SEI ’s two new funds invest based on Catholic social, moral principles

By Toni Weeks

San Luis Obispo, Calif., April 9 – SEI Catholic Values Trust gave details in a 497 filing with the Securities and Exchange Commission on two new funds – a fixed-income fund and a stock fund – that invest according to Catholic values.

The funds seek to make investment decisions consistent with the principles of the Catholic Church with respect to a range of social and moral concerns that include protecting human life, promoting human dignity, reducing arms production, pursuing economic justice, protecting the environment and encouraging corporate responsibility. This will be accomplished through the reliance on the principles contained in the U.S. Conference of Catholic Bishops’ socially responsible investing guidelines.

The funds’ investment adviser, Oaks, Pa.-based SEI Investments Management Corp., first evaluates potential investments for financial soundness and then according to each fund’s social criteria. It has retained a third-party environmental, social and governance (ESG) research firm to compile a list of restricted securities, using principles contained in the guidelines, in which the fund will not be permitted to invest.

Fixed-income fund

The Catholic Values Fixed Income Fund seeks a high level of current income with the preservation of capital. Under normal market conditions, it invests at least 80% of its net assets in a diversified portfolio of corporate bonds and other debt obligations of varying maturities, which may include floating-rate and variable-rate securities. It may also invest in securities issued or guaranteed by the U.S. government or one of its agencies or instrumentalities.

The fund will invest a significant portion of its assets in bonds rated within the four highest credit rating categories, attempting to maintain an overall credit quality rating of A or higher. Up to 20% of its net assets in bonds may be rated below investment grade, and the fund may also invest in bank loans in the form of participations and assignments of all or a portion of the loans from third parties.

Steven Treftz of SEI is the head portfolio manager. Each of the three subadivsers are also providing portfolio managers as follows: Jack Sommers, Bill O’Malley and Ed Ingalls from Income Research & Management; S. Kenneth Leech, Carl L. Eichstaedt, Mark S. Lindbloom, Michael C. Buchanan and Chia-Liang Lian from Western Asset Management Co.; and Leech from Western Asset Management Co. Ltd.

Annual fund operating expenses are expected to be 1.11% and include a 0.35% management fee.

The stock symbol is CFVAX.

Stock fund

The trust is also offering a stock fund, the Catholic Values Equity Fund (Symbol: CAVAX).

The stock fund seeks long-term capital appreciation and will invest at least 80% of its net assets in a diversified portfolio of common stocks and other equity securities, which may include preferred stocks, warrants, participation notes and depositary receipts. The fund primarily invests in securities of domestic companies but may also, to a lesser extent, invest in securities of foreign companies, including those in emerging markets. Although it may purchase securities of companies of any size, the fund generally invests in larger companies.

Gregory L. McIntire of SEI is leading the portfolio management team. As with the fixed-income fund, each of the subadivsers have their own portfolio managers, as follows: Lawrence G. Kemp from BlackRock Investment Management, LLC; Patrick S. Kaser, Paul R. Lesutis and James J. Clarke from Brandywine Global Investment Management, LLC; Montie L. Weisenberger from EAM Investors, LLC; Paul E. Viera from Earnest Partners LLC; Paul Bouchey and Thomas Seto from Parametric Portfolio Associates LLC; Joshua Schachter and Anne Wickland from Snow Capital Management, LP; and Eric Becker and Gus Zinn from Waddell & Reed Investment Management Co.

Annual fund operating expenses are expected to be 0.6% and include a 1.29% management fee.

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