Globally Diversified Market Portfolios with Catholic Values
Investing for Catholics is a division of Index Funds Advisors, Inc. (IFA) is a fee-only Independent Financial Advisor (ifa), registered with the United States Securities and Exchange Commission. IFA incorporated on March 5, 1999. As of November 2011, IFA has about 2,000 clients throughout the country and about $1.4 billion in assets under management.
Under U.S. law, investment advisors owe their clients an ongoing fiduciary duty to provide full and complete disclosure of all fees, conflicts of interest, and to exercise discretion in selecting investments with only their clients' best interests in mind. This is the standard under which Investing for Catholics operates.
Investing for Catholics provides its clients the ability to significantly improve their risk-adjusted returns by investing in globally diversified portfolios of passively managed no load index mutual funds that are screened for Catholic values. This allows investors to earn the superior returns of the markets and remain completely peaceful.
The Investing for Catholics strategy is specifically designed to enhance the wealth of its clients by investing their assets in risk-appropriate blends of passively managed funds that are low-cost and style pure.
The advice provided by Investing for Catholics is based on the highly respected research indexes designed by Eugene Fama and Kenneth French and documented in their empirical and peer-reviewed publications. The two professors rank high on total downloads per paper among 34.5 million downloads on the Social Sciences Research Network. Our current and independent advice incorporates 83 years of IFA Indexes and IFA Index Portfolio risk and return data, third generation index fund designs and 29 years of refined passive trading techniques employed by Dimensional Fund Advisors (DFA.) IFA does not accept payments from DFA or from any other recommended investments. IFA and Investing for Catholics have a fiduciary duty to our clients and are exclusively paid by those clients for ongoing advice on the optimal wealth management of their assets. We can assist clients in establishing and evaluating relationships with estate planning attorneys, independent insurance advisors, and accountants.
IFC plays several roles in the process of providing investment advice. They may be summarized with these seven roles:
- The Expert: You need an advisor who can provide expertise in assessing the state of your finances and developing risk-appropriate investment strategies to help you meet your goals.
- The Independent and Fiduciary Voice: The global financial turmoil of the past years has demonstrated the value of an independent , objective and fiduciary voice in a world full of product pushers and salespeople, who get paid by product providers and do not have a fiduciary duty to their clients. Here are five fiduciary principles.
||Putting the client’s best interest first.
||Act with prudence; that is, with the skill, care, diligence and good judgment.
||Provide conspicuous, full and fair disclosure of all important facts.
||Avoiding conflicts of interest.
|Fully disclose and fairly manage, in the client’s favor, unavoidable conflicts if any.
- The Listener: The emotions triggered by financial upheaval are real. IFA will listen to your fears, seek out the issues driving those feelings and provide practical long-term answers.
- The Teacher: Getting you beyond the fear-and-flight phase of investing often is just a matter of teaching you about risk and return, the power of diversification, the importance of asset allocation and the virtue of discipline. With IFA's extensive investor education program, we have a unique set of tools to be your teacher.
- The Architect: Once these lessons are understood, IFA becomes an architect, helping you to build a long-term wealth management strategy that caters to your own risk capacity and lifetime goals.
- The Coach: Even when the strategy is in place, doubts and fears will inevitably arise in your mind. At this point, IFA becomes a coach, reinforcing academic investment principles and keeping you on track.
- The Guardian: Beyond these roles is a long-term role as a fiduciary, a lighthouse keeper or guardian, scanning the horizon for issues that may affect you and keeping you informed.
Key Investing for Catholics Advisors
Mark T. Hebner
|Mark Hebner is the founder and President of Index Funds Advisors, Inc. and Investing for Catholics, author of the ifa.com and indexfunds.com web sites, and the book, Index Funds: The 12-Step Program for Active Investors. He has been nominated as the author of one of the three all-time greatest investment books, along with Warren Buffett and John Bogle. Mark's mission is to change the way the world invests—by replacing speculation with science. The many original paintings found throughout the pages of this booklet, as well as in Mark's book were commissioned by Mark to explain science with art, bringing interest, emotion and color to a subject that is most often presented in a lackluster manner. Mark's passion and commitment have made him a favorite lecturer on the subject of investing, and he is also considered the leading internet provider of information on investing.
|Mary Brunson is a Vice President of Investing for Catholics. A former financial writer/consultant to financial services providers, Mary learned firsthand the significant advantages of passive investing and shares the company’s high level of commitment to educate all investors on the Science of Investing. She embarked on the specific mission of Investing for Catholics to advance the financial educations of Catholic investors and institutions. Investing for Catholics was developed to counteract a pervasive lack of reliable information about prudent and risk-appropriate investing among Catholic investors, and an absence of passively managed index investments that adhere to the values that are in keeping with the Catholic faith. Mary is also a board member for the Magis Center of Reason and Faith, an institute spearheaded by Father Robert J. Spitzer, S.J., Ph.D. to explore and share the close connection between reason and faith as revealed by new discoveries in astrophysics and philosophy. She also is a member of the Marketing and Media Committee for the institute. Mary earned a Bachelor of Arts degree from University of California, Irvine. She is married and has four children.
Father Seamus Finn
|Father Finn has represented the Oblates at the Interfaith Center on Corporate Responsibility (www.iccr.org) in New York since 1988, and is the former Chairman of the Board for the Organization. He represents the Oblates on the executive committee of the International Interfaith Investment Group (www.3ignet.org). Fr. Séamus believes the active integration of the faith and values of the religious community into their advocacy efforts and financial investment decisions can be a leaven for promoting sustainable human communities. He also believes that faith communities can make a positive contribution to the search for innovative policy alternatives that allow the poor and marginalized to access the benefits of globalization.
|Harry Max Markowitz is an economist at the Rady School of Management at the University of California, San Diego. He is best known for his pioneering work in Modern Portfolio Theory, studying the effects of asset risk, correlation and diversification on expected investment portfolio returns. Dr. Markowitz is also the recipient of the 1989 John von Neumann Theory Prize. In 1952, Harry Markowitz developed the simple, but profound notion that investors must consider not only return, but the risk associated with their investments. Markowitz's ground-breaking discovery earned him the 1990 Nobel Prize in Economics, and sparked the financial revolution called: Modern Portfolio Theory. Markowitz is widely known as the father of Modern Portfolio Theory.
Father Robert J. Spitzer
|Father Robert J. Spitzer, S.J., Ph.D. is a an esteemed consultant to Investing for catholics, and serves as an Advisor on Ethical and Catholic Investments.
Following in the Jesuit path toward excellence through discernment in action, Father Spitzer possesses a strong track record of leadership across a broad range of areas of expertise. In particular, Father Spitzer is the recent former President of Gonzaga University, a position he held for 11 years. Father Spitzer is also the Founder and President of the Magis Center of Reason and Faith and the Spitzer Center for Ethical Leadership.
Father Spitzer assists the firm in the areas of stewardship and Ethics, which he taught at the Catholic college level for 20 years. He provides valuable communications in an effort to guide the firm, its clients and its friendship community toward the ultimate stewardship experiences that can be borne out of mutual trust, truth and transparency.
Also, drawing from the development and leadership experience garnered from his role as President of Gonzaga, Father Spitzer will have the opportunity to impart his breadth of hands-on experience to Catholic institutional investment committees, particularly in the areas of fiduciary obligation and prudence.
“As the former president of Gonzaga University and an active participant on its investment committee, I learned about ways in which Catholic institutions could effectively manage their endowment and retirement funds within the scope of their fiduciary responsibility. Along the way, I developed the awareness that passively managed funds would have significantly lower total fees than actively managed funds and would also be less problematic to administer. Further investigation led me to determine that passive investing is as competitive, if not more competitive than active management when it comes to reduction of volatility and rate of return. For these reasons, I am pleased to assist Investing for Catholics in their efforts to help Catholic institutions."
Click here to view Father Spitzer’s recent video on the financial crisis, ethics and the importance of fiduciaries.
IFA adds value through matching people with portfolios
carefully qualifying and quantifying 5 dimensions of an investor's
matching it to 5 dimensions of a portfolio's
. This process
produces investor-specific optimal returns by applying the IFA proprietary
. IFA obtains academically identified capital market rates of
returns for its clients from about 17,000 public companies in the U.S. and about
40 other countries around the world. IFA then designs highly tax-managed and low
cost trading strategies, maintains ongoing proper risk exposures through
rebalancing, manages cash inflows and outflows, and provides online
inception to date detailed measurements of client performance relative to the
IFA Indexes and other traditional benchmarks
. This ongoing reporting on
performance, gains, income and tax reporting is exclusively available at IFA and
adds significant value since measurement is essential to improvement. This
process positions our clients for an investment experience that optimizes the
trade off between risk and return, based on 81 years of historical index data.
The IFA Investment Principles:
Capitalism works on
average and over time. This statement might be explained by Hebner's
estimate that more than 100,000 public companies over 80 years have earned an
average annual profit about 10%/year. If companies or stockholders of those
companies desired capital, they traded their stock certificates for cash from
investors. Through this trade, stockholders gave up the stock's future return of
about 10% per year (currently 9.26%). That return has been driven up over
the last 80 years and 10 months by the average profits of those
simulated and actual S&P 500 companies. This is known as
the "cost of capital" and the cost of capital is paid
to the investors.
Risk and return have a positive correlation.
3. Free markets match prices to
current levels of uncertainty, so that buyers can earn a risk-appropriate return.
The greater the risk, the longer the time required to obtain
the expected return. Investors should capture the average return of all
stocks and the average return of a sufficient
number of months.
diversify to the maximum,
maintain a small and value tilt and keep
turnover, costs and taxes to a minimum.
6. Risk exposure must be initially matched to the investor's
risk capacity, then monitored and maintained through
7. Avoid capital gains and dividends and
realize losses in taxable accounts.
IFA manages brokerage, IRA, 401k
403b, profit sharing, and all other investment accounts. We also facilitate IRA
rollovers from 401ks and 403bs. IFA also provides investment advice to
individuals, trusts, corporations, non-profits, and public and private
institutions. For institutional accounts, please contact us directly
See our SEC public disclosures
The chart below shows IFA's growth of assets under management since inception in
IFA assists clients in creating and purchasing diversified portfolios of index
funds, primarily from Dimensional Fund Advisors (see
DFA Brochure.), Vanguard, Fidelity and Barclays Global
Investors (iShares). Dimensional Fund Advisors strives to deliver the
performance of capital markets and add value through portfolio design and
trading. The firm departs from the rules and rigidity of traditional index funds
and avoids the cost-generating activity of stock picking and market timing.
Instead DFA focuses on the dimensions of capital markets that reward investors
and they deliver them as intelligently and effectively as possible. Their
indexes tend to overweight small cap and value stocks, where expected returns
are greater. Over 1,000 Investment Advisors rated DFA as the
best overall company in the mutual fund business in
several surveys. We primarily use their funds to create
globally diversified portfolios of index funds. DFA funds are
only available to individual investors through DFA approved
investment advisors. IFA is approved for the purchase of DFA funds, but receives
no compensation from DFA or any other investments. For
institutional investors, we design diversified index manager portfolios to
minimize vendor concentration risk.
You may select Charles Schwab & Company (Asset
Financial Condition), Fidelity Investments or TD Ameritrade as the custodian
for your account. (see SIPC) If you already have an account with any of
these firms, you can easily assign your account to our Master Account
to become one of our clients.
We also have an IFA Advisor Network
program, where select financial advisors license the information and tools on
our web site for their prospective clients and existing clients. These advisors
have a license agreement with IFA and are approved to use the materials on this
site. Advisors without such an agreement are not authorized to use any of our
materials, including but not limited to, the investor education and asset
allocation tools. If your advisor is using these tools without authorization,
please take note of their ethics.