Mutual funds Get Religion With These 5 Funds

? INVESTING MUTUAL FUNDS ?

Get Religion With These 5 Funds

Faith-based investing doesn't mean you have to forgo profits. BY CAROLYN BIGDA

MUTUAL FUNDS THAT PRACTICE averages. The five funds de- management can't mess up,"

faith-based investing may be scribed here do not levy

Greenwell says.

no more exciting than a font sales loads and have deliv-

That strategy has paid

of still holy water or the

ered solid returns despite

off for long-term investors.

worn cover of a Koran. But their investing constraints. Over the past ten years,

over the years, these funds That should appeal to any Aquinas Value has delivered

have proved that you don't investor.

an annualized return of

have to sacrifice your spiri-

8.3%, edging Standard &

tual values when it comes

LKCM AQUINAS VALUE (SYMBOL

Poor's 500-stock index by an

to investing.

AQEIX) follows the guidelines average of 0.3 percent-

Faith-based funds invest of the U.S. Conference of

age point per year

according to a set of religious Catholic Bishops. The fund, and placing the

principles. Even if you don't which owns mostly large-

fund in the top

share these funds' religious company stocks, avoids firms 22% of its peers--

views, you may want to con- that deal with abortion, birth funds that focus

sider investing in some of

control and pornography, as on large-company

them because they have

well as certain weapons.

stocks with a

many of the attributes you'd Then comes the stock pick- blend of value and growth

ordinarily seek in a fund.

ing: Manager Paul Greenwell attributes (all returns are

Moreover, some analysts

looks for companies that

through July 31). But in

contend that investors who consistently generate a high the first seven months

take a faith-based approach return on invested capital (a of 2014, Value's

may reap bigger rewards

measure of the return a com- 0.9% return

than those who invest just

pany makes from each dollar lagged that of

for the money. "When you

invested in the business).

the S&P 500 by

have stronger ties to an in- "You want a business that

nearly five per-

vestment because it's also ex-

centage points.

pressing your values, you're

more likely to stick with it

for the longer term," says Jon

Value's light al-

Hale, who directs Morning-

location to two

star's North American

of this year's best-

fund research.

performing sec-

Be aware of a couple

tors--health care and

of negatives. In many

utilities--is mostly to blame.

cases, the religious

The fund excludes many

guidelines nix certain

health companies because of

industries, limiting a

the religious screen, and it

PRINTED fund's ability to diver- COPY FOR PERSONAL READING ONLY. typically avoids utilities be-

sify. And although fees

NOT FOR have come down, the DISTRIBUTION

cause they tend to have low returns on invested capital.

funds' expense ratios

Annual fees of 1.50% are

regularly top category

above average.

EDWIN FOTHERINGHAM

10/2014 KIPLINGER'S PERSONAL FINANCE

In 2008, Rising Dividend

dale says, biotech stocks can downturns. So has the

dropped 22.8%, compared be good diversifiers. "A com- fund's zero stake in banks.

with the S&P's 37% plunge. pany's fate depends on the In 2008, during the financial

And the fund, just under

next data release or govern- crisis, Income fell only

a decade old, is building

ment actions, not the econ- 23.5%. Annual fees are rea-

a solid long-term record.

omy," he says.

sonable, at 1.19%.

It earned 17.2% annualized

So far, Gilead's perform-

For a fixed-income fund

over the past five years,

ance has been divine. Over option, consider AVE MARIA

beating the S&P 500 by

the past five years, the fund, BOND (AVEFX). The fund applies

0.4 percentage point per

which launched in 2008,

the same Catholic principles

year and the average large- earned 21.3% annualized,

of its stock-owning sibling

company blend fund by 1.8 beating the S&P 500 by 4.5 to a mostly fixed-income

points per year. Annual fees percentage points per year portfolio. Bond currently

are a reasonable 0.93%.

and besting 98% of its peers has about 85% of its total

Beneath the broad

(funds that invest in ex-

assets in U.S. Treasury

umbrella of Christian-

panding midsize compa-

bonds and corporate bonds

oriented funds is EVENTIDE

nies). One drawback: Annual with strong credit ratings,

GILEAD (ETGLX). Managers

fees are 1.64%.

as well as cash. (Treasuries

Finny Kuruvilla and David

A number of funds follow are not subject to the reli-

Barksdale believe work

the principles of Islamic,

gious sieve, but corporate

done in the service of others or sharia, finance, including bonds are.) The rest of the

is blessed. So they look for AMANA INCOME (AMANX). Sharia money is in dividend-paying

firms that are sensitive to bars investments in com-

stocks. That adds risk to the

shareholders as well as to panies involved in alcohol, portfolio but has helped pad

AVE MARIA RISING DIVIDEND

internal stakeholders (such pork, gambling, pornography returns recently. Last year,

(AVEDX) takes a slightly differ- as customers and employ- or tobacco. It also requires for example, when interest

ent approach to investing ac- ees) and external stakehold- that investors avoid interest. rates rose after the Federal

cording to Catholic values. ers (communities and the One way manager Nicholas Reserve announced that it

The fund avoids companies environment). They won't Kaiser and deputy manager would begin winding down

with ties to abortion or por- invest in companies that

Scott Klimo deal with that is its bond-buying program,

nography (including hotels profit from alcohol, gam-

to eliminate banks and com- the Barclays U.S. Aggregate

that offer X-rated films in

bling and other potential

panies whose total debt adds index fell 2.0% (bond prices

guest rooms). "It is a zero- addictions.

up to more than 33% of their fall as rates rise). But Ave

tolerance policy," says co-

Although the managers

stock market value.

Maria Bond gained 6.1%.

manager George Schwartz. will invest in companies

Then Kaiser and Klimo

A stock market correction

(But the fund doesn't specifi- of any size, their fund tilts look around the world for

could drag down returns

cally ban weapons makers.) toward midsize firms (53% of companies that offer a divi- because of the fund's stock

Still, only about 150 of

assets). Barksdale says

dend yield higher than the holdings. So could a spike

the 3,000 companies in

smaller firms can pass faith- S&P's (currently 1.9%) and in interest rates. To protect

the Russell 3000 index are based screens more easily. can increase their dividend against the latter, Platte

disqualified on religious

"Very large companies have over time. Today, about 85% and co-manager Brandon

grounds. From there,

their fingers in a lot of pies, of the fund's assets is in U.S. Scheitler are keeping the

Schwartz and co-manager one of which is usually

stocks, and 15% is in foreign average duration of the

Richard Platte search for

something we don't want to stocks. In addition, indus-

fund's bonds to less than

businesses with rising sales, own," he says.

trial and health care firms three years (duration is

earnings and cash flow--

Barksdale and Kuruvilla account for about 40% of the a measure of interest-rate

all signs that a firm can

favor fast-growing busi-

portfolio. One top holding is sensitivity). The fund,

increase its dividend in the nesses, often in biotech and Swiss drugmaker Novartis, which yields 0.65%, charges

future. They prefer stocks technology. Biotech stocks which has raised its dividend 0.56% annually for ex-

that are reasonably valued stumbled earlier this year

17 consecutive years. The

penses, well below the aver-

PRINTED COPY FOR PERSONAL READING ONLY. and that they think can dou- when investors worried

stock yields 3.1%.

age of 0.88% for taxable, in-

ble over five years.

about lofty valuations (see

The focus on low debt has termediate-term bond

NOT FOR DISTRIBUTION The strategy has helped "The Best Health Funds to allowed Income to hold up funds. That is praiseworthy,

smooth out market swings. Buy Now," Sept.). But, Barks- especially well during

indeed. n

(#82964) Adapted with permission from the October 2014 issue of Kiplinger's Personal Finance. ? 2014 The Kiplinger Washington Editors Inc. For more information about reprints from Kiplinger's Personal Finance, visit PARS International Corp. at .

Ave Maria Rising Dividend Fund S&P 500? Index Ave Maria Bond Fund Bloomberg Barclays Intermediate U.S. Govt./Credit Index#

Total Returns as of September 30, 2017

Year to Date 9.49%

14.24%

3.07% 2.34%

1 Yr. 13.26% 18.61%

2.66% 0.23%

3 Yrs.^ 7.21% 10.81% 3.02% 2.13%

5 Yrs.^ 12.23% 14.22% 3.43% 1.61%

10 Yrs.^ 8.22% 7.44% 4.21% 3.64%

Since Inception^*

9.12% 8.70% 4.22% 3.56%

Prospectus Expense Ratio 0.93%

0.51%

^Annualized * Since Inception date for AVEDX is 5-2-2005 and 5-1-2003 for AVEFX. #Benchmark index to Ave Maria Bond Fund.

Performance data quoted represents past performance, which is no guarantee of future results. Investment return and principal value are historical and may fluctuate so that redemption value may be worth more or less than the original cost. Current performance may be lower or higher than what is quoted. Performance data reflects certain fee waivers and reimbursements. Without such waivers, performance would have been lower. Call 1-866-AVE-MARIA or visit for the most current month-end performance.

IMPORTANT INFORMATION FOR INVESTORS

AVEFX may also invest up to 20% of its net assets in equity securities, which include preferred stocks, common stocks paying dividends and securities convertible into common stock.

Schwartz Investment Counsel, Inc., a registered investment adviser established in 1980, serves as investment adviser for Ave Maria Mutual Funds and invests only in securities that meet the Funds' investment and religious requirements. The returns may be lower or higher than if decisions were based solely on investment considerations. The method of security selection may or may not be successful and a Fund's performance may underperform or outperform the stock market as a whole. All mutual funds are subject to market risk, including possible loss of principal. The Fund's investments in small- and mid-capitalization companies could experience greater volatility than investments in large-capitalization companies.

The investment performance assumes reinvestment of dividends and capital gains distributions. Performance data reflects certain fee waivers and reimbursements. Without such waivers, performance would have been lower. The S&P 500? Index is a capitalization weighted unmanaged index of 500 widely traded stocks, created by Standard & Poor's. The index is considered to represent the performance of the stock market in general. Indexes do not incur fees and it is not possible to invest directly in an index. AVEDX invests primarily in dividend paying companies and it is possible these companies may eliminate or reduce their dividend payments. AVEFX invests primarily in fixed income securities and as a result the Fund is also subject to the following risks: interest rate risk, credit risk, credit rating risk, prepayment and extension risk and liquidity risk. The Bloomberg Barclays Intermediate U.S. Govt./Credit Index is the benchmark index used for comparative purposes for this fund. Indexes do not incur fees and it is not possible to invest directly in an index. Request a prospectus, which includes investment objectives, risks, fees, expenses and other information that you should read and consider carefully before investing. The prospectus can be obtained by calling 1-866-283-6274 or online at . Distributed by Ultimus Fund Distributors, LLC.

200-51-011518



1-866-AVE-MARIA

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