Eventide Asset Management Head of Distribution Michael Schnackenberg sat down with TheStreet’s Caroline Woods to discuss the framework Eventide uses to decide which companies create value, and which get screened out.
00:00 – Intro
00:00:25 – Biblical Investing
00:02:15 – Value Creation
00:03:50 – Industries to Avoid
00:05:30 – Performance Impact
00:07:15 – Beating the Market
00:08:06 – Gold Standard Company
00:09:18 – Demand & Trends
Transcript:
CAROLINE WOODS
Joining me now, Mike Schnackenberg Head of Distribution at Eventide Asset Management. Mike, thanks so much for joining us.
MIKE SCHNACKENBERG
Well thanks for having me, Caroline
CAROLINE WOODS
Mike, this is an interesting one because most investment products focus solely on returns. But even tide says it also cares about a company’s impact on the world. And you specifically take a biblical worldview. So explain how that philosophy works in practice.
MIKE SCHNACKENBERG
Yeah, absolutely. You know, I think even before diving into philosophy, we’ve identified a problem in the marketplace that we want to solve. And that problem is really around values misalignment. And what we found is that the vast majority of faith driven individuals are unknowingly investing in and profiting from the products and services that are causing the problems that in many cases, they’re they’re praying that God will solve.
MIKE SCHNACKENBERG
And we feel like that values misalignment is unnecessary and honestly has kind of been unique to investing in every other area of our lives. Our values are driving how we vote, how we how we give, how we parent. But we’ve effectively been intermediated or even divorced from our values within our investment portfolio. And so what we’re trying to do it, Eventide, is really promote a philosophy around investing as ownership.
MIKE SCHNACKENBERG
And as owners of a business, we have an ethical responsibility to understand how those products and services are creating value or detracting value. To your point, for the global common good. And so one way that we’ve done that is really think through how do you take a love your neighbor approach to investing. What does that look like? And for us we had to figure out who are the neighbors of a business.
MIKE SCHNACKENBERG
And so we’ve spent a great deal of time developing a framework called business 360, which is essentially identifying those six neighbors, which we would say our customers, employees, supply chain, host communities, environment and society. And then doing a deep assessment on how those underlying products and services are creating value or extracting value for each of those neighbors.
CAROLINE WOODS
Okay, so can you dig in a bit more about what qualifies a company as creating value for the global common good?
MIKE SCHNACKENBERG
Yeah, we believe that business has great opportunity for positive impact, and even in the faith based investing space, there are many, negative screened options which we believe is a great step forward. Even tied, you know, we take an avoid embracing engage approach. So we want to avoid any company who has products and services that are, again, detracting value from those, the neighbors of that business.
MIKE SCHNACKENBERG
But then we’re going a step further and saying, okay, if we’re going to root for what we own, what do we want to be investing in? Where can our next dollar have the greatest impact as we invest in the market? And so we’ve developed a team, a dedicated team of five, within our business 360 function that are coordinating with our fundamental active investment team.
MIKE SCHNACKENBERG
Really. And in hopes of becoming, you know, being in the top 1% of knowing these companies inside and out. And that’s beyond just the financials. You know, we believe to be excellent investors in this marketplace with such, information that is is everywhere and easily accessible. You really need to get into the qualitative non-financial aspects of a business to effectively understand culture, leadership, identify attributes that are going to be, pointing towards not just good performance, but pointing towards positive impacts for those that that business is trying to serve.
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