Pastoral Issues

Ave Maria's Heavenly Returns

by John Pacheco

Politics and money - inarguably the two most powerful and worldly instruments to get things done. For most faithful Catholics, our focus has been on ensuring our vote is consistent with our Faith. In the decades following Roe v. Wade, the Catholic political conscientiousness has been slow to awaken to the fact that you cannot vote for Pontius Pilate without also crucifying Jesus Christ. It has been a long road indeed.

Western Catholic politicians have generally been anti-Catholic secularists because of the weak or non-existent religion of their Catholic constituents. And with the recent push for gay marriage, nominal Catholics will have yet another opportunity to reflect where their true spiritual allegiances lie. Many will no doubt examine their spiritual lives more closely, and, seeing the bankruptcy of their spirituality, will return to the faith of their grandfathers. Most of them, however, will not.

As the century progresses, the Catholic Church's influence in society will paradoxically continue to decrease and to increase. As the cultural establishment insists on its own self-destruction, the culture of death will ensure that faithless Catholics will not be able to propagate their cancer in the Church. Its adherents will simply die out. Conversely, faithful Catholics will conquer this cancer through their allegiance to the Magisterium and their obedience to God's command to be "fruitful and multiply". It's really that simple. In the interim, however, faithful Catholics are in the minority and must try and use their political influence where possible.

Political considerations aside, this war is fought on many fronts, not the least of which is the financial one. Until recently, Catholics have not engaged their opponents in this particular field of battle. Yet, in order to be successful in this culture war, this front is absolutely critical if we are to make a dent against the Enemy. Money talks. And if enough money tells big business that unethical business practices will not be tolerated, the corporate establishment will have no choice but to listen.

Corporate executives, directors, and shareholders may care little for Catholic moral teaching, but the god of money is no respecter of social or moral allegiances when his share value falls. Indeed, a constant and steady mass migration of Catholic money away from the corporate pandering to anti-life and gay agendas might just be the engine of a moral revolution in the West. Some pro-life organizations have been rather successful in using money and share power to bring corporate America around to jettisoning anti-life "charities". Human Life International (HLI), for instance, was successful in getting one public corporation to stop donating to Planned Parenthood. HLI purchased enough stock to force a vote on the company's corporate charitable contribution policy. Fearing a public backlash and bad publicity, the company caved in and no longer contributes to Planned Parenthood. Yes, indeed, money does talk, and sometimes the talk is very good for pro-family forces.

More and more Catholics are beginning to realize that not only do they have a political responsibility to elect moral candidates, but they are also realizing that such a duty does not end at the ballot box but extends into corporate boardrooms as well. It is becoming more and more apparent that investing your money with companies like Pfizer Inc., who produces and distributes birth control pills, is just as bad as voting for Senator Edward Kennedy.

While it is true that the moral implications are the same, the political and corporate cultures can be vastly different. The political player must make a decision on controversial social issues, but for many corporations, their direct activities are not morally problematic. With the exception of drug companies and the entertainment industry whose main business might be selling "death products", most companies can easily distance themselves from political pressure groups of the left. If enough pressure is applied against their internal policies - policies like funding artificial contraception in their health plans; extending benefits to unmarried persons or same-sex partners; or contributing to abortion providers - they can be easily defeated. Why? Because share price matters. A profit-driven company will generally put the interests of its shareholders and other stakeholders over any socially progressive policies. That's the beauty of money. It's blind to the left's notion of "human rights". If Catholic and other pro-family groups can harness this reality, an effective defense against the gay agenda can be erected. Business is business. And the slightest hint of a share value drop is enough for corporate America to become rather squeamish about controversial social legislation.

A significant way of forcing corporate America to take notice has been to tap into the idea of "ethical funds", an idea originally floated by environmental groups in the early nineties. So-called 'Green mutual funds', for instance, were very popular among environmentally sensitive investors. A couple of years ago, George Schwartz, the founder of Schwartz Investment Counsel Inc. established Ave Maria Mutual Funds to invest in companies which do not violate Catholic moral teachings. The National Post reported that this "Fund's mandate is unyielding when it comes to companies deemed to violate the values of the Roman Catholic Church. Money manager George Schwartz, 58, said he won't invest in makers of birth control pills, hospitals that provide abortions or companies that exhibit pornography." (Hail Marys Won't Save 'Unholy' Stocks, The National Post, August 29, 2003)

The Ave Maria Catholic Values Fund, a diversified, value oriented equity mutual fund, represents a top performing mid-cap mutual fund. It has shown itself to be a strong Fund, ranking in the top 9th percentile (1 YR: 18.31%). Schwartz's approach is really about common sense. He seeks out the most stable and enduring companies which consistently show a strong net asset position with healthy profits. From this list, he begins screening out the offending companies which contradict Catholic moral teaching - particularly in areas related to human sexuality. The Fund's portfolio comprises of approximately 75 companies in 14 industry groups with healthy market capitalizations. Based on the results which the Fund has earned thusfar, it seems that Mr. Schwartz's two decades of investment savvy are paying off for shrewd Catholic investors.

According to the Post's article, one of the three mutual funds, the Ave Maria Catholic Values Fund, has gained 23% this year, outperforming 84% of all U.S. funds tracked by Bloomberg data and exceeding the 13% advance of the S&P's 500 index. The Fund ranks second among the 21 ethical funds tracked by Bloomberg. The objective of the Fund is to seek out approximately 600,000 faithful Catholic investors out of a population of 60 million U.S. Catholics. Since its inception in May, 2001, the Fund has attracted approximately 1,400 investors, and will likely rise substantially as more Catholics learn of the Funds' existence.

While there are some analysts who believe this sort of 'moral investing' has hurt the Fund because it shuns 12% of the largest 3,000 public companies, Schwartz allays these concerns:

"We're investment professionals first, so our goal is to make as much money as possible for our shareholders. The screens do not inhibit us from doing that."

Unlike other socially responsible mutual funds, Ave Maria Mutual Funds knows where its bread is buttered - in producing exceptional returns for its unit holders. Unlike other ethical funds which do not place financial performance as the primary objective, Schwartz's plan is to put money and morality on the same pedastal, placing an equal emphasis on both the financial stability and growth of its securities and other financial instruments as well as on the moral mandate for its existence. The Fund has a six-member advisory board that has established guidelines to ensure selected securities meet its Catholic guidelines. The members of this board are not minor leaguers, either. The chairman is none other than Bowie K. Kuhn, Major League Baseball's former commissioner. Tom Monaghan, the founder and former chairman of Domino's Pizza Inc., and Templeton award winner and director of Social and Political studies at the American Enterprise Institute, Michael Novak, are also on the board. Batting clean up on this roster, as ecclesiastical advisor, is His Eminence Adam Cardinal Maida, the Archbishop of Detroit.

If Catholics want to impact the culture of death and "fight the good fight", they must be prepared to do so at all levels of battle. First and foremost, this includes war in the spiritual realm, but it also includes the sacramental dimension of fighting in the flesh. Faithful Catholics are now well used to putting their political vote in a place which honours Our Lord. Now it's time for us to put our money where are mouths are by voting with our wallets. Corporate executives and directors are politicians too. If we put our money where our morality is, they will be sure to bend their corporate social policy in conformity to the shareholders' interests. If they don't bend, the shareholders will bend them.

With the parable of the talents, Jesus showed us all that He expected results from His investment (Cf. Matthew 25:14-30). It appears that Schwartz and company take Our Lord's advice rather seriously and rather literally. And that's a good thing too for the Catholic investor. After all, there's no better feeling than earning a sound, healthy return while sticking it to the devil at the same time. Let's pray that more Catholic financial professionals in this industry pay attention to Mr. Schwartz's noble efforts and then take Our Lord's advice to "go and do the same."

John Pacheco
The Catholic Legate
September 1, 2003


This article originally appeared on Catholic Exchange.