INVESTING WITH FAITH

Supreme Director Anthony Minopoli, chief investment officer, discusses the mission and growth of Knights of Columbus Asset Advisors

Pope Francis has observed, “At the base of economic and financial crises there is always a conception of life that places profit first, and not the person.” Ethical investing that places people first not only upholds human dignity and the common good — it is also good business.

Since its founding in 1882, the Knights of Columbus has helped to protect the financial future of members and their families. It has grown to become a Fortune 1000 company with a top-rated insurance program and billions of dollars in assets under management — all while screening investments for Catholic compliance and donating profits to charities that serve the community and strengthen the Church.

Leveraging its investment team’s decades of experience and history of strong performance, the Order established Knights of Columbus Asset Advisors LLC, an SEC-registered investment advisor subsidiary, in 2015. “K of C Asset Advisors,” Supreme Knight Carl A. Anderson explained, “will be in a unique position to provide a high-quality service to institutions that seek security, stability and Catholicscreened investment options.”

Five years later, Knights of Columbus Asset Advisors serves hundreds of shareholders, helping to strengthen and support Catholic communities through ethical, faith-based investment strategies. Supreme Director Anthony V. Minopoli, chief investment officer and president of Knights of Columbus Asset Advisors, recently spoke with Columbia about the initiative.

For more information, visit kofcassetadvisors.org.

COLUMBIA: Why was Knights of Columbus Asset Advisors created?

ANTHONY MINOPOLI: Knights of Columbus Asset Advisors was created to make the Order’s Catholic investment experience, built over more than a century, available to Catholic investors. We have been providing first mortgage loan financing to churches since 1896. Many of those borrowers asked if we could also manage their assets, given our understanding of church finances. That experience, coupled with feedback from a Catholic investment conference we hosted in 2011, convinced us of the need for a fully Catholic firm with demonstrated investment capabilities.

COLUMBIA: How do funds managed by KoCAA differ from standard investments?

MINOPOLI: Our investments strictly adhere to Catholic teachings, following guidelines on socially responsible investing that were first published by the U.S. Conference of Catholic Bishops in 2003. Practically speaking, this means that we exclude from our portfolios companies that fund things that are contrary to Catholic teaching, such as abortion, pornography and embryonic stem-cell research. It has not been difficult for us to apply these principles because Catholic teaching has informed our investment practices for many decades, long before the bishops’ guidelines. It really is part of our DNA.

COLUMBIA: How does KoCAA fit into the Order’s mission and Father McGivney’s founding vision?

MINOPOLI: KoCAA very much fits into Father McGivney’s vision to improve the financial security of Catholic families as well as the Knights’ mission to support of the Church. We seek to help Catholics grow their assets so they can care for their families and communities. In stark contrast to many Wall Street firms, our profits — as a wholly owned subsidiary of the Knights of Columbus — enhance the charitable mission of the Order. We seek to provide not only strong performance and competitive fees, but also compliance with Catholic teachings and support for charitable causes and the Church.

COLUMBIA: Over the past five years, how has KoCAA grown and developed?

MINOPOLI: We began trading six mutual funds in 2015 with seed capital from the General Account and some of the Knights of Columbus charitable entities. By the end of 2019, we had grown to nearly $800 million across nine strategies, including active and passive equity, fixed income, global real estate, and long/short equity funds. With the acquisition of the institutional business of Boston Advisors, our equity subadvisor, in late 2019, new products and relationships have added $1.6 billion in assets to KoCAA.

We have more than 300 discrete shareholders in the mutual funds, and about 60 more in other strategies. We are honored to have been entrusted with assets from more than two dozen dioceses, roughly 15 religious orders, and perhaps most proudly, more than 100 state and local Knights of Columbus councils.

COLUMBIA: Are KoCAA investments available to individuals as well as institutions?

MINOPOLI: Investments are currently available to institutions, including dioceses, parishes, schools, religious orders and hospitals.

Later this year, we plan to begin offering our mutual funds to individual Knights, their families and other investors through the Order’s well-established field force.

We firmly believe that our mutual fund family can complement the excellent annuity program that the Knights has had for many years. For example, a member will be able to meet with his field agent to talk about life insurance and long-term care, and also discuss other retirement investment needs. A blend of guaranteed income from our fixed annuities can meld well with the potential growth of our mutual funds as the member ages through retirement.

The Knights of Columbus remains first a protection company focused on life insurance, long-term care, disability and annuity needs for our members and families. However, we also recognize the need for investment vehicles and hope to make Catholic investments available to all.

COLUMBIA: What investment options are available to clients?

MINOPOLI: When the program began, we offered two fixed-income funds — a Limited Duration Fund and a Core Bond Fund. In simple terms, a limited duration fund and core bond fund differ in what bonds they invest in, based on how far away they are from maturity. On the equity side, we started with large-cap growth, large-cap value, small-cap core and international equity. With these original six funds, we could create asset allocation strategies to meet the risk tolerances of investors from very conservative to aggressive clients.

In late 2019, we launched three additional funds to offer investors even more diversification and flexibility.

Our new Long/Short Equity Fund seeks to reduce volatility and equity risk by both owning stocks we like (the “long positions”) and selling stocks that we don’t (the “short positions”). Essentially, the strategy seeks to profit from both those stocks that increase as well as those stocks that decrease in value.

We also created a Global Real Estate Fund that invests in stocks of global companies that are engaged as real estate operators — providing an opportunity to profit from both the growth of real estate securities and strong dividends.

Lastly, we created the Knights of Columbus U.S. All Cap Index Fund, which allows clients to invest in securities of the 3,000 largest companies in the United States after eliminating those that don’t adhere to Catholic teaching.

COLUMBIA: The Knights of Columbus Charitable Fund was established last year. How does that initiative fit in with KoCAA?

MINOPOLI: The Knights of Columbus Charitable Fund allows charitable givers to create a personal donor-advised fund. Contributors may be eligible to receive a tax deduction immediately on the full value of their gift, and may then direct donations over time to charities that do not violate Catholic teaching. The assets are invested in our family of mutual funds before distribution. The value can grow tax-free, and the entire amount is available to support charities. Before gifts are distributed, Knights of Columbus Charitable Fund reviews prospective charities in order to protect donors from inadvertently supporting anything that is contrary to Church teaching.

COLUMBIA: Can you tell us about any other future plans or goals for KoCAA?

MINOPOLI: With the team and processes we have built, the success of our five-year track record, and the early trust that we’ve earned from hundreds of shareholders, we are well positioned for growth.

We’re comfortable with the diversity and breadth of our product line, so we do not expect to add many new products in the foreseeable future. Instead, we are focusing on managing our current, high-quality products, attracting new investors and working more closely with our dedicated Knights of Columbus field agents to provide strong Catholic investment solutions for our members and the broader Catholic community.

We are excited about where we have been, but we are more excited about where we are going. It is truly a privilege to participate in the mission of the Order and to continue growing Father McGivney’s legacy.

Mutual fund investing involves risk. Consider the funds’ investment objectives, risks, charges and expenses carefully before investing. This and other information can be found in the funds’ full or summary prospectuses, which can be obtained by calling 1-844-KC-FUNDS or by visiting www.kofcassetadvisors.org. Please read the prospectus carefully before investing.

Knights of Columbus Asset Advisors LLC, an SEC-registered investment advisor, serves as the investment advisor to each of the Knights of Columbus Funds. The Knights of Columbus Funds are distributed by SEI Investments Distribution Co. (1 Freedom Valley Dr., Oaks, PA 19456), which is not affiliated with Knights of Columbus Asset Advisors or any of its affiliates.

Knights of Columbus Charitable Fund (“KCCF”) is an independent, nonprofit, public charity with a donor advised fund program. Various entities affiliated with Knights of Columbus provide certain investment management and administrative services to KCCF. KoCAA serves as the investment manager of KCCF and the assets are invested in funds managed by KoCAA. The value of an invested donation will fluctuate over time and may gain or lose money. Investing involves risk.