Talking about the "things that matter most" on April 29
Live from the national book launch of “Good Returns” by George Schwartz of the Ave Maria Catholic Values Funds
4:00 – Good Returns: Making Money by Morally Responsible Investing
Offering time-tested wisdom on the complexities of the investment process, George Schwartz is here to examine the difference between socially responsible investing and morally responsible investing—the latter of which screens companies according to a clear set of criteria: those who support or service the abortion industry, producers and distributors of pornography, and companies involved in embryonic stem cell research. Based on this set of guidelines, as well as the success of the Ave Maria Mutual fund, George demonstrates that high returns are achievable while investing in a morally responsible way. Also included is insightful commentary on the current political policies affecting the country’s financial state.
4:40 – Wall of Separation: The Phrase That Divided America
The Supreme Court has ruled that a cross can remain at a WWII Memorial in the Mojave Desert, a decision that comes on the heels of a federal court decision which struck down the National Day of Prayer as unconstitutional. Will we ever have clarity on the establishment clause? We talk with Brian Godawa, award-winning screenwriter of the documentary “Wall of Separation: The Phrase That Divided America.” The documentary takes a look at how our understanding of church and state relations has changed through history by means of Supreme Court decisions and cultural pressures. From Everson vs. Board of Education to the most recent decisions, this documentary raises questions: Should "original intent" guide modern interpretation? Should government be secular, or should religion have influence on the State? There are no easy answers to this ongoing debate that polarizes the nation.
5:00 – Kresta Comments - Censorship: Comedy Central, Islam, and the Tea Party Movement
5:20 – Morally Responsible Investing
As we broadcast live from the National Launch of George Schwartz’s book “Good Returns,” we talk with Thomas Monaghan. Tom had an important role in the founding of the Ave Maria Mutual Funds as a co-founder. We talk about screens and filters on investments, the “family of funds” and Tom’s main priority – Catholic Education.
5:40 – HBO’s “You Don’t Know Jack” (Kevorkian)
HBO has aired its film “You Don’t Know Jack,” of course, the story of the infamous Dr. Death, Jack Kevorkian, who gained notoriety in the late 80s and throughout the 90s for promoting and committing physician assisted suicide. Convicted of 2nd degree homicide in 1999, Kevorkian spent 8 years in prison. Widely assumed to be a positive portrayal of Kevorkian, one pro-life activist who helped to bring Kevorkian down, says “I don't think they glamorized him (Kevorkian). I think he came off as a pathetic little freak." We talk to Lynn Mills and Rita Marker from the International Anti-Euthanasia Task Force.
The first segment should be fascinating. I'm not sure how a morally-responsible mutual fund can invest in companies like General Dynamics, United Technologies, and Federated Investors.
ReplyDeleteThe General Dynamics holdings are particularly ironic as they're held in the 'Growth' fund. What has to happen for the company to do well and the fund to 'grow'? More weapons have to be purchased and used against other human beings. These are Catholic values? The Church teaches the Just War theory, but I'm not sure where the marketing of and profit from machines of death fits in there.
What's even more concerning is the ownership of shares in companies like Federated Investors. How much does Comcast make from the marketing and sale of pornography through its On-Demand system? Ave Maria funds may not invest in Comcast, but Federated mutual funds sure do. If Ave Maria won't invest in pornography, why give money to Federated to do it while hoping to increase the value of that investment?
I think the idea of a faithfully-Catholic mutual fund is excellent.. but I worry that Ave Maria funds are really missing an opportunity to be *truly* pro-life and pro-family.
I wonder what Mr. Schwartz would advise about "proportionality"? I mean by that term that it would obviously be silly for anyone to put all of their "retirement money" in a Mutual Fund (Catholic or non), as we've seen with recent movements in the equity markets. But what is the proper amount of "retirement money" to put into such an account? Should one own their home first? Should one also consider buying CDs at your local credit union that can then loan that money out to local businesses to support local industry? These are all questions the answers to which will vary depending on the person answering, but as he is a financial professional I would expect Mr. Schwartz to have wrestled with these questions.
ReplyDeleteMr. Kresta, in the most respectful tone I have to say that you and Mr. Schwartz are both older than me so I hope to tap into your wisdom: how long has it been that people have been saving "retirement money"? Is this a new phenomenon that results from the employer/employee relationship?
I hope the length of my post doesn't obscure its points.
Sincerely,
Matthew Wade
To BW: it might make sense for you to read the Ave Maria Mutual Funds prospectus and marketing materials. Abortion (including contraception and embryonic stem cell research) and pornography are the areas screened out. Ave Maria Mutual Funds does not claim to be all things to all people, they're just trying to help Catholics and other concerned investors avoid certain abhorable areas.
ReplyDeleteAve maria mutul funds is like the entire ave maria agenda.Concern only for the unborn americans,and everyone else be damned.I got a kick when ruthless corrupt companies like haliburton-who betray everything catholic-are held up as models of virtue.,,,Rob
ReplyDeleteAnonymous #1 -
ReplyDeleteI completely understand AMMF's screening. I know they screen out abortion and pornography. That's great. The problem is - they don't!
Just to use the one simple example I've already provided:
* Comcast makes money from pornography
* Federated Investors owns many shares of Comcast. If Comcast does well, Federated's mutual funds benefit.
* AM funds own many shares of Federated Investors. If Federated's funds do well and their stock increases it helps AM funds.
Some may argue that AMMF is too far 'removed' from the sale of porn to be responsible. I disagree simply because Mr. Schwartz and his employees should know what Federated invests in.
...and this is just Comcast! We haven't even gotten to other companies Federated invests in, like Merck (produces contraceptives).
To Rob: Your post displays an ignorance exceeded only by your incivility.
ReplyDeleteTo BW: As far as I can see your General Dynamics reference fails to acknowledge the self-imposed limits of the Ave Maria Funds. The Ave Maria Funds don't claim to screen for all areas of Catholic concern. Your concern about munitions manufacturing may be legitimate but I suspect you believe some firm should be about the work of creating weapons for defensive purposes at the very least. In any event, the Ave Maria Funds don't screen for this area of concern.
Regarding Federated: It's probably best to let George Schwartz define the relationship with Federated which he does in the book, Good Returns.
“The relationship we’ve established with Federated has been most gratifying. The Ave Maria Money Market Account has become popular with our shareholders, currently topping more than $25 million in assets. Federated handles all management, basically as an extension of its $1 billion-plus Automated Government Cash Reserves Fund. The operation passes muster from a Morally Responsible Investing point of view, because it buys only short-term money market instruments of the U.S. Treasury and U.S. agency obligations…”
When all is said and done, I prefer George Schwartz' way of doing it, to your way of not doing it.
Institutional investors are charged with obtaining good performance. They act prudentially and must exercise due diligence. As Schwartz put it: "No one with such a fiduciary responsibility is free to choose a mutual fund merely because it's Catholic, not even those managing investments for Catholic organizations.
ReplyDelete"However, most investment professionals are aware that their financial choices do not exist entirely apart from the missions of the institutions they represent...
It's worth mentioning that "over 300 institutions, mostly Catholic, have invested anywhere from $10,000 to $20 million in the Ave Maria Mutual Funds. That's a substantial testament of faith in the Morally Responsible Investing concept. It's especially significant because it reflects the judgments of people whose professional lives are spent evaluating every conceivable type of opportunity."
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ReplyDelete"Influencing corporate behavior is not easy but neither is it impossible. Anti-abortion activist, Tom Strobhar, president of the Dayton, Ohio-based investment firm, Pro-Vita Advisors (another source from which we draw company information for our moral screening process), has succeeded in persuading several major companies to stop donating to Planned Parenthood. One of his biggest hits was American Express. And I was presesnt when Strobhar confronted Warren Buffett, taking the microphone at a Berkshire Hathaway annual meeting to chastise the great man for his abortion support- in front of 22,000 shareholders. Such effort and the boldness behind it are to be admired greatly" (Good Returns, p. 178).
ReplyDelete"I suspect you believe some firm should be about the work of creating weapons for defensive purposes at the very least."
ReplyDeleteThe government has a right/obligation to defend itself and its people. It obviously takes weapons to do this. My problem is not necessarily the production of those weapons as much as it's the marketing of them and the wealth that's being accrued as a result. The leadership of General Dynamics makes millions. Where does that money come from?
"In any event, the Ave Maria Funds don't screen for this area of concern."
Ave Maria Funds pronounce themselves to be "morally-responsible" and "do not violate core teachings of the Catholic Church." Are you suggesting it's ok to excuse an area of concern (like weapons marketing for uses that violate the Just War Theory)? The point is to be morally responsible, not "almost-morally-responsible omitting the areas of concern we're not really concerned about".
"The relationship we’ve established with Federated has been most gratifying."
I'm sure it is as long as AMMF employees and investors maintain the "almost-morally-responsible" mentality and ignore the fact that Federated invests in companies that are explicitly contrary to Catholic values (and the supposed AMMF values), and that AM mutual funds benefit from those investments.
"The Ave Maria Money Market Account has become popular with our shareholders..."
Interesting that he only discusses the Money Market Fund, unless there are other funds mentioned that you haven't quoted here. The Money Market Fund doesn't invest in Comcast, cable tv companies, or Merck.
"When all is said and done, I prefer George Schwartz' way of doing it, to your way of not doing it."
But the Church teaches *not* to do it if it violates core teachings, no? AM funds violate core teachings of the church, plain and simple.. despite advertising the contrary.
"However, most investment professionals are aware that their financial choices do not exist entirely apart from the missions of the institutions they represent..."
Then why make financial choices that *do* exist apart from the mission of the Catholic Church?
"over 300 institutions, mostly Catholic, have invested anywhere from $10,000 to $20 million in the Ave Maria Mutual Funds. That's a substantial testament of faith in the Morally Responsible Investing concept. It's especially significant because it reflects the judgments of people whose professional lives are spent evaluating every conceivable type of opportunity."
So because a lot of people do it makes it right? I wonder how many institutions and individuals would stay in AM funds if they really knew where their money was going.
Again, let me repeat.. the idea of a morally-responsible mutual fund is commendable. But AMFF and Mr. Schwartz can't just go halfway and call it good enough. Invested funds *can't* violate teachings of the Catholic Church.
There are always suitable investments out there. It's just a matter of finding them and educating the shareholder to acknowledge and accept the fact that their investments likely won't keep up with the indexes. Considering those shareholders can rest easy knowing they're not profiting from evil, I think they'd understand.
Let me say it more clearly: Your facts are wrong. "AM funds [DO NOT] own many shares of Federated Investors."
ReplyDeleteYour criticism of AMF reminds me of Christopher Hitchens criticism of Mother Theresa. He argued that Mother Teresa failed to do justice because she didn't confront systemic evil (what some call sinful social structures). She chose, rather, to perform individual acts of mercy thereby perpetuating an individualistic ethic and piety.
She, according to Hitchens, ultimately, did little more than provide false comfort and a creepy aura of self-righteousness for her co-religionists. In your criticisms of the screens instituted by the Ave Maria Fund, you sound dimly like him.
Because a pole vaulter doesn't throw the shotput, he isn't athletic? Dominicans don't emphasize contemplation as much as Cistercians, maybe they aren't really Catholic. You seem to have a pretty limiting and rigid understnding of "Catholic".
I wish you purity of heart and success in your stewardship. But criticism is easy and, worse, yours happens to be false.
Again, I prefer George Schwartz' way of doing it to your way of not doing it. If you've got a better way, more power to you.
"Your facts are wrong. 'AM funds [DO NOT] own many shares of Federated Investors.'"
ReplyDeleteHere are the "wrong" facts.
As of March 31, 2010 the Class B shares of Federated Investors comprised:
* 3.3% of the Ave Maria Opportunity Fund
* 3.0% of the Ave Maria Catholic Values Fund
* 3.0% of the Ave Maria Rising Dividend Fund
It may be in other funds as well, but we don't know because AMMF only details the top holdings.
Sorry, that is indeed 'many shares'. Those shares do well when Federated mutual funds do well. Federated mutual funds do well when Comcast sells more porn and Merck sells more contraceptives. For AMMF to declare their funds 'morally-conscious' when they must know this is disingenuous.
If what you say is correct (and I'm not arguing the point at this time) then the state of affairs is different than what I had heard.
ReplyDeleteI will follow up on this with George Schwartz and/or others after Sunday. As I've seen in the past, if these companies violate the screens, they will be pulled and we will thank you for pointing this out.
Thank you for listening to my points and looking into it further. If you have the time and energy, I'd love to see a follow-up.
ReplyDeleteBW,
ReplyDeleteSorry for the delay in getting back. I had hoped to pursue things a little further but I'm letting the best be the enemy of the good.
You were correct various Ave Maria Mutual Funds do include shares of Federated Investors Inc. (FII class B stock.)
However, Federated does meet the criteria and is not in violation of the stated principals of the funds. The members of the advisory board are known to me and I am confident in their desire and considerable capacity to follow the church teaching and make sound judgments.
Federated Investments Inc. is a financial firm that does not participate in abortion. It does not produce or distribute pornography. I recognize that inside some of it’s over 300 funds; there are issues of stocks and or bonds issued by companies that would not meet the Ave Maria Mutual Funds criteria. Ave Maria Mutual Funds does not own those funds and while Federated manages those funds it is not directly controlling or managing companies that violate the Ave Maria Mutual Funds filter.
I understand that this may not be good enough for some people and to them I regret Ave Maria Mutual Funds would not be a good choice.
I remain proud (and a little more knowledgeable) to have Ave Maria Mutual Funds as a sponsor of Ave Maria Radio and I believe they are men and women of good will, integrity and honor. They are making an impact on the world of commerce, they are true to their Catholic beliefs and returning reasonable profits to those whose investments they have charge.
It is not a perfect world, but it is gratifying to know that some people are trying and more importantly making progress towards the full integration of our faith into each and every crevasse of our lives. If you have any better ways, I'd like to hear them.
Al