"There's no SRI going on here at all," George Schwartz, CFA and president of Schwartz Investment Counsel, bluntly stated at the outset of the interview. "We do MRI."
For those wondering, SRI is obviously socially responsible investing, but MRI?
"Morally responsible investing," Schwartz said.
Although Schwartz is the manager of the Ave Maria Mutual Funds, he gets quite a bit of input, much of it from notable names. The funds' advisory board is a who's-who of high-profile Catholics; retired football coach Lou Holtz, Larry Kudlow of CNBC, pundit Phyllis Schlafly and philosopher Michael Novak are just a few.
The direction they give is what you'd expect with a fund that invests according to religious prescripts.
"We screen for a narrow focus," Schwartz explained. "Abortion is a big one, of course, so any company that performs abortions or donates to abortion providers is prohibited. That includes drug companies that make abortifacients, hospitals that perform them or insurance companies that pay for them. Investment is prohibited in any company that donates to Planned Parenthood, for instance."
Investment in embryonic stem cell research is also prohibited, though Schwartz was quick to point out that adult stem cell research is not.
"Lastly, any company that makes and distributes pornography is screened out, so that includes some hotel chains and the movies they offer," he added.
What about companies like HBO and some of the racier content they sometimes air?
"We have a number of screening service providers the board has approved that make those determinations."
He noted that companies screened out account for around 150 companies out of the benchmark Russell 3000, so the impact is not great, but it's nonetheless strict. The board's direction provides less room for movement on the issue than even that allowed by the United States Conference of Catholic Bishops. That organization states no more than 5% of a company's revenue can come from the mentioned topics in order to invest; for Ave Maria, it's zero.
