The Wall Street Journal today reported “Catholic Principles Guide Mutual Funds.” The piece went on to describe the Ave Maria Funds’ investment philosophy and performance.
I couldn’t find the story on the newspaper’s website, but this Greek site has it. Here’s the paper’s take on the socially responsible investment style:
“The key principle behind the Ave Maria funds is avoiding companies which make money from abortion or which donate money to planned parenthood organizations. Unlike some other religious funds, the Ave Maria funds don't screen out tobacco, firearms or alcohol-related stocks. But in contrast with some funds which allow companies which make money from prohibited activities below a certain revenue threshold, Ave Maria funds take a “zero-tolerance” approach to prohibited activities, [CEO George] Schwartz said.”
The company avoids Google (for porn reasons) and even Wal-Mart (because it sells the “morning after pill”). Still, while exempting these high fliers, Schwartz believes there are still plenty of quality companies left to choose from, allowing the funds to outperform despite the handicap. The piece says, “Current evidence backs this up: the Ave Maria Opportunity Fund, (AVESX), for example, has outperformed the S&P 500 by almost 16 percentage points on a year-to-date basis, according to Morningstar. The Ave Maria Rising Dividend Fund, (AVEDX), despite marginally underperforming the S&P on a year-to-date basis, has outperformed the S&P over a three-year period by 4.2 percentage points.”
Ave Maria includes five funds with a total of roughly $500 million in assets. Schwartz says that the funds have held up despite the recession and that people continue to be interested in investing according to their values. ” ‘As people get older they tend to get more interested in spiritual matters and wealthier, notwithstanding the recession,’ Schwartz said. ‘Although the financial setback scared a lot of people into going onto the sidelines with their cash, we saw less of that than other mutual funds.’ “