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October 27, 2000

Faith-based Social Investing Comes to Canada

A new family funds launched by Meritas Financial next year will broaden the horizons for Canadian social investors. -- Canada does not share the history of investing based on religious values found in the U.S., and most of the growth in Canadian social investing has been through the initiative of credit unions and labor organizations. That is all about to change with the introduction next year of a family of mutual funds managed by a new company, Meritas Financial, Inc.

Meritas is a joint venture involving Waterloo, Ontario-based Mennonite Savings and Credit Union, Winnipeg-based Mennonite Foundation of Canada, and Goshen, Indiana-based Mennonite Mutual Aid (MMA) Financial Services. The new company plans to offer a series of mutual funds for the socially-engaged Christian community in Canada, as well as other socially responsible investors interested in comprehensive screening, shareholder advocacy, and community investing.

"These will be the first fully socially-engaged, faith-based mutual funds of their kind in Canada," said Mark Regier, Social Research and Advocacy Coordinator at MMA, home of the popular MMA Praxis mutual funds. "This is a project that I'm personally very excited about."

There is an active Mennonite community in Canada, represented by the two Canadian partners in the Meritas venture, as well as others financial organizations like the Winnipeg-based Mennonite Economic Development Associates. But this will be the first family of mutual funds specifically built on Mennonite values.

Meritas does not have securities approval of their prospectus, precluding any details on the funds, but they plan to emphasize transparency, accountability, and innovation in their decision-making process. The new company intends to go beyond the traditional screening associated with the social investing industry, and will engage in active dialogue with management to increase corporate accountability and stewardship.

"We hope to be able to help investors bridge the gap that currently exists between their principles and the way that they invest their money," said Gary Hawton, newly appointed CEO of Meritas. "I think that there is a significant portion of the Canadian population, including those outside of the Mennonite community, that will be interested in a family of mutual funds that screens investments in line with their faith values."

The socially responsible mutual fund market in Canada is worth an estimated $4 billion, roughly 1 percent of the total mutual fund market there, according to figures for the end of 1999. The new Meritas funds stand to make a significant contribution to the current field of about 23 socially screened funds, giving Canadian investors a range of new choices.

Meritas plans to offer its funds through a wide distribution network including the credit union system, full service and discount brokerage channels and independent financial planners with a competitive compensation package. It is currently planning to locate in the Waterloo, Ontario, area, where one of its founding partners, Mennonite Savings and Credit Union, is located.

"I am thrilled to be leading this company and look forward to working with the socially responsible investing community in Canada and around the world to make a lasting difference," said Hawton.

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