This Faith and Finance podcast is underwritten in part by The Good Investor, a book by Robin John. This Faith and Work memoir hopes to inspire readers to view their work and investments as opportunities to honor God and bring blessing to the world. You can learn more now at goodinvestor.com. That's goodinvestor.com. What if investing could be about more than performance?
It could also be about purpose. Hi, I'm Rob West. More believers are asking whether their portfolios reflect their convictions and new tools are making that easier than ever. Today, Mike Schnackenberg joins us to talk about ETFs, stewardship, and how to invest in ways that honor God and serve the common good. And then it's on to your calls at 800-525-7000.
That's 800-525-7000. This is Faith in Finance, biblical wisdom for your financial decisions.
Well, it's a pleasure to welcome Mike Schnackenberg to the program. He serves as head of distribution at Eventide Asset Management, a valued underwriter of this program. And Mike, great to have you back with us. Great to be with you, Rob. Mike, let's start with the basics because the industry loves to throw acronyms around.
For someone who's heard the term but isn't quite sure what it means, just start by defining an ETF.
Well, Rob, you're right. We do love throwing acronyms around in this industry. An ETF is an exchange-traded fund. And what that means is it's essentially a vehicle. That can hold multiple stocks or bond issues in one ticker.
And what that allows for investors is diversification from owning dozens or even hundreds of underlying holdings, whereas you just have one exposure in a typical stock ticker investment. Yeah, it just makes it so convenient and really uh easy to invest. Why do you think ETFs have become such a popular choice for investors in recent years? Yeah, there's a few reasons. They do trade on exchanges like stocks.
So you can trade ETFs intraday.
So they're easy to access. Underlying holdings are transparent.
So there's typically full visibility of what that ETF is invested in. Cost is a part of it too, albeit a bit nuanced at this point. I think historically, investors have thought about ETFs as passive and just tracking a broad market index, which typically those passive options are very cheap. Increasingly, many active strategies are taking on the ETF structure as well. And that's purely just due to increased tax efficiency and some of those positive aspects that I talked about before.
Yeah.
Now you mentioned that many investors use ETFs as a way to invest passively by tracking an index. But from a faith perspective, Mike, is passive investing really neutral? Oh, this is a great topic, Rob. We could spend a lot of time on this. At evenside, we would say no.
You know, our belief is that every investment decision is an active investment decision. And that's really about. What type of impact do you want to have through your investing? And we've spent a lot of time thinking through as we invest on behalf of our clients. Where's the next dollar going to have the biggest impact?
And so, our belief is that investing is ownership. And so, even as a small percentage owner of a large company, You do have an ethical responsibility for the products and practices of that business. And the reason for that is. You do have a right to the profits and dividends from that business's products and practices. And so, what we're attempting to do is not simply passively.
Follow an index because you may get some good, but you are going to get a lot of bad in a passive index. But instead, how do we avoid? Areas that are problematic, that are leading to addiction, that are leading to destruction of life. And then shift our focus to identifying those that are most directly contributing to human flourishing. You know, even tied our tagline is investing that makes the world rejoice.
You know, we want to be unyielding in our pursuit of finding the. the companies, the products, the practices, they're going to solve the greatest unmet needs in the industry. Passive investing does not only not do that, but it also just exposes us to things that are antithetical to a Christian worldview. Yeah.
So that idea that this ownership of an index is neutral, it just doesn't hold up for the Christian investor, right? No, it isn't neutral. I mean, we are participating whether it's labeled passive or active. And I think, you know, this is an area of real excitement in the industry. Options have increased dramatically for faith-based investors, which is allowing faith-driven investors to really seek out ethical win-wins where they're getting the exposure from an investment standpoint that they're seeking, but ensuring that values are aligned in that pursuit.
That's well said.
Well, folks, when we come back, we're going to talk about how you can take a next step in this area. Perhaps there's faith-based investing options you don't even know are available to you right now. More with Mike Schneckenberg after this, and then your questions at 800-525-7000. Stick around, we'll be right back. Have you ever started a budget only to watch it fall apart a few weeks later?
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Faith in Finance is thankful for support from The Good Investor, a book by Robin John. In his book, Robin shares his journey from an immigrant child struggling in school to co-founder and CEO of Eventide Asset Management, a faith-based investment firm. This Faith and Work memoir seeks to inspire readers to view their work and investments as opportunities to honor God and bring blessing to the world. More information is available at goodinvestor.com. That's goodinvestor.com.
Uh Oh. What if investing could be about more than performance? What if it could also be about purpose? I'm Rob West. Joining me today on the broadcast, Mike Schnackenberg.
Mike serves as head of distribution at Eventide Asset Management and underwriter of this program. We're talking about the rise of faith-based ETFs. That's faith-based exchange-traded funds. These investment vehicles are exploding in popularity, and there are options now more than ever to align your investments using ETFs with your values. Mike, before the break, you were unpacking how we go about this.
Let's get even more specific. If someone wants their investments to align with their values, what should they be considering as they evaluate it? Yeah, so this is a big awareness story, honestly, Rob. I mean, I think for many faith-driven individuals, they just are unaware that this is an option. And so there is an educational piece here.
And so we're at Evenside, we want to be providing not just the investment products, but also the education around this movement that we're really excited about.
So, we've recently released a series of videos featuring our co-founder and CEO, Robin John, in conjunction with Right Now Media that are available on the Eventide Asset Management YouTube channel. These are short videos. They give you kind of an overview of the Eventide story, but really how that ties into the evolution of faith-based investing. Additionally, Robin wrote a book called The Good Investor, which has been a really great resource for those that are, you know, just really starting to think about this and starting to think what faith-based values alignment looks like in their investing. In conjunction with that, goodinvestor.com.
also has a screener tool. And essentially, what this allows retail investors or advisors to do is punch in any ticker, whether an individual stock or a fund, just to see what the underlying exposures are. And our focus there is on what we would consider kind of the big five problematic areas for many Christians, and that would be alcohol, tobacco, gambling, pornography, and abortion. At Eventide, we screen over 50 ethical areas, but we want this to be kind of a first step. This is a way to start and understand what you are exposed to and maybe where the problem areas lie.
And so that's a good place to start. Mike, I know you work with advisors every day. You also hear from investors. And it's pretty eye-opening when someone screens their existing portfolio to find out the companies or the industries they didn't realize they were contributing to. Isn't that right?
That's correct. And, you know, especially when we think about, you know, the S ⁇ P 500 or large and mega cap companies that are involved in many different areas from a product and practice standpoint, you know, there are some underlying issues that are really problematic. And honestly, some that we're not thinking about as much as we may in the future, you know, issues related to social media and some of the problems that's causing. You know, that's an area that we screen out at Eventide. But again, this is awareness and education and it's a process to really kind of understand and honestly get convicted about the opportunity, which we think is a great opportunity to find real congruence and alignment from a value standpoint across every area of your life, including investing.
Mike, you mentioned the awareness gap. Are you finding that many Christians just simply don't realize that faith-based investing options are available to them? Yes, I do believe that many Christians are not aware that this is an option. You know, I think for some Christians, there's also a question of that kind of active, passive nature of their investing. You know, is there a belief that investing is ownership?
For those that believe that, this is incredibly convicting and almost hard to look away from once you start to see the underlying issues. Yeah, there's no doubt about that. Let's talk about some of the solutions, Mike. Eventide Investments has long been known for values based investing. You all are really leading out in front of this space.
What are you now offering in the ETF space? Yeah, well, I appreciate those kind words. You know, we, as I mentioned earlier, our tagline is investing that makes the world rejoice. We are really unyielding in our pursuit of identifying those positive areas where a faith-driven investor can have a great impact through their investing while avoiding those problematic areas. And that is true across our ETF lineup as well as mutual funds and even our private fund business.
But the ETF business is really built on 18 years of. Deep thoughtfulness and faithfulness around what does scripture say about investing, and how can we bring a biblical worldview into the investment game? And to be clear, we want to win the investment game. We just choose to do so resting on unchanging biblical truths. And so the mutual fund business had carried Eventide for many years, but we understand that ETFs is a really attractive vehicle.
And so we've launched six. One is our Eventide high dividend, which is a fundamental kind of bottom-up active strategy. It's E L C V is the ticker. That's managed by our co CIO, Dolores Bamford. And then we have a lineup of five systematic ETFs.
And those really range from large growth, large value, small cap, broad US market and international. And what we're attempting to offer here is, kind of going back to our conversation about passive and is it neutral?
Well, I think we determined that indices are inherently values agnostic. And so it is difficult for a faith-driven investor, and I would argue impossible, to maintain their faith-driven values and biblical worldview in a traditionally passive ETF option. What we're looking to do is try and get as close as we can to the look and feel. Of a low tracking error passive investment, but while screening out You know, the problematic areas that we had mentioned before, and still leaning into embracing areas of great positive impact and value creation. And so those ETFs can all be found at Eventide Investments.com/slash ETFs.
Wow. Excellent. It's a compelling offering, and I'm so excited that it's available to our listeners.
Now, you've talked about a bigger vision here, not just about individual investments, but a broader impact.
So share a bit about that. Yeah, well, Kingdom Advisors, your team put out a survey that has been really resonating incredibly well in the industry. And it said that 22 trillion, almost half of all public equity assets in the marketplace, Are in the hands of church attending Christians. I think that's incredibly compelling. Because if you look at how much of that $22 trillion is invested in a faith-line manner, we're talking percent of a percent.
So this movement has not fully taken off yet. And when it does, the impact that we can collectively have, I think is beyond our wildest imagination. Being able to harness that capital into areas of true value creation. Not just by investing in a God-honoring way, that is great. The avoidance of some of these problematic areas is really important, but being able to unleash that capital and the power of that capital to opportunities that really can change the world.
You know, curative treatments and areas that are truly value-creating for the neighbors of a business. That's a really compelling opportunity that we're excited to be a part of.
Well, we are as well. We've got just about 30 seconds left. For someone who wants to take a next step, Mike, what would you encourage them to do? Yeah, so we mentioned the videos that we've launched on our Eventide Asset Management YouTube channel, which I would encourage any listener to go check out. Eventideinvestments.com has a lot of resources and hopefully a lot of thought leadership for someone who's interested.
And then I would really highly recommend goodinvestor.com. Please take a look at that screener tool, just understand what you own, and also would recommend the book, The Good Investor, for those that are looking to learn more. I couldn't agree more. Goodinvestor.com and Eventide Investments.com is the place to go. Mike, this has been really helpful.
Thanks for stopping by. My pleasure. Thank you, Rob. That's Mike Schneckenberg with Eventide Asset Management.
Now, more than ever, folks, we have an opportunity to align the resources God has entrusted to us with the values we profess. Go to EventideInvestments.com to learn more. All right, your calls are next at 800-525-7000. That's 800-525-7000. I'm Rob West, and this is Faith and Finance: biblical wisdom for your financial journey.
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Uh Hey, thanks for joining us today on Faith and Finance. We've got lines open. We're ready for your questions: 800-525-7000. Call right now. Let's go to Oklahoma.
Hi, Evelyn. Go right ahead. Yeah, I have a couple of retirement plans through actually through one account. And I'm needing some cash like quickly. Yeah.
Both of them, but there's only like nine thousand in each account, so it's like eighteen thousand. But they're wanting to withhold the twenty percent plus These So that's like $2,200 on each count. Is that normal? It is. Yeah.
So typically, you will have that withholding, you know, just because most plant administrators will require it. And you basically, that's just being sent to the IRS. It is going to be taxable to you at a minimum.
So it will be added to your taxable income.
So oftentimes, that 20% may not even cover the tax owed on the distribution. It's really a starting point more than anything. Are you under 59 and a half, Evelyn? No, I'm over.
Okay, all right.
So you're not going to have the penalty, but it is certainly going to be taxable, and this will just make sure that you've got a good head start toward paying whatever you owe.
Now, of course, if you don't owe as much as they're withholding, then you would get that back at tax time based on your federal tax rate.
So, you know, when you file your taxes, depending on your tax bracket, that would be the time that you get it back. But generally, you know, this is very common and often it is required. Oh okay. Yeah, unfortunately. Are there other options, Evelyn, where that you could consider?
I realize you said you kind of need this in a hurry. I don't know of any.
Okay. What what is it you're needing to do? Are these home repairs or something else? Yeah.
Personal issues. Yeah.
Yeah.
No worries. Very good.
Well, it's not unexpected. This is very typical. And, you know, it's just getting you started toward making sure you have something paid into the IRS so you don't get caught with a big tax bill. Hopefully, you'll get a little bit of that back, especially in this season of life where income is lower. Thank you for your call today.
In Ohio, Charles, go right ahead. Hi, how are you? I'm great. Thank you for your call.
So glad to talk to you.
Well, thank you for that. How can I serve you today, Charles? Yes. I have a policy, a life insurance policy that I've had since two thousand five. And the face value amount is for seven hundred fifty thousand dollars.
And I have I'm seventy four years old right now, and this policy completes at ninety one. When I'm 91. And from now till then, and I'm a very healthy individual right now. God blessed. with that.
But I look at the surrender value on it at sixty thousand dollars, and I wonder could I be using that more wisely by taking that I'm never going to see that money if I obviously live that long. But is that something that's even feasible or makes sense? Or It could. It certainly could. What type of policy is this?
What could you call it? It's called a universal life protector. I don't know if that helps you or not, but that's what the policy type is. Um that's pretty much all I know about it. Got it.
Okay. Yeah.
So that gives a little more context because these are usually designed primarily for the death benefit, not as an investment vehicle.
So it provides a guaranteed death benefit to a certain age. In your case, it's 91, has some cash value, but that's often secondary. And they're structured so the insurance coverage is the main value.
So the primary question becomes: is the death benefit still valuable to you and your family? Um, you know, so we've got to explore that always as you know, the primary consideration, and you know, if you're depending upon it because you need to protect a spouse, replace income, cover debts, you know, that's the reason we typically have insurance, especially during our working years. But if that need no longer exists, uh, then the policy may no longer be necessary, and in that case, accessing the cash value could be reasonable. Obviously, it's extending out with a pretty nice payout beyond typical life expectancy, which would be, you know, once you reach age 65 for a male in the U.S., you know, it's probably like 82. And so we're talking nine years beyond that.
So there's an elevated chance that, you know, this policy could pay out, and then it would be a death benefit either for a living spouse or to pass on to your heirs or that could be given away. And so, you know, we need to consider that that's a significant sum of money. Money. But, you know, if there are no heirs or estate goals or the premiums are burdensome or the cash value is significant, in this case, we're talking $60,000. And the question would just be: what could we do with that $60,000 over the next 17 years to get anywhere close to that amount of money?
We certainly wouldn't get there with a typical rate of return. But just given what I've shared there, what are your thoughts about surrendering this and the role it's playing?
Well, I'm debt-free now, so we're blessed with that. And we. Perfect. financially in good shape. I just wanted to look at that, and I guess I thought if we could invest that $60,000 over the next 10 years and uh you know recover that That would help, but I don't need it, I guess.
That's bottom of the line. I don't need it. Yeah, yeah, exactly. And I think that's the idea. What is the premium annually?
The premium annually of I don't have to pay for it. I mean, I stopped paying premiums. uh probably three or four years ago.
So I haven't paid premiums. But now now it's just pulling from the death from the cash value, isn't it? Yeah, and it and the cash in the yeah, and it goes down quickly. when they start pulling it out. Yeah, so right.
Because there's a lot of mortality expense there as you age to keep this policy in force. And so I would expect that that would be going down rapidly. You know, I think as we look at this, you know, with the seven, you said it was $750,000 death benefit.
So it's the trade-off between keeping the guaranteed benefit versus the future value potentially of $60,000 invested today.
So you're 74, the effective return on that death benefit can be quite significant.
So for example, the current value today is 60,000 with a death benefit of 750,000 17 years. That's a large payout relative to the cash value. If we look at what that could reasonably grow to over an 8% return, it could be a quarter of a million dollars.
So I think the question is, you know, we know it's not going to get to the $750, especially tax-free, which is what that death benefit would be. And so you've just really got to look at the trade-off between what that could mean for your estate and heirs and giving versus, especially with longevity on your side, versus the quarter of a million dollars you could put to work and then make that call. I don't think there's a right or wrong answer here. I think it really comes down to which thing is most important. Hang on the line.
We'll talk a bit more. We're so thankful for our team here. Devin, Sandy, and Jim. Couldn't do it without them. We'll see you tomorrow.
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