Considerations for Investing as a Catholic, Part 2

In my previous post regarding things Catholics should consider when investing, I spoke about one mutual fund family (Ave Maria Mutual Funds) as an example of a fund family that offers investments that abide by United States Council of Catholic Bishops (USCCB) guidelines.  There are certainly other fund families that abide by USCCB guidelines and I wanted to mention some of them here.

Note:  I do not currently have money invested in Ave Maria funds nor in any of the other fund families I am about to mention.  Yes, you’re right:  As a good Catholic, I should strongly consider moving my money to somewhere other than the Vanguard funds where my IRA money currently sits.  I am searching for a good Catholic mutual fund with low fees, so if you know of any, let me know!

Luther King Capital Management (LKCM) has the LKCM Aquinas Catholic Equity Fund (AQEIX) that abides by USCCB investment guidelines.  The fund, though, has consistently under performed its category average.  Its expense ratio of 1.50% makes it a very expensive fund to hold.

Epiphany Funds has three funds to choose from, all of which have high total expenses.  These funds are very small and this is likely the reason for the high expenses.  The Epiphany Fund family

Index Fund Advisors provides a list of Catholic index funds on its web site.  I do not see ticker symbols for these, so I am not able to judge their performance very well, although they appear to perform relatively well.  The expenses for investing with IFA appear to be significant (0.90% annually for accounts with less than $500,000, plus quarterly fees), so be aware.  I like the variety of target date funds IFA provides, as this makes it easier for investors of any age to find an index fund suitable for their stage of life and risk tolerance.

As I mentioned in Part 1, high expenses are the norm for Catholic mutual funds and are the price we pay, at least for now, to abide by USCCB guidelines. Until these Catholic funds gain more assets under management, these high expenses will likely continue.  In the meantime, if you choose to invest in any of these funds, give yourself a pat on the back.

USCCB Socially Responsible Investment Guidelines:  http://www.usccb.org/about/financial-reporting/socially-responsible-investment-guidelines.cfm

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