Muslim Funds Are Rewarded for Their Faith
12/24/07 - 06:13 AM EST
Lawrence Carrel
The best performer of this four-fund family is the (NCBIX Quote - Cramer on NCBIX - Stock Picks)New Covenant Balanced Income Fund , up 4.6% year to date. Morningstar gives it three stars and classifies it as a conservative allocation fund. In this case, conservative refers to risk aversion, not political leanings. All four funds failed to meet their benchmarks last year. They appear on target to continue the trend in 2007.
For portfolios with Catholic values, look to the Ave Maria funds. These funds screen out all companies with any connection to abortion. This includes pharmaceuticals, hospitals and even health insurance companies, because they offer abortion-inducing drugs. Not surprising, pornography is also a no-no. So is investing in companies that provide benefits, such as health insurance, to non-married couples. George P. Schwartz, portfolio manager of (AVEMX Quote - Cramer on AVEMX - Stock Picks)Ave Maria Catholic Values (AVEMX), says the church believes marriage is a sacrament and that to offer these benefits is a slap in its face. While some might view this as an anti-gay investment screen, the funds don't discriminate. They don't want to support male-female couples living in sin either. Since smoking, drinking and environmental destruction aren't outlawed by the church, the fund doesn't screen out those companies. Still, this investment strategy severely narrows the population of possible holdings. Nearly 200 companies in the S&P 500 fail to pass muster. This has led the fund to invest in a lot of small-cap and value-oriented stocks. These two groups have provided a lethal combination of underperformance this year. Three of the family's four stock funds are underwater this year. The flagship $257 million Ave Maria Catholic Values has skidded 5.7% year to date. However, the (AVEGX Quote - Cramer on AVEGX - Stock Picks)Ave Maria Growth Fund (AVEGX) has posted a nice gain of 11.4% in 2007. Among Catholic Values Fund's top holdings are Legg Mason(LM Quote - Cramer on LM - Stock Picks), Pulte Homes(PHM Quote - Cramer on PHM - Stock Picks) and Citizens Republic Bancorp (CRBC Quote - Cramer on CRBC - Stock Picks).
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