Socially Responsible Investing with Catholic Values
Catholic investors face a moral quandary. We are called to be good stewards of the gifts God has given us, including our finances. Yet, many investment opportunities have dubious moral implications. Should a Catholic invest in a company that engages in sinful activity if it offers a good return? Fortunately, the USCCB published a set of guidelines to aid individual Catholic investors when deciding how to grow their wealth.
Catholics do not have to choose between their money and their morals.
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Summit Investment Management has taken the USCCB guidelines to heart. We offer faithful Catholics a variety of investment portfolios, all meeting the USCCB guidelines. All the equities we invest in have been filtered both for moral value and potential return on investment. Summit’s Catholic investment strategies allow our fellow Catholics to be the stewards we are called to be: financially wise and morally upright.
Quick Answers to Some Common Questions
- Can Catholics invest successfully without violating the faith? Yes.
- Is it hard to invest in accord with the USCCB Guidelines? Not if you have help.
- Are your portfolios totally in accord with the USCCB Investing Guidelines? Yes. We both exclude bad actors and lobby companies to change, both of which are required by the USCCB.
- Can you send me a list of companies I should not invest in from a moral standpoint? For a variety of reasons, including the risk of an outdated list leading you to invest in immoral businesses, no. The USCCB won’t, either.
- I’m not Catholic but I like what you’re doing. Can I invest with you? Absolutely.
- Can you exclude things from my portfolio that the USCCB doesn’t prohibit, like tobacco or alcohol? Yes.
- Are your portfolios better than a mutual fund? We certainly think so.
- How hard is it to get started investing if I’ve never done it before? Pretty easy. Contact us and we’ll walk you through it.
- I already have an investment portfolio. Can you make it Catholic? Most likely. There’s a lot of ways we can help you, but we’ll need to talk with you to plan the best path forward.
- You keep saying I should contact you. Do you charge for consultations? No. Consultations are free and there’s no obligation to move forward after a consultation.
Is It Hard to Be a Catholic Investor? It Depends on How You View the USCCB Guidelines
Many people wonder how difficult it is to be a faithful Catholic investor. After all, being a money-above-all-else investor is hard enough. When you add in the exclusions and advocacy work Catholic investing entails, it seems like an insurmountable order.
Much like anything else, investing in accordance with the USCCB Guidelines has a lot to do with your perspective.
Some people view the guidelines as restrictions inhibiting their ability to make money. Others see the guidelines as a helping hand pointing out the proper way to use money. It’s much like the Ten Commandments. You can see them as restrictions on what you can or cannot do or you can see them as lights illuminating the path to a happy, fulfilled life.
In short, the hardest way to meet all the USCCB guidelines is trying to do so by yourself.
The guidelines call for a wide range of exclusions and additional advocacy work, something that is far too onerous for one person to keep track of or do on their own. Even we don’t do it all by ourselves. We work with other professionals who provide us with inside information on the changes going on in various industries. This collaboration is what allows us to easily react and adjust to changes, keeping the portfolios we offer our clients fully USCCB compliant.
It is simply unrealistic to think that any one individual investor can uncover all the bad actors.
It’s hard enough for professional financial advisors. That’s why we have dedicated a significant amount of time and effort to building these relationships with socially responsible watchdogs who keep us on top of the situation. We don’t expect individuals to have a network like we do, but they can access it through us.
Like most things worth doing, it takes effort to follow all the USCCB guidelines. That’s probably one reason why many Catholics throw their hands up and ignore them. But instead of just giving up, we invite all people of good will to reach out and see how easy it can be to use your investments for good, following the wisdom of the Church.
The List of Businesses Catholics Can’t Invest In
Many people ask us for “The List.” We understand why people believe we have a list of companies to avoid investing in. After all, surely we know what businesses we’re excluding from our portfolios, so it makes sense that we can send that list to anybody who asks for it.
Sadly, it’s not as simple as making a list and checking it twice.
Advocates for evil are very persistent and effective. While there are certain businesses that will probably always be excluded, there’s a much larger number that come and go from the list.
For example, suppose there are two pharmaceutical companies: A and B. A is currently manufacturing abortifacient drugs while B is not. A would be excluded from Catholic investment portfolios, but, assuming it’s not doing anything else objectionable, B could be included. If, at some point in the future, A ceases production of the drugs and B begins making them, their eligibility for inclusion in Catholic portfolios would switch. This scenario is really not that far-fetched.
Because these changes happen, and happen with little to no notice, we are unable to make public the companies currently excluded from our portfolios. The risk is that somebody uses an outdated list and unintentionally invests in a company that is now excluded but is not on the outdated list they have.
We do not want anybody supporting practices contrary to the faith at any time in any manner and will not expose faithful Catholics to that risk by irresponsibly making a moment-in-time list available forever on the internet.
For those who may find that answer unconvincing, we appeal to the example of the USCCB itself. In the USCCB Investment Guidelines, no effort is made to enumerate specific businesses that are off-limits. The Bishops themselves realized that such a task is not a good idea and limited themselves to outlining the kinds of activity that would exclude a business from investing.
Additionally, there’s more to investing than simply avoiding stocks that support evil. Your portfolio is supposed to be generating a return, after all. Just because company A supports abortion and company B doesn’t is not a reason to invest in B. It’s simply a reason not to invest in A. Our financial advisors go beyond simply excluding certain businesses. We actually create portfolios for our clients that are designed to perform well while also scrupulously avoiding immoral activities.
Summit Investments builds client portfolios carefully. We take our faith seriously and will never compromise our Catholic values to make a quick buck at the expense of an innocent life.
Different Portfolios Answer Individual Investing Needs
We go farther than simply offering a single, one-size-fits-all Catholic portfolio. Our Catholic financial advisors have created several funds to choose from, each offering a unique opportunity for investors.
If you have already started investing, you probably already know what kind of portfolio you want. But if you’re new to investing, chances are you have no idea what the differences are in the portfolios we offer. Don’t worry. We can help you figure out what would fit your needs the best.
In a nutshell, we have portfolios that are geared towards increasing in value over the long term. This is what most people think of when they think of investing. It’s more or less a set of stocks (and/or other securities) that are chosen to increase in value over time so you make money.
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We also have portfolios that are chosen not necessarily to increase in value, but to provide a stream of cash through dividends. There are companies that actually pay you to own their stocks. Our income focused portfolios do exactly that. They look for stocks that pay above average amounts and have solid financials. These portfolios are often a good choice for people looking to earn extra income continuously through their investments.
Our “boring” option, passive portfolios, is based on the premise that the stock market as a whole generally increases over time. So, rather than try to pick out specific stocks that we think will perform better than the market average, these portfolios try to follow the general growth of the entire market. Really, it’s not that boring, but as professional financial advisors, there’s something a tad anti-climactic about just trying to be average. So, we are able to spice things up a bit by offering passive portfolios that track specific market sectors rather than the broad stock market. Think of the broad market as being the main course and then having the ability to add “sides” to make the meal more interesting.
Capital Appreciation
Our Catholic Values portfolios are designed to grow your capital year after year.
Passive Portfolios
Harness the market’s historical growth patterns with a passive investing portfolio.
Donor Advised Funds
Our Catholic financial advisors will help you set up and manage charitable giving accounts.
What Makes Our Catholic, Socially Responsible Portfolios So Great
Just like every other financial advisor, we begin with the entire universe of potential investments. What really sets us apart is what we do next. The very first thing we do when creating a portfolio is apply our socially responsible filters to remove all the morally objectionable companies.
From there, we take a variety of steps depending on the investment approach being utilized. That could involve taking a deep dive into company fundamentals, valuation, and stock price action. Or it could be as relatively simple as reconstructing a stock market index in such a way as to exclude immoral companies. These portfolio construction processes are actually rule based so that the portfolios are consistent with the strategies that underlie them.
All portfolios are reviewed on their own fixed schedules as well as in response to specific market developments. The result is portfolios that stay agile in the face of ever changing market conditions.
While no system is perfect, we do believe that our system provides our clients portfolios that deliver what is expected and are geared towards long term asset appreciation fully in accord with the USCCB Guidelines.
Why Our Portfolios Are Better Than Mutual Funds
When asked the best way to get started investing, most people assume the answer is a mutual fund. For Catholic investors, there are a few Catholic mutual funds to pick from, but we believe you’ll be much happier with one of our investment portfolios.
One glaring issue with mutual funds is you have no say over what equities are in the fund. You really have no choice with a mutual fund other than to buy the entire fund or not. If you take issue with one or two equities that are in it, too bad. It’s all or nothing.
With our portfolios, technically called Separately Managed Accounts, you know exactly what is in your portfolio at every moment. Essentially, our portfolios are collections of stocks that we consider a very good mix to achieve your financial goals. Ultimately, though, you could decide to remove or add stocks to the portfolio at will. Why? The obvious example is the USCCB Guidelines don’t actually exclude companies involved in alcohol, but many people are reluctant to invest in them. So if Brown Forman appears in your portfolio and you want it out, we can make it happen. If it appears in a mutual fund, you’re out of luck. Or maybe you just really want to own stock in a specific company. We can add it to your portfolio. You can’t do either with a mutual fund.
There are other reasons why an investment portfolio is better than a mutual fund (oftentimes lower fees, no double dipping on fees, no or smaller cash reserve, potentially better tax implications, the list goes on…), but, as investors, we find it’s most important to have that granular control over what stocks are in and which are out.
Is It Harder to Get Started with an Investment Portfolio than with a Mutual Fund?
Yes and no, depending on how you look at it. With a mutual fund, you really can just go buy one off the shelf, so to speak. You load your money into it, pay its high fees and hope it doesn’t support abortion.
With our investment portfolios, you get to talk to us first. We then do all the hard work to create your portfolio. All you have to do next is put money into your portfolio, just like you’d do with a mutual fund.
So, there’s an extra step involved, but it’s not difficult and you actually get to work with a real human being to create the portfolio.
Here’s an easy way to think of the difference: buying a mutual fund is like buying a grab bag at a store where you don’t really know what’s in it and you cannot return or exchange individual items. An investment portfolio is like buying a basket of items put together by a professional based on your input, you know exactly what is in the basket and have the ability to add or remove items at will.
If you’re still not sure if you’d be better off with a mutual fund or an investment portfolio, reach out to us. As fiduciaries, we actually have a legal obligation to tell you what we think would best serve you. We, and the SEC, take our obligations as fiduciaries very seriously. So, don’t worry, we have to tell you if a mutual fund is a better way for you to invest. Unless we want to get into trouble with the securities regulators. Which we don’t.
What Is a Catholic Investment Portfolio?
At first glance, a portfolio built upon Catholic values looks similar to a “normal,” non-Catholic one. Both select stocks carefully chosen to build an investor’s wealth and may even contain some of the same equities. Upon closer inspection, though, the Catholic portfolio is fundamentally different.
Catholic portfolios are driven by more than the relentless pursuit of money.
Maximizing the return on investment and building wealth are important goals for Catholic portfolios. Summit’s Catholic funds have a history of outperforming non-Catholic funds. But that’s not what sets us apart. Our portfolios aim to create positive change in the world. The equities we choose scrupulously avoid companies involved in morally evil activities, as the USCCB guidelines state.
You can be sure your investment dollars will never fund an activity contrary to the Catholic moral law.
More than just avoiding problematic investments, Summit actively works to bring the light of Christ to the financial world. We engage in high-level advocacy work to engage and change corporate practices. Because of our advocacy work, a major healthcare operation stopped providing abortions. Children are no longer forced to pick cotton for use by Fortune 500 companies. The world is a better place because of our high impact Catholic investment practices.
Our Catholic Financial Advisors Ensure Your Money Never Supports the Following:
Catholic investors no longer need to struggle with the morality of their investments. By investing with Summit, you will be in complete compliance with the USCCB’s guidelines. Transform your portfolio from a simple wealth creation tool to a powerful vehicle for doing good.