/can-ai-assess-your-investment-policy-and-guidelines](https://www.faithinvest.org/post/can-ai-assess-your-investment-policy-and-guidelines)

Ibid.

O'Hara, Maureen, and Streltsov, Artem, "Keeping the Faith (and Returns): An AI Approach to Values-Based Investing," 10/19/24  
[https://papers.ssrn.com/sol3/papers.cfm?abstract\_id=4992209](https://papers.ssrn.com/sol3/papers.cfm?abstract_id=4992209)

Jesuits EOF, "Cowork Magis," 9/2/24  
[https://jesuits.eu/news/2780-cowork-magis](https://jesuits.eu/news/2780-cowork-magis)

 

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