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Morally Responsible Investing
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redbeard Offline
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Morally Responsible Investing
The other day I was talking with a member of my church and he mentioned that he only invests in an index fund that honors Catholic values.

I always wondered what the moral repercussions of investing were. Is it a sin to own stock in a company that enables abortion? After some discussion, it became clear to me that the answer is yes.

After that conversation, I set out to see what options were available for morally responsible investing. The two most popular vehicles are:

Global X S&P 500 Catholic Values ETF -

"The Global X S&P 500 Catholic Values ETF (CATH) provides exposure to the companies within the S&P 500 whose business practices adhere to the Socially Responsible Investment Guidelines as outlined by the United States Conference of Catholic Bishops (USCCB) and excludes those that do not."

As an ETF, the expense ratio is manageable (currently 0.29%) and on par with many of the ETF's you probably own from Vanguard.

You can see how they pick their investments here. They avoid any company that manufactures nuclear weapons, porn, contraception, and more.

Ave Maria Mutual Funds -

This one was recommended widely across the internet. As an actively traded fund, the expense ratio is much higher, around 0.9%. That might not seem like a lot to the man on the street, but over time this expense ratio will wreck your investment. The only time an expense ratio like that is worthwhile is if they greatly outperform the market.

Ave Maria has a few options. Their value fund (broad market) did not beat the market, but their growth fund did.

More information here: https://avemariafunds.com/fund-family/

Performance

As everyone's probably dying to know, how did these investments perform? Here's CATH, VOO (Vanguard S&P 500 ETF), AVEGX (Ave Maria Growth), and AVEMX (Ava Maria Value). Time frame is since CATH's inception. You can see that among the S&P 500 funds, CATH won. However, Ava Marie Value knocked it out the park.

   

It seems clear to me that CATH is a solid option for investing. If it outperforms standard ETF's, but avoids irresponsible investments, it's a no-brainer. This is not financial advice.
(This post was last modified: 12-03-2019 08:23 AM by redbeard.)
12-03-2019 08:20 AM
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Road_Less_Taken Offline
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Post: #2
RE: Morally Responsible Investing
(12-03-2019 08:20 AM)redbeard Wrote:  The other day I was talking with a member of my church and he mentioned that he only invests in an index fund that honors Catholic values.

I always wondered what the moral repercussions of investing were. Is it a sin to own stock in a company that enables abortion? After some discussion, it became clear to me that the answer is yes.

After that conversation, I set out to see what options were available for morally responsible investing. The two most popular vehicles are:

Global X S&P 500 Catholic Values ETF -

"The Global X S&P 500 Catholic Values ETF (CATH) provides exposure to the companies within the S&P 500 whose business practices adhere to the Socially Responsible Investment Guidelines as outlined by the United States Conference of Catholic Bishops (USCCB) and excludes those that do not."

As an ETF, the expense ratio is manageable (currently 0.29%) and on par with many of the ETF's you probably own from Vanguard.

You can see how they pick their investments here. They avoid any company that manufactures nuclear weapons, porn, contraception, and more.

Ave Maria Mutual Funds -

This one was recommended widely across the internet. As an actively traded fund, the expense ratio is much higher, around 0.9%. That might not seem like a lot to the man on the street, but over time this expense ratio will wreck your investment. The only time an expense ratio like that is worthwhile is if they greatly outperform the market.

Ave Maria has a few options. Their value fund (broad market) did not beat the market, but their growth fund did.

More information here: https://avemariafunds.com/fund-family/

Performance

As everyone's probably dying to know, how did these investments perform? Here's CATH, VOO (Vanguard S&P 500 ETF), AVEGX (Ave Maria Growth), and AVEMX (Ava Maria Value). Time frame is since CATH's inception. You can see that among the S&P 500 funds, CATH won. However, Ava Marie Value knocked it out the park.



It seems clear to me that CATH is a solid option for investing. If it outperforms standard ETF's, but avoids irresponsible investments, it's a no-brainer. This is not financial advice.

I am a big fan of socially conscious investing. I agree its ironic that people will talk the talk then have thousands invested in industries they are against.

While I'm not catholic I try to minimize investments in oil, mining, airlines and other industries that dis-proportionally harm the environment. These tend to be high risk sectors so avoiding them also makes sense from an investing standpoint.
12-03-2019 08:40 AM
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redbeard Offline
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RE: Morally Responsible Investing
(12-03-2019 08:40 AM)Road_Less_Taken Wrote:  I am a big fan of socially conscious investing. I agree its ironic that people will talk the talk then have thousands invested in industries they are against.

While I'm not catholic I try to minimize investments in oil, mining, airlines and other industries that dis-proportionally harm the environment. These tend to be high risk sectors so avoiding them also makes sense from an investing standpoint.

Active investing is difficult and 99% of people shouldn't be building their own portfolios (myself included!). If it works for you sure, but investing in index funds is generally an easier and smarter option.
12-03-2019 08:43 AM
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Dr. Howard Away
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RE: Morally Responsible Investing
try https://financialissues.org/ they try to do investing from a protestant perspective. I like it so far. There is also a mutual fund and eft company that does similar things to ave maria from a protestant perspective https://www.timothyplan.com/

Why do the heathen rage and the people imagine a vain thing? Psalm 2:1 KJV
12-03-2019 11:08 AM
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Arado Offline
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RE: Morally Responsible Investing
Doesn't this just create more profit arbitrage for those willing to invest in sinful companies? Unless you really believe in the long run that Catholic values-friendly companies on a fundamental level are more sustainable and profitable, or are comfortable with lower returns?

Not sure if looking at returns since 2016 is really a good metric. This entire market is a house of cards built on cheap money and debt fueled corporate buybacks.
12-03-2019 11:33 AM
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redbeard Offline
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RE: Morally Responsible Investing
Good share Dr. Howard. I gave Timothy Plan a scan. They seem to do a fair bit of due diligence and have some great info on their site.

Looks like their expense ratios are around 0.5% for ETF’s, which is in between Ave Maria and CATH. Their mutual funds charge a lot more though, above 1%. That seems small but if you look over the long term it’s a big difference.

For example I checked performance between CATH and TLVAX (Timothy Plan’s Mid/Large cap mutual fund). TLVAX charges 1.46% in expenses. Comparing from CATH’s inception in 2016, CATH returned 54%, TLVAX 40%. That’s a high price to pay to have additional eyeballs on your investments.
(This post was last modified: 12-03-2019 11:47 AM by redbeard.)
12-03-2019 11:47 AM
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RE: Morally Responsible Investing
I am trying to move away from Financial Investments and Products, although definitely some good ideas here.

I would say that real investment is the way to go. Property ownership, whether that is a house, truck, tools, things for your life. Going into business with a partner is also good, sometimes a little side business pays way more than an investment, especially if you take on the risk.

“Where the danger is, so grows the saving element.” ~ German poet Hoelderlin
(This post was last modified: 12-03-2019 12:03 PM by NoMoreTO.)
12-03-2019 12:01 PM
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Road_Less_Taken Offline
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RE: Morally Responsible Investing
(12-03-2019 08:43 AM)redbeard Wrote:  
(12-03-2019 08:40 AM)Road_Less_Taken Wrote:  I am a big fan of socially conscious investing. I agree its ironic that people will talk the talk then have thousands invested in industries they are against.

While I'm not catholic I try to minimize investments in oil, mining, airlines and other industries that dis-proportionally harm the environment. These tend to be high risk sectors so avoiding them also makes sense from an investing standpoint.

Active investing is difficult and 99% of people shouldn't be building their own portfolios (myself included!). If it works for you sure, but investing in index funds is generally an easier and smarter option.

Yes for sure indexing is so much easier. I am holding a bit of w.e shit I hate through a few of my index futures. Then for example my exposure to the energy sector is super low but I still had to buy oil futures to protect myself against inflation shocks exc..
12-03-2019 01:14 PM
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redbeard Offline
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RE: Morally Responsible Investing
(12-03-2019 12:01 PM)NoMoreTO Wrote:  I am trying to move away from Financial Investments and Products, although definitely some good ideas here.

I would say that real investment is the way to go. Property ownership, whether that is a house, truck, tools, things for your life. Going into business with a partner is also good, sometimes a little side business pays way more than an investment, especially if you take on the risk.



12-04-2019 07:34 AM
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redbeard Offline
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RE: Morally Responsible Investing
(12-03-2019 11:33 AM)Arado Wrote:  Doesn't this just create more profit arbitrage for those willing to invest in sinful companies?

I don't think you understand what arbitrage is.

Quote:Unless you really believe in the long run that Catholic values-friendly companies on a fundamental level are more sustainable and profitable, or are comfortable with lower returns?

Difficult question to answer. But, the numbers don't lie. Right now, it's possible to mirror the S&P without investing in bad companies.
12-04-2019 07:44 AM
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Diocletian Offline
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Post: #11
RE: Morally Responsible Investing
(12-03-2019 08:20 AM)redbeard Wrote:  The other day I was talking with a member of my church and he mentioned that he only invests in an index fund that honors Catholic values.

I always wondered what the moral repercussions of investing were. Is it a sin to own stock in a company that enables abortion? After some discussion, it became clear to me that the answer is yes.

After that conversation, I set out to see what options were available for morally responsible investing. The two most popular vehicles are:

Global X S&P 500 Catholic Values ETF -

"The Global X S&P 500 Catholic Values ETF (CATH) provides exposure to the companies within the S&P 500 whose business practices adhere to the Socially Responsible Investment Guidelines as outlined by the United States Conference of Catholic Bishops (USCCB) and excludes those that do not."

As an ETF, the expense ratio is manageable (currently 0.29%) and on par with many of the ETF's you probably own from Vanguard.

You can see how they pick their investments here. They avoid any company that manufactures nuclear weapons, porn, contraception, and more.

Ave Maria Mutual Funds -

This one was recommended widely across the internet. As an actively traded fund, the expense ratio is much higher, around 0.9%. That might not seem like a lot to the man on the street, but over time this expense ratio will wreck your investment. The only time an expense ratio like that is worthwhile is if they greatly outperform the market.

Ave Maria has a few options. Their value fund (broad market) did not beat the market, but their growth fund did.

More information here: https://avemariafunds.com/fund-family/

Performance

As everyone's probably dying to know, how did these investments perform? Here's CATH, VOO (Vanguard S&P 500 ETF), AVEGX (Ave Maria Growth), and AVEMX (Ava Maria Value). Time frame is since CATH's inception. You can see that among the S&P 500 funds, CATH won. However, Ava Marie Value knocked it out the park.



It seems clear to me that CATH is a solid option for investing. If it outperforms standard ETF's, but avoids irresponsible investments, it's a no-brainer. This is not financial advice.

Interesting idea, but something that's worth considering is looking at the companies that make up the index and seeing what groups they donate to. If this website is accurate https://familycouncil.org/?page_id=14547, then several companies in CATH donate to Planned Parenthood either directly or indirectly through third parties.
12-06-2019 05:17 PM
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kel Offline
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RE: Morally Responsible Investing
I want to do "morally responsible investing" by investing in actual businesses and projects, run by people I know and trust and wish to support, rather than investing in some corporation on the stock market. It's a lot harder to do, it takes a lot more work and searching and diligence, whereas the stock market offers the appeal of just flipping a switch and watching your money go up.

Anyone have advice on this first form of investing? It's a tough thing to jump into.
12-06-2019 06:18 PM
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Arado Offline
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RE: Morally Responsible Investing
(12-04-2019 07:44 AM)redbeard Wrote:  
(12-03-2019 11:33 AM)Arado Wrote:  Doesn't this just create more profit arbitrage for those willing to invest in sinful companies?

I don't think you understand what arbitrage is.

Quote:Unless you really believe in the long run that Catholic values-friendly companies on a fundamental level are more sustainable and profitable, or are comfortable with lower returns?

Difficult question to answer. But, the numbers don't lie. Right now, it's possible to mirror the S&P without investing in bad companies.

(12-04-2019 07:44 AM)redbeard Wrote:  
(12-03-2019 11:33 AM)Arado Wrote:  Doesn't this just create more profit arbitrage for those willing to invest in sinful companies?

I don't think you understand what arbitrage is.

Quote:Unless you really believe in the long run that Catholic values-friendly companies on a fundamental level are more sustainable and profitable, or are comfortable with lower returns?

Difficult question to answer. But, the numbers don't lie. Right now, it's possible to mirror the S&P without investing in bad companies.

Perhaps I'm misusing the term, but on a fundamental level if enough investors use any metric other than predicted future cash flow to purchase securities, then that creates an opportunity to buy assets on the cheap for investors without such moral constraints.

Eventually, enough investors will recognize the good deal and move in to buy the "non-Catholic" stocks, so that prices of assets with equal future cash flows will equalize. The original investors will have missed out on potential returns.

If the performance of your fund was that good then any hedge fund would also try to mimic the same picks that the Catholic ETF does.

Maybe they got lucky in the last three years but is the investment thesis really that "God-fearing" companies are going to beat the S&P? Again, cherry picking from the last three years of investment returns in such a manipulated environment doesn't seem prudent. I could be wrong but seems a bit risky and/or pointless given how small % of the S&P these “evil” companies are taking up.

Just looking at their top holdings, it includes Google and Facebook, which are far more responsible for spreading degeneracy than any single contraception or porn company. Coke destroys people's health. Amazon banned Roosh. The fund also invests in questionable companies like Goldman Sachs, Exxon, McDonalds, and “woke” Nike. Not to mention companies involved in selling opioids, trading with China’s communist party, or any other activity with questionable ethics. As Diocletian mentions, many of these companies likely have dealings or business with Planned Parenthood or other immoral organizations in some form or another.

Moral of the story - is it a smart investment decision, and does it really absolve you of contributions to morally dubious companies?
12-06-2019 09:29 PM
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Road_Less_Taken Offline
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RE: Morally Responsible Investing
(12-06-2019 09:29 PM)Arado Wrote:  
(12-04-2019 07:44 AM)redbeard Wrote:  
(12-03-2019 11:33 AM)Arado Wrote:  Doesn't this just create more profit arbitrage for those willing to invest in sinful companies?

I don't think you understand what arbitrage is.

Quote:Unless you really believe in the long run that Catholic values-friendly companies on a fundamental level are more sustainable and profitable, or are comfortable with lower returns?

Difficult question to answer. But, the numbers don't lie. Right now, it's possible to mirror the S&P without investing in bad companies.

(12-04-2019 07:44 AM)redbeard Wrote:  
(12-03-2019 11:33 AM)Arado Wrote:  Doesn't this just create more profit arbitrage for those willing to invest in sinful companies?

I don't think you understand what arbitrage is.

Quote:Unless you really believe in the long run that Catholic values-friendly companies on a fundamental level are more sustainable and profitable, or are comfortable with lower returns?

Difficult question to answer. But, the numbers don't lie. Right now, it's possible to mirror the S&P without investing in bad companies.

Perhaps I'm misusing the term, but on a fundamental level if enough investors use any metric other than predicted future cash flow to purchase securities, then that creates an opportunity to buy assets on the cheap for investors without such moral constraints.

Eventually, enough investors will recognize the good deal and move in to buy the "non-Catholic" stocks, so that prices of assets with equal future cash flows will equalize. The original investors will have missed out on potential returns.

If the performance of your fund was that good then any hedge fund would also try to mimic the same picks that the Catholic ETF does.

Maybe they got lucky in the last three years but is the investment thesis really that "God-fearing" companies are going to beat the S&P? Again, cherry picking from the last three years of investment returns in such a manipulated environment doesn't seem prudent. I could be wrong but seems a bit risky and/or pointless given how small % of the S&P these “evil” companies are taking up.

Just looking at their top holdings, it includes Google and Facebook, which are far more responsible for spreading degeneracy than any single contraception or porn company. Coke destroys people's health. Amazon banned Roosh. The fund also invests in questionable companies like Goldman Sachs, Exxon, McDonalds, and “woke” Nike. Not to mention companies involved in selling opioids, trading with China’s communist party, or any other activity with questionable ethics. As Diocletian mentions, many of these companies likely have dealings or business with Planned Parenthood or other immoral organizations in some form or another.

Moral of the story - is it a smart investment decision, and does it really absolve you of contributions to morally dubious companies?

The ETF has 200 odd millions in the market, I don't think it is affecting the pricing of any stock. This occurs in some cases, but short sellers will usually pick up on it to a degree..

I do feel like you bring up a good point. I mean fuck Facebook when it comes down to it, they have brought about more negative change than anyone. I actually think investors should minimize investments the S&P 500 as it is overweight tech in general.
12-07-2019 07:34 AM
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redbeard Offline
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RE: Morally Responsible Investing
(12-06-2019 05:17 PM)Diocletian Wrote:  Interesting idea, but something that's worth considering is looking at the companies that make up the index and seeing what groups they donate to. If this website is accurate https://familycouncil.org/?page_id=14547, then several companies in CATH donate to Planned Parenthood either directly or indirectly through third parties.

Great point and something I will take into consideration.

It begs the question of how much distance we should create between ourselves and sin. For example, if Planned Parenthood is federally funded, does that mean I should stop paying taxes? It's a difficult question.
12-07-2019 08:05 AM
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RE: Morally Responsible Investing
(12-07-2019 08:05 AM)redbeard Wrote:  
(12-06-2019 05:17 PM)Diocletian Wrote:  Interesting idea, but something that's worth considering is looking at the companies that make up the index and seeing what groups they donate to. If this website is accurate https://familycouncil.org/?page_id=14547, then several companies in CATH donate to Planned Parenthood either directly or indirectly through third parties.

Great point and something I will take into consideration.

It begs the question of how much distance we should create between ourselves and sin. For example, if Planned Parenthood is federally funded, does that mean I should stop paying taxes? It's a difficult question.

It is difficult, but here's how I approach it. I invest in a Vanguard index fund and several dividend stocks, so I know for a fact that some of the companies I invest in are contributing to organizations like PP and support deviant behavior such as homosexuality, but the amount of money being given to those groups is probably small and the benefits those companies bring to the world far outweigh the negatives of that support.

Take oil companies like BP or XOM--some people don't like them for their environmental impact, but without their products we wouldn't have modern transportation and thus things like ambulances, garbage trucks, etc. The same thing goes with JNJ--they manufacture some opiates, but that is a small part of their overall business which in general has been incredibly beneficial to society.

On the other hand, take tobacco companies. I can't really think of any redeeming values that cigarettes might have, and its a product that's highly addictive and leads to all sorts of disastrous health consequences. Since I'm in index funds I'm sure that some of my money is technically in Altria, but in practice that comes down to not much more than a tiny fraction of the money I have in that fund. I don't invest directly in tobacco stocks because that way I can at least control that certain part of where my money goes.

In sum, I don't think there is a perfect answer to the social aspect of investing, but the best you can do is know what you're investing in, consider the nature of the companies whose stocks you want to buy, and direct your money as best you can.
12-07-2019 12:09 PM
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