Funds sporting religious names may not always answer to a higher power.
At first glance, two new mutual funds coming to market appear to be joining the ranks of morally responsible funds that align themselves with one religion or another. But a closer look reveals that neither has designs on a religious investment mandate, nor a desire to attract devout disciples.
The Church Capital Value Trust and Church Money Market Fund, managed by Church Capital Management of Yardley, Pa. registered its two new funds in mid-April. But this church group, has no affiliation with any particular church, except its founder Greg Church who is the president, CEO and chief investment officer of the advisory firm. Church Capital manages $744 million in non-mutual fund assets and, since October 2003, has been a subsidiary of Sterling Financial Trust, the bank based in Lancaster, Pa.
The name on the door may read "Church," but it's not that kind of church. "It is my last name," Church confirmed. "There is nothing nefarious about how we use the name, and we have never marketed to any religious affiliation. We hadn't even thought about it. But if someone asked, we would be honest and tell them that there's no affiliation," he assured.
After 18 years in business, Sterling Financial bought Church's firm, Church explained. "They were determined and committed to keeping that name because it has me behind it," he continued. That name continues to brand the firm's new mutual funds. "The folks at Sterling thought the name was great and had strength."
Unless your brand name carries the weight of a Vanguard or Fidelity, small funds often have a tough time garnering attention and securing shelf space. That can make a solid brand name that much more important for a fund group.
But when you have a religious name, but aren't a mutual fund with religious leanings, there's some explaining to be done much of the time.
The Vatican By Way of Memphis?
Another new fund may have set its sights high, but has no plans to seek divine intervention.
For now, the Pope Family of Funds, managed by Pope Asset Management of Memphis, includes only one fund. The Halter Pope USX China Fund was first registered with the Securities and Exchange Commission in mid-March, but became effective last week. Under a licensing arrangement, the fund will invest in a selection of stocks that trade on the Halter USX China Index.
Pope Asset Management was founded in 2000, and so far, the papal name has not been an issue, said firm founder William P. Wells, who took his maternal grandfather's family name of Pope as a tribute to him when he founded the firm. "It's a family name. We don't have any special dispensation from the Vatican," Wells quipped. "We sometimes tell people that we've got a special blessing, but they don't really believe us," he said. "Although it hasn't been an issue, people will sometimes ask where the name comes from, and we'll tell them."
Having a brand name that may imply a religious preference or affiliation "poses some additional hurdles for these funds, although their name may not affect what they are doing," said Tim Ross, principal of Kendall Ross Brand Development & Design of Seattle, Wa. In situations like these, it might make more sense for a fund advisor to name the fund "The Greg Church Value Fund," so as to clearly differentiate from a religious institution, and brand the fund more to the company's investment executive.
But there is a downside. "It can be difficult if an icon is built around the success of a person, versus the success of the company," Ross counseled. Some companies have successful leaders who become the personality of the company while others, although they have well-known leaders, could continue on just fine without that high-profile executive, he said.
Religious by Choice
Some mutual funds that have religious references have purposefully built those bridges and have seen similarly minded investors flock to their funds.
The Ave Maria Funds of Bloomfield, Mich., whose Latin name means Holy Mary, was named at the request of Tom Monaghan, the former head of Domino's Pizza who approached the folks at Schwartz Investment Counsel and suggested a mutual fund that followed the teachings of the Roman Catholic Church. The fund group which sports four mutual funds, now has $370 million in assets and 10,000 shareholder accounts, said Robert C. Schwartz, president and CEO of the fund's distributor, Schwartz Fund Distributors.
The fund's flagship Ave Maria Catholic Values Fund debuted in May 2001, with a sibling growth fund and bond fund following two years later. A fourth fund, the Ave Maria Rising Dividends Fund, just launched last month. The funds continue to attract both investors of the Catholic faith and religious institutions including Catholic charities, endowments, schools and universities, Schwartz said.
When a Profit Isn't a Profit
Of course it isn't just funds with religious-sounding names that must tread carefully so as not to mislead investors.
The Profit Value Fund, which has since dropped the "Value" from its name and became The Profit Fund, originally registered with the SEC in 1996. The fund is named after Eugene A. Profit, president of Profit Investment Management of Silver Spring, Md. the advisor to the fund.
When the fund was first registered, there was concern that investors might actually interpret the name "Profit" to mean financial gain, instead of realizing that it was just a family name, said Profit. So additional verbiage that pleased the SEC was added to the front page of the fund's prospectus: "The name Profit' is derived from the name of the founder and principal shareholder of the adviser, Eugene A. Profit, and is not intended as an indication of the investment objective and policies of the fund."
That language still appears today. "We didn't want to risk guaranteeing something," Profit said. "Branding in the mutual fund business as a small shop is hard to do."
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