Saturday, June 24th, 2017

Performance

Performance

Put people and principles before profits.
-Truett Cathy, Founder, Chic-fil-a

Our Numbers

As of 03/31/2017 Year to Date 1 yr (simple) 3 yrs (annual) 5 yrs (annual) 10 yrs (annual)
American Hero Equity +3.50 +12.68 +8.23 +9.90 +7.32
American Hero Index +3.72 +17.19 +7.50 +10.83 See note #11
Wilshire 5000 Equal Weight
(Primary benchmark)
+4.16 +24.17 +5.38 +12.24 +7.37
S&P 500 Total Return +6.07 +17.17 +10.37 +13.30 +7.51
Dow Jones Industrial +5.19 +19.91 +10.61 +12.15 +8.25

Disclaimer

  1. Our primary goal is not investment performance but to help investors build a brighter America. We limit ourselves to investing only in American Hero Company stocks which make up a very small segment of the market. There are many other stocks which have better prospective investment merit but are not considered for our portfolios.
     
  2. Figures are shown as percentages (%).
     
  3. An allowance of .6% per annum (60 basis points) for fees and/or expenses has been deducted from both models which reflects an estimate of fees charged by American Values Investments. Most financial advisors will charge additional fees. No fees were deducted from the benchmark return figures.
     
  4. The primary benchmark is the Wilshire 5000 Index Equal Weight which contains over 6,500 stocks that trade in the U.S. including issues on the New York Stock Exchange (NYSE), NASDAQ Stock Market, and the American Stock Exchange (AMEX). It is often referred to as the 'Total Market Index' because it covers a wide variety of publicly traded companies. Performance assumes all dividends are reinvested; you cannot invest directly in the index. We use an "equal weighted" index as a benchmark because once each year we adjust all of our holdings so that each individual stock position represents an equal dollar amount (or close to an equal dollar amount) of the portfolio.
     
  5. We believe the Wilshire 5000 Equal Weight index is a reasonable benchmark on which to evaluate the financial effectiveness of our individual equity selections. The S&P 500 Total Return Index is shown to give an idea of how an "equal weighted" strategy might compare to some of the more traditional "cap weighted" indexes.
     
  6. The above figures were computed by a third party, Bridge Portfolio. They reflect the performance of our models which is not necessarily the composite performance of all accounts invested in these models.
     
  7. One, three and five year figures are annual percentage returns. The "since inception" returns are simple, cumulative returns.
     
  8. The figures are not audited and do not represent performance of individual accounts.
  9. The American Hero Equity Model is a concentrated (20-30 stocks) selected exclusively from the American Hero Universe, equal weighted representing at least 7 of 10 sectors as defined by Standard & Poor's. The stocks can range from small to large and from value to growth as defined by Morningstar. Any sector represented is at least 50% of the S&P 500 weighting and no more than 200%. No stock represents more than 5% of the model at initial purchase. The model is rebalanced annually. The stocks are selected based on a proprietary investment merit analysis based on 10 -15 fundamental matrices.
     
  10. The American Hero Index Model consists of the total American Hero Company Universe of 100-125 public companies. To be included in the American Hero Universe a company must score a minimum 400 out of 500 on a proprietary analysis of the company's corporate culture. The analysis focuses on the three key values of Integrity, Humility, Diligence, and Caring.
     
  11. As of yet, there is not a 10 year history for the American Hero Index Portfolio. But, the simple accumulative performance from the inception date of 12/31/2009 is 136.13%. Corresponding benchmark returns were Wilshire 5000 Equal Weight 124.28%, S&P 500 Total Return 146.98%, and the Dow Jones Industrials 141.24%.
     
  12. Past performance is no assurance of future results. Investing in equity markets involves risk; you could lose a significant portion or all of your original investment. All recommendations are based on our experience and may or may not have been profitable in the past, now or in the future. These performance figures may not reflect the impact that material economic and market factors might have had on our decision making if we had actually managed clients' account.

Country Performance

Here are just a few of the specific ways American Hero companies are performing for our country to build a better and brighter America.

1.  CenterPoint Energy sponsors programs that provide utility bill assistance for families in need, aiding thousands of CenterPoint Energy customers, including seniors, families with young children, and customers with disabilities each year. These programs are primarily funded through donations by customers.  CenterPoint gives the donations to local charities such as the American Red Cross, the United Way, and the Salvation Army to fund programs that help our neighbors manage their natural gas expenses.

2.  Covenant Transport operates more than 2,700 trucks and 7,000 trailerswith the pro-life message "It's not a choice; it's a child"

3.  Eastman Chemical has a Supplies for Soldiers program dedicated to bringing our soldiers some of the comforts of home. Created in 2009, the project was developed by a number of Eastman team members that had a passion to support the units of soldiers overseas that are somehow connected to Eastman. The company has historically proven to be a military friendly employer, and in 2012, Eastman made the move to adopt the Supplies for Soldiers project as a corporate initiative.

4.  Coca-Cola Bottling Co. Colidated's Purpose is "To Honor God in All We Do".  Their values include courage and conviction, honesty and integrity, humility, morality, and supportiveness. 

5. Grand Canyon Education Inc - Grand Canyon University - Christian Identity and Heritage - "Since our founding in 1949, Grand Canyon University (GCU) has been a Christian college with a biblically rooted mission. Founded as a Baptist university, today GCU is an interdenominational university that welcomes students from all backgrounds. Throughout its rich history, GCU has remained a vibrant Christian university that is committed to distinctively Christian beliefs, values and practices in accord with its mission and vision. While the university is clear about its identity as a Christian university and its foundational convictions, we are intentionally committed to living out the faith within the context of a missional community."

6.  October 4, 2016 - Waters Corporation - The Waters Corporation's ACQUITY® Arc™ System received a 2016 New Product Innovation Award from market research and growth consulting firm Frost & Sullivan.  Janani Balasundar, Research Analyst at Frost and Sullivan noted, "In the regulated environment in which pharmaceutical companies operate, they are by nature conservative when it comes to adopting new technologies, and they prefer "tried and trues" methods especially when it comes to latter stages of the drug development and commercialization process."  Janani continued, "With the ACQUITY Arc System, Waters has given pharmaceutical companies the capability of introducing a single LC platform for their workflows for improving analytical method performance and thereby productivity while maintaining CGMP compliance" .

7. October 4, 2016 - Myriad Genetics - The US Oncology Network selected Myriad Genetic Laboratories as its preferred provider laboratory for hereditary cancer testing. As part of the collaboration, Myriad and The US Oncology Network will work together to perform hereditary cancer research through the Genetic Risk Evaluation and Testing (GREAT) program within The Network affiliated practices. Under this program, the two organizations will collaborate to create a database that links patient outcomes with genetic test results. Principal among the research aims of this program is to better understand the genotype-phenotype correlation, gene prevalence, and research related to improving patient counselling and access to testing. The scale achieved by combining the largest hereditary cancer testing laboratory in the world with the more than 350 sites of care affiliated with The US Oncology Network will lead to unprecedented insights into the field of oncology..

8.  March 7, 2016 - Regeneron Pharmaceuticals was named by Fortune Magazine as one of "America's Best 100 Companies to Work For". Rapid growth, including the 2014 launch of the Regeneron Genetics Center and recent establishment of two Irish offices, has created new job opportunities and lots of interest. Regeneron entered 2016 with 157 job openings.  Regeneron's strong team of innovative scientific thinkers are leading the way in pioneering ways to improve the health of patients.

9.  August 23, 2016 - Mead Johnson Nutrition Company -  In response to recent flooding in Louisiana, Mead Johnson's sales representatives - as well as the doctors' offices and medical facilities they service - were the first source of help, as sample stock of products was provided to families and shelters in need. The company rushed more than 21,000 units of much-needed infant formula and toddler milk products to the Red Cross in Baton Rouge, and approximately 7,000 units to the United Way in Lafayette. Mead Johnson reminded its employees that it will match any contributions they make through recognized charities to provide relief to affected families.

10.  October 3, 2016 - Grand Canyon Education - Grand Canyon University's semiannual Serve the City Day is part of the largest Habitat for Humanity partnership in the country in which University volunteers hope to renovate as many as 700 homes in their community.  Nearly 300 Grand Canyon University students picked up paintbrushes, shovels, wheelbarrows and rollers and spend the day toiling for their neighbors in the Serve the City neighborhood revitalization event. 

 

Our Priority

Put people and principles before profits. 
-Truett Cathy, founder, Chic-fil-a

Financial performance is, obviously, an important aspect of investing. But is it the most important goal? Financial performance is important for business. But, again, is it the most important? Mr. Cathy’s comments have been instructive to us as an investment firm. We believe that, like Chic-fil-a, having a transcending purpose can, not only help investors have competitive returns, but also have a positive cultural impact.

There is no question that having a different purpose than money can have associated risks, as ennumerated below. It is up to the investor to decide if the risks outweigh potential benefits. Our goal of “investing for a brighter America” has the potential to produce these benefits:

  • Satisfaction of having a positive cultural impact
  • Being well-positioned for the long-term growth of values-driven companies
  • Calm in the midst of financial downturns
  • Enjoyment of being shareholders of specific American Hero Companies
  • Relief from the worry and stress that often comes with investing
  • Enjoyment and satisfaction of using your investment dollars to help you AND others.

Risks associated with

There is no question that putting principles before profits has the potential, especially in the short run, to produce less financial return for the investor. For more about risks associated with our strategies refer to the “Risks” portion of the “Performance” section.

Our Strategy has Practical Aspects

Our investment strategy is not merely “pie in the sky”, although that is part of it. There are plenty of logical arguments to support the premise that our strategy provides reasonable prospects for competitive returns. They include, but are not limited to, the following:

1. We believe, and there is evidence to indicate, that companies with higher ethical standards are likely to perform better over time.

2. Having a goal greater than financial performance helps us and our clients maintain course when the market gets troublesome. (Interestingly even though some mutual funds show excellent returns it is not always so for their clients, many of whom jump out when the market goes down and get back in when it gets higher which is exactly the wrong thing to do)

3. Longer-term investment strategies, like ours, have been often shown to have better performance than more active trading strategies. Obviously, that is the view of Warren Buffet.

4. Our diversification discipline offers balance during turbulent periods.

5. Investing in relatively few stocks, as the 24 in our managed portfolio, has been proven to be a good strategy by investment icons, Benjamin Graham, Warren Buffet and Phillip Fisher. One advantage is it allows more time to monitor those positions.

6. Our equal weighting and regular rebalancing prevents over-concentration and provides the opportunity for each stock to contribute to overall return.

7. Our remaining fully invested avoids the pitfalls of market timing and allows clients to be efficient in their asset allocation.

8. Our multi-cap blend portfolios provides the flexibility to use stocks with best investment merit and thus more likely to contribute positively

9. Our use of macro-economic analysis provides the opportunity to take advantage of market trends.

10. Our regular rebalancing provides a disciplined approach to buying low and selling high, and provides further protection from over-concentration.

Articles / Blogs

Article / Blog TitleSummary
The Economy and Equities Markets: Loaded for Now with Questions When the recent Brexit vote to jettison the European Union from Britain's list of alliances was cast, there was a quick agreement that the referendum clearly would doom at least western economies an...
London Merchant Adventurers Carter LeCraw Who would history say were the best investors of all time? Many familiar names come to mind like Warren Buffet who made billions for the owners of Berkshire Hathaway stock, Pete...
Investment Firms: Attention to Values American Hero News Shouldn't All Investment Analysis Include Attention to Values? David Lee Smith If there were a one-size-fits-all process for picking stocks, everyone's portfolio performance ...
London Merchant Adventurers Who would history say were the best investors of all time? Many familiar names come to mind like Warren Buffet who made billions for the owners of Berkshire Hathaway stock, Peter Lynch, the enor...
Quarterly - Tennessee Investment Firm looks for Values We hope you enjoy this expanded quarterly edition of our newsletter. The American Values Team April 2014 American Hero News Tennessee Firm Looks to the Underappreciated Role of Values...
Money as Master or Servant American Hero News Money as Servant or Master As a servant money can be used for all sorts of beneficial goods and services. It buys food, shelter, clothing, and more for us, our families an...
Quarterly-Economies with and without Churches We hope you enjoy this expanded quarterly edition of our newsletter. Topics are listed in the blue column on the left. Sincerely, The American Values Team January 2014 Ameri...
American Investor Priority Does it Matter? On April 12, 1861, Fort Sumter was attacked thus beginning the Civil War. On November 13 of that same year Reverend Mark Watkinson of Ridleyville, Pennsylvania, wrote a letter...
Might for Right I distinctly remember, as a teenager, pensively lingering in the Fox Theater in Atlanta, Georgia after viewing the original musical version of the movie, Camelot (released in 1967). I was young, ide...
Hobby Lobby Hobby Lobby is wonderful example of how faith and values can combine to shine a bright light in America's marketplace. The company has been hugely successful with over 500 stores in 42 states. A...

Important Disclaimer / Risks

The people or companies we have featured in our articles may or may not endorse our company. They may or may not agree with our goals or investment strategy. The views presented in this publication may not always reflect the current opinion of American Values Investments on the values or the prospects for investment performance of any company mentioned. Each of our stock holdings performs differently and it should not be concluded that all of our stock selections have performed as well as the ones mentioned. Our goal is first to support companies that best reflect authentic American values and only then seek market competitive returns. We reserve the right to buy or sell any stock from our current portfolios or add or subtract companies from our American Hero Universe. Investing in stocks involves risk including the loss of principle. American Values Investments research criteria limit the number of stocks available for investment. Stocks eliminated may have potential for higher returns. Companies acting on higher ethical standards may sacrifice short-term profits, which could be reflected in lower stock price. Investors should carefully consider their investment objectives, risk tolerance, and the expenses of investing in our portfolios. Past performance is no assurance of future results.

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