If your clients want to invest globally, and according to their Catholic values, you now have one more option to offer.
The Ave Maria World Equity Fund, the sixth fund in the family, launched last month.
Greg Heilman, the portfolio manager of the fund, said there had been a lot of requests from investors for this type of fund to give them the chance to diversify globally. “There are a lot of world-class companies out there, so let’s get that exposure,” he said, referring to the general strategy of the fund.
In addition to investing in established markets, this fund also will give investors a chance to benefit from the gains in the emerging markets, which was another appeal, Heilman said.
The investment objective of the find will be long-term capital appreciation. But it will exclude any company that it considers to be in violation of the values of the Catholic Church.
And that exclusion is bigger than you might think. Of the Russell 3000, Heilman said 121 companies are off-limits. While that’s just 4% in the number of companies, they happen to be among the bigger firms in the index so a full 29% of the market cap of the Russell 3000 is outside his potential universe. In fact, of the companies that are over $30 billion in market cap, fully 60% are off-limits to the fund (30 out of 50).
The corporate offenders include companies that are involved in any way with the abortion issue, which includes some pharmaceutical, healthcare and insurance companies, which all tend to be big companies. It also includes any company that gives corporate funds to Planned Parenthood. In addition, any company involved in pornography (including hotel chains where porn is available in the rooms) or companies involved in embryonic stem cell research are all considered offenders.
Heilman said that Ave Maria has a zero tolerance for these issues.
Religious-based investing is not a new concept, of course. Many investors are interested in putting their money where their beliefs are. Research firm Lipper tracks about 115 such mutual funds. There are not all specifically Catholic funds, but the vast majority of them are under the broader umbrella of Christian Funds.
They range in size anywhere from $100,000 to $1.7 billion, with total combined assets of $19.9 billion. The average 12-month return was 18.3%. And the average three-year and five-year returns were -4.95% and 1.87%, respectively, according to Lipper.
The mutual funds in the Ave Maria family have done well over their lifetimes, partly because of the market. Started in May 2001 with the launch of Ave Maria Catholic Values Fund, the funds have benefited from a stock market where small and mid-cap names have performed relatively well. The Catholic Values Fund posted a 27% return over the past year. The other funds in the family include: the Ave Maria Growth Fund, which also posted 27% over the past year; Ave Maria Rising Dividend Fund, 24%; Ave Maria Opportunity Fund, 23%; and the Ave Maria Bond Fund, 10%.
For the new world equity fund, Heilman says that U.S. companies that derive over half their revenues from foreign markets are viable investments for the fund. Telecommunications is one area globally that looks especially attractive, he says. And in Europe, the broader consumer sector also looks attractive.