OneAscent President on Company's Value-Centric Approach to ETFs

Nicole (0:00)

Cole Pearson is with me, president of One Ascent. Cole will tell us a little bit first. I'd like to know a little bit about One Ascent. Tell me more.

Cole Pearson (0:08)

Yeah, sure, Nicole, thank you. Over the last 10 years, we've really been developing an ecosystem for high conviction, faith aligned advisors and investors who want to integrate faith into their finances. So that does include ETFs, but it's more than that. There's technology to help with planning, to help with giving, a platform for independent advisors, and of course, investment products as well.

Nicole (0:30)

Okay. I hadn't realized the details and the fundamentals behind this company based in Birmingham, Alabama. That's right. So as we get to the ETF portion of the company, you have multiple ETFs here. But we have a big focus on value, as you said, but you don't have to sacrifice performance. Talk about that. Do people think that?

Cole Pearson (0:48)

Yeah, that's absolutely an assumption that we hear often, but we have proven that that's not the case.

That if you include your values in your investment decision-making process, that does not mean you're going to underperform. It doesn't mean you're going to outperform either. You've still got to be a great investor, but you can do that. You can be intentional about your capital, and you can also generate strong results.

Nicole (1:11)

At this point now, I know you have different ETFs that you brought to us today. How have you and your team felt about the market? I'm sure you have a lot of clients that call when you have a sell-off. We were just having a great conversation, for example, about the memory stocks.

The group there, they were talking about buy the dips because the AI buildout isn't stopping. So when we dip, don't particularly worry, or maybe spread out how you're doing this was what the other guest said. Chris Ward was more in the spread out category. Sure. Let's talk about what kind of questions do you get when people are looking, I know we're going to talk about domestic and abroad. What kind of questions are people asking you these days?

Cole Pearson (1:48)

Yeah, we get many of the same questions.

However, the investors that we tend to serve, they view themselves as long-term owners. So it's not just trading, what do I need to get in and out of, but they've invested with us and we're investing for them because they believe in the companies that they own and that we own through our funds. So they tend to take a longer term view, allows us to smooth out some of the ups and downs in the day-to-day volatility because they believe that at the end of the day, the companies they own are definitely not misaligned with their values, but they also are bringing blessing to the products and services that they provide.

Nicole (2:24)

So let's talk about the ETF suite here. You have a large cap and a small mid cap fund. Those are two different ETFs. Let's talk about those. What kind of names are you putting in there? How many names go in? How often do you rebalance?

Cole Pearson (2:36)

Sure. On the domestic side, we use what we call an index-based approach. So we are trying to mimic the risk and return of the index, but without holding all the same companies. For example, large cap, most of the assets are either benchmarked to or tracking the S&P 500, right?

Nicole (2:52)

Right.

Cole Pearson (2:53)

And so for values-based investors though, they might look at the S&P and say, that's actually not my standard and maybe it's a poor standard for the values reasons. So OALC, our large cap fund, we get to down to about 200 companies. So 200 companies, not all are screened out for values reasons, but we can mimic the risk and return profile of the S&P 500, but only owning companies that align with our investors' values.

Nicole (3:17)

And then when we look abroad, you have an international fund and an emerging markets fund.

Cole Pearson (3:22)

Yes, we do.

So those two funds internationally, it's a little different.

There's some challenges with international investing. Our team has 20 plus years of dedicated international experience. So those two funds follow the same values-based process, but they're active. So in addition to the values-based methodology, we get to add a quantitative process and fundamental processes to ultimately get down to about 40 or 50 companies that really, but we believe are two things. They're great investments. Again, values-based investing is not concessionary. We are seeking to generate above market performance. So they're great investments, but they're also great businesses. Businesses that are doing great things either through the products, the way they provide great jobs, all kinds of things. So great investments that are also great companies.