Episode 14 - Building a Faith Driven Fund on Wall Street with Bob Doll

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Today’s guest is one we’ve been excited about for a long time. Bob Doll is a leader in the faith-driven investing movement from his work at Oppenheimer Funds, Merrill Lynch, BlackRock, and now, Nuveen. 

You may have seen him on one of his frequent appearances on CNBC, and we were honored to have Bob join us last summer for the Faith Driven Investing gathering in Utah. The work he’s been doing for the best few decades has been instrumental in shaping the conversation this website is stewarding.

We owe a lot to Bob Doll and we’re excited to share the hard-earned wisdom his experience has yielded. As always, thanks for listening.

Useful Links:

Bob Doll’s 10 Predictions for 2020

Bob Doll on Faith and Finances

Maintaining a Christ-Like Attitude with Bob Doll

Episode Transcript

**Some listeners have found it helpful to have a transcription of the podcast. Transcription is done by an AI software. While technology is an incredible tool to automate this process, there will be misspellings and typos that might accompany it. Please keep that in mind as you work through it. The FDI movement is a volunteer-led movement, and if you’d like to contribute by editing future transcripts, please email us.

Henry [00:02:11] Bob, we're very grateful to have you on the show today. I hope we had time to cover as much of your journey as we possibly can, because I think it's a really powerful one. I know it's a really powerful one. I want to start with you, Tom. On Wall Street, some of audiences are retail investors are going to be familiar with Merrill Lynch, acid massage men and BlackRock in a lot of the places that you've been. But as we get started. Walk us through your journey and maybe some of the size and scope of the funds that you've been involved with, because I think that probably most of our listeners have interacted with some of the products that you and your teams have created at some point in time all along the way.

Bob [00:02:44] Yeah. First of all, thanks for having me on my professional journey. Henry started when I graduated from business school in 1980, and since then I've been on Wall Street. So next year we number forty hard to believe. Like many in this business, I started as an analyst, equity research analyst, disect ing companies figuring out what makes them tick. They make their money, got a break a couple of years and to be a junior portfolio manager. And that was my objective to manage money. I've managed U.S. large cap equities all my career at Citicorp and then at the Oppenheimer Funds where I did that, but also became CIO of Equities Chief Investment Office for the whole firm, was recruited to Merrill Lynch investment managers in 1999 and a couple of years became CEO of that business all along continuing to manage money. That was my trade. Always has been Lord knows, but probably always will be. BlackRock bought Merrill Lynch investment managers half a dozen years in and I worked there another half dozen years. And now I'm Nuveen, where I'm chief equity strategist. And guess what? A portfolio manager. So I spend time analyzing companies, creating portfolios, talking about markets, if you will, waving the flag for the firms I work for in the media and in the press more generally at the U.S. about scope. Again, all U.S. large cap, my team, my individual team and our peak, we managed $42 billion. But as CIO, I was responsible for over a trillion dollars of equity assets. And the firm BlackRock was the peak in assets of four trillion dollars under management. So it was a fair number of dollars to slosh around and be a steward of over those years. So it's been a great ride.

Henry [00:04:33] Oh, my goodness. That's right. I knew that when we were talking about Merrill Lynch asset management in some of these funds that I had not expected that it was as big as that. Trillion dollars is a lot of money to be responsible for. Tell me when a lot of our listeners think about Wall Street or at least let me tell you how I used to think that Wall Street, my introduction to Wall Street came back from I guess it was late 80s early 90s in the movie Wall Street. Michael Douglas in is Gooding Greed cuts through and captures the American spirit. And that, of course, is Bud Fox and the two phones. And it wasn't necessarily a place that would be known for maybe family values. You've been a Christian on Wall Street for a long time. Where are some lessons that you've learned from your time on Wall Street as a faith driven employee, faith driven leader, faith driven manager, and a guy that's driven by his faith and yet has real responsibility to run lots of people's money?

Bob [00:05:27] Absolutely fantastic. I wouldn't trade it for anything. I think like everybody who's a follower of Jesus Christ, you know, there are issues that come up that are easy to deal with and some that are harder. I think one of the beautiful things that I've enjoyed is the different types of people that I run into, other real strong believers that I can learn from and fellowship with some people who are totally and this will be the norm, totally apathetic to the things of God. Others respectful of the fact that somebody is a believer. And then, of course, you have those who under certain circumstances, particularly when you bring it to work, quote unquote, get a bit antagonistic. But as you point out, watching the movie, yeah, there's greed like any business, there's greed, perhaps a bit more of it than usual when you're dealing with money on Wall Street, but certainly manageable. And that's more the exception than the rule. At least that's been my experience. What I also enjoy is money's a topic that can lead to all kinds of discussions about who God is and whose money is it in the first place. So it's been a fertile ground for learning and. If you will.

William [00:06:36] That's great, Bob William here. I mean, I got a little off script here. I'm always fastenings hours and about the baggy prabhat. We must make rear end. A recently was talking to a younger person and they honestly felt like as a believer they couldn't go into investment banking. There was just a broken industry that had no redemptive value. I obviously don't believe that. And my question for you, as someone who's been in this for 40 years, what is sort of your restorative redemptive view of the financial markets in your case? Probably the public markets. What does that mean, that holy ambition that drives you to continue to work here and try to make it some part of bringing God's kingdom on Earth?

Bob [00:07:15] Yeah. So in money management or investment management more generally, a bit different from investment banking, of course, where it's, you know, one deal after the other. And you're not that investment management's now, but investment bank can be intense and tense hours. I guess what I would say is comes at various levels.

[00:07:32] You know, as I went through my career and realized that the money is not named money. It's not his money. It's not her money. It's all God's money. All of a sudden, the stewardship challenge just rises to an unbelievably phenomenal occasion. You know, I say to people, if the money I have were really mine, who cares what I do with it? Maybe I do. Maybe my wife does. But it's not mine. It's God's. And therefore, we have an unbelievably holy, if I can use that word, an awesome opportunity and responsibility to take good care of it. And as a money manager, I view it the same way if I'm managing somebodies money. Well, yeah, it's Joe Smith's money, but it's really God's money that Joe Smith happens to be a steward at that particular point in time. So whether it's, you know, helping Joe give more money away, that's that's the most beautiful. But also for Joe to have a retirement, for Joe to pay for his kids or grandkids education. All this is very motivational and I think a very high calling a man.

William [00:08:39] And as a money manager, we really able to have you out to an event we had, which our listeners might hear as reference. We hope that more we have done more widespread events where we're out in Salt Lake City with a couple hundred people and you challenged the table and kind of an exercise all the different tables to say, you know, what would it look like to create a fund that is faith driven? And of course, that elicits a lot of different responses from people. But maybe as you've had, you know, months removed from there. And also something I just know you been thinking about for probably decades. What does that mean to you? What does it come to mean you to have a a fund or a money management philosophy driven by your faith?

Bob [00:09:17] I first say that was an incredible event. In fact, I think I made the comment from the podium. Had you all tried to put something like that together 10, 15 years ago would've been a very small crowd. But the fact is, so many people are thinking and doing around these things, which is great. I think the interesting part to the specific exercise is everybody had a different answer. I don't know. The people's answers were contradictory to one another, but it just points out how faith driven investing is in the early days. We may never get to a standard, just like there's no giving standard where it says that you and Henry and I all have to give our money to the same place or have the same criteria. But it's the same principles, if you will. So when it comes to managing money, it's, you know, both what we're for and what we're against and hopefully what we're for and what we're against is what God's for and what God's against. The against things that's been going on for four years, if not decades. And, you know, abortion, pornography and then lots of other things get added. Depending on who you talk to, the more interesting and newer is, OK, what are we for yet? The flourishing of humanity, the flourishing of the business that you're investing in, the flourishing of the employees. Of course, that means lots of different things as well. Education, alleviation of poverty. Is there good governance in this business? How do companies treat their employees? You know, there's a whole long list of things one can think about. And of course, once you come up with a list to repeat, my list may be different from yours, but then it becomes an interesting exercise. Do you actually quantitatively score these things or is it a qualitative review? The same token, you're not going to ignore kind of the principles that got you there. I'm not going to want to buy a company that has great governance, but the earnings are gone straight down the tubes. Sure. I do not want to go to buy one that treats their employees really well. If the stock is selling at ridiculous valuations. So it's a combination. Can I save the sacred and secular things that we've all learned to appreciate?

Henry [00:11:27]  I also appreciate the plug for the event. Was awesome to have you there. Maybe close to 200 people showed up because you were a headliner.

Bob [00:11:34] That's not. I don't think so. I think it was your name, Henry that got them there.

Henry [00:11:38] But that's not the case. But one of the things that I think really is a great thing to underscore, and that is in this larger movement of faith driven investing, there are gonna be lots of different answers for how people might feel that they're hearing from God or learning from him in his word about how to deploy investment assets. And that's one of the things I think that we did agree on, which is how important the heart posture is. And that as we get down on our knees with our spouses and ask guy that he might lead us in the direction that we might steward assets are, we're going to come away from it. And we can have a different perspective than we had before that exercise about where we would invest. And yet some people might say, gosh, we really feel compelled to invest in solar farms in Nevada desert. And somebody else might say, I won't invest in publicly traded companies. They're run by crossfires. And someone else might say, I wanted your resident. Multi-family real estate was resident chaplains. And so there are no pat answers or a prescriptive way to go about asset classes. But it's the heart posture. And I love what you just said there, which is what are the things that God is for and what are the things that he is against? Let that be our guide in because he doesn't give you specificity. Then what that ends up meaning actually drives you. I think closer to him in trying to know him. Understand what does that mean or was that mean for you?

Bob [00:12:54] Totally agree. That's a great way to put it. And again, as I said, many of us have been on that journey in terms of where we give our money. And it's the same process. It's just nowhere for most people as to where we're going to invest our money. It's the same sort of principles and characteristics. And God and his word are the guide for both avenues. And just the one is newer to most people than the other.

[00:13:21] And as you hinted, it's not an event. You'll get down on your knees and get up after you've prayed and have the answer. It's a journey over time. As God matures us and puts us in directions and we interact with other people like we're doing on this call that informs us and takes us in directions, that is very exciting.

William [00:13:43] So when you talk about the for and against and do things against is very easy for a lot of people. I think you're right. There's a lot of controversy for gets a little more tricky. I love the way you laid that out as we're not all gonna be for the same things. God and his spirit manifest itself in different ways through each of us. And that's what builds a beautiful world. One of things I would love and it can be a particular company. Obviously you can iwa competed as to. But I'd love for you to walk us through maybe your analysis on a company and kind of what in your opinion makes maybe you something that was a little bit in the gray area or something that's a little hard to think through that you really took some time with and said, you know, at the end of the day this was complicated, but I do think it's something God's for. And here's sort of the criteria I walked through to come to that conclusion.

Bob [00:14:30] So I start with kind of what got me here before I even debated these things with myself and with other people. That is, the company has to be a good company that makes money than I can see they're going to continue to do that. They have some sort of growth rate and they're selling at some reasonable valuation and all of that stuff. Believe it or not, is hinted at in God's word. But the issues that God really cares about and we put it well, are the heart issues. So once we pass those I say secular tests, then it gets a whole lot more interesting. While I spent a lot of time on that's controversial, is that the relationship between how the executives get paid and how the rank and file get paid and also the amounts. You know, I'm not crazy about a company where I'm going to exaggerate where the CEO makes one hundred thousand times what the average employee does. I'm not sure that that's working in God's principles of sharing, not the CEO can't be or shouldn't be one of the eyes, if not the highest paid employee. That's absolutely fine. God doesn't say everybody gets the same number of dollars per hour, as it were. But what should that relationship look like? And we've spent a lot of time deliberating about that. So I'm talking about both the quality and the quantity. And therein lies a lot of gray space. And I've had discussions with other, I think, well-meaning Christians that we come to different conclusions on that. And that's the richness of the dialog that we've talked about here. And, you know, I want to have a dialog. I learned something and perhaps my views change over time. But that's been an issue across a lot of companies that we've spent time on. That's very difficult and a lot of gray.

Henry [00:16:17] Yeah. So I want to shift gears a little bit and go to some of the developments that we've seen in the public equity space, which is the space that you know, of course, best, although you, of course, are very fluent with other asset classes, too, like real estate. But on on the public equity side, there's been some things that we've seen. They've been encouraging. And, of course. The event we had, Christine Ricoh, has also been on a podcast talking about the emergence of faith driven employee resource groups as some of the largest publicly traded companies and of course, we know about corporate chaplaincy ministries like corporate chaplains of American workplace chaplains. As you see, there's shareholder conversations happen at the highest level where people are caring more and more about the environment and other stakeholders. You see that being more focused just on the environment or just on equal pay for women, which is awesome. To be clear, this isn't coming about that. But you see a shift or an opportunity for publicly traded companies to offer a spiritual mentoring and counseling to their employees. Or is it just a fringe thing? Do you think it will work? Any comments you have at all about that? Knowing that somebody is large cap publicly traded companies that you invest in has so many different employees and faith is joining become more and more of a conversation in some of the technology companies out here in Silicon Valley where it Apple, Google, Facebook, they now have federal and play research groups. Is that just the next thing just in Silicon Valley technology or do you see an opportunity for that to be more pervasive through all of the large cap public stocks?

Bob [00:17:48] Thankfully, it is growing in lots of ways and lots of places. I'd set two sets of comments, one generally, as you point out, and you name some specific companies in Silicon Valley. There are a lot of companies that, you know, not too many years ago would have maybe tolerated your come together for a faith based discussion, a Bible study, wherever the issue is, as long as you do it kind of often the corner and way before most people show up for work or whatever, you've got to do it off premises. That line of thinking is changing. I think people are recognizing and perhaps through more and more companies having a corporate chaplain or something like that, they're recognizing that those kinds of things increase the productivity, the positive view of the company, and they're all self-reinforcing. So even from a secular standpoint, people are coming to the view that we've got to do more of this sort of thing. Isn't that great? Because God smiles even when it's a secular way of getting there. The more specific is because I'm more familiar with it. And the financial services industry, how so many of the financial service firms are recognizing that there is a strata of the public who are Christian and they want to understand what Christian investment principles might be. So could you give me a Christian financial adviser, please? And now these firms are having groups and trade associations from their own employees that fit this bill. Kingdom. Advisors, you both know that organization works in that venue and helps employees come together and approach their senior management to get some of these things done. So this is all going, in my opinion, and a good and accelerating direction. And this is good news.

Henry [00:19:44] It  is. A little further afield from what you may know best. But to the extent that you have any comments or thoughts on other asset classes or other things as crossfires look distorted, there are capital aside from what's going on in public equities. Is there anything that compels you, anything in your travels that you've seen about ways that Christians are stewarding investment capital in a way that advances the kingdom?

Bob [00:20:10] Yeah, I think there are more and more organizations, more more investment vehicles that focus on their actions. Some of the good work that you guys are doing and your offerings, for example, there are more and more investments you can make, whereas there might be some financial reward, but also a reward that comes from the fact that somebody is going to flourish. It may reduce the return, but that's stated right up front and some are putting it all together and say, no, we've got to move forward. I was just talking to a guy yesterday who's in the process of making Christian films for young people and trying to get them on media that young people are watching. I mean, I'm talking about kids to compete with some of. Can I say garbage stuff that these kids might be watching? So there are lots of great things that are happening as more and more people are waking up to the fact it all starts with the faith and work movement that says, you know, our sun is not different from our Monday. It's in an integrated place. And if we approach things that way, it's going to be very natural we pursue these paths.

Henry [00:21:23] Yes. One other question related to that is do you see a time and I'm wrestling with this myself. But you see a time where there might be a. Product that might be created where an investor might choose to invest in a fund where there's an open ended Feiner Unit Investment Trust or closed end fund that just invest in faith driven CEOs? Or is that potentially a problem and becomes a holy hurdle and kind of separates out the financial markets is a product that may be well conceived or the heart rate, but it just ends up it just doesn't go over well. Any any thoughts on that?

Bob [00:22:02] Oh, yeah, I think. Let's take the ETF world. I mean, there are a zillion ETF. They're more E.T.s now than there are securities on the exchange. So it's only a matter of time. Maybe one already exists and we just all know about it. That does just what you're saying. Here's an ETF you can buy and the holdings are just fill in the blank. CEOs, you know, a believer, the CEO is a public believer or whatever descriptive words. Oh, absolutely. I think we'll get a lot of those sorts of things and it'll be fun to get track records on these things to see where we get positive signals that make a difference.

Henry [00:22:38] So I think that that leads into another point, of course, which is a concept of excellence. And so what guidance would you give a listener to this who's saying, okay, so I want to be more intentional about how I allocate my investment assets according to my faith? How do they look to do so with excellence?

Bob [00:22:54] So I don't think you abandon. I called it a few minutes ago kind of a secular investment techniques that you would use, for example, in public equities. It's what's the company selling for, which is valuation and what's its growth rate to keep things simple. I don't think you say, oh, well, that's not in the Psalms. Therefore, I'm not going to pay any attention that you still use the mind that God gave us on this planet to do those things. But then you layer on top of that who we're doing good things. I'll use the very broad phrase, human flourishing, what companies are doing that, you know, I think most of us over time are going to say, if I can make the most money by investing in a company where they, you know, they kill their worst 5 percent of their employees every year. You know, I'm not going to invest in that because it's not gonna smile on me. And that's not honoring who he is. So there will be tradeoffs to be made. And therein lies the excitement and I think the adventure that God's putting this on.

Henry [00:23:56] Yeah. Know when you talk about track record, it makes me also think about how important it is that we endeavor to understand the backgrounds of our portfolio managers. All too often people think of Christian music has been not as good as the secular counterpart. I think our hope collectively of this movement is that the funds that are run, the exchange traded funds cetera will be run with excellence, with great auditing, with great reporting, with fund managers that have got great track records. And so as you speak to track records in Morningstar ratings. I think it's really important that a Christ follower does their diligence last. Otherwise, this be a movement that's characterized by mediocrity with just different products that are created, but they're not done with excellence. And I think that that's what you speak to. Also track records.

Bob [00:24:41] So agree. You said it better than I could. Henry, there's just no way that this becomes second class. There's no way that this becomes something often the corner that has a lower standard. The standards are high because you know what? We are made in the image of God. God is a worker. Last I checked, his work is a plus. Therefore, we as believers, whatever field we're in, need to be a plus workers too. So we strive the best for his glory and for the clients and customers we're gonna be serving.

William [00:25:12] Amen, amen, that's a great place. Bob, as we moved the. We always like to bring our listeners in to where God has you in your story right now. And it's always amazing to hear how that intersects with some of our listeners and our guests. And so specifically, when you think about God's word in the scriptures, we'd love if you wouldn't mind inviting us in. Where God maybe has you somebody you may be telling you in a new and a fresh way. It could be today could be the season that you're in, maybe a passage you've been meditating on, or just something that's always been a guiding principle for you.

Bob [00:25:43] So you prepared me for this. So I did give it some thought and it didn't take much thought because it hit me across the head as what I'm about to tell you is hitting me across the head. I've known all along, God cares for the poor, but God really cares for the poor. And I think in my reading of the word in my prayer life, in people I've come in contact with in the last couple of months, God has since so president on that particular point, feeding the poor in spirit, feeding the poor materially. And as a result, among other things, my wife, Leslie and I, we are significantly increasing the percentage of our philanthropy that goes to the poor. We've always done it, but it's not been, in my opinion, having been hit over the head a big enough percentage, given how much? Importance. God places on that we as many people do we on Thanksgiving, our family went to a center city mission in Philadelphia and serve the homeless, a Thanksgiving meal and yet one more time. They are God's people who died for those very same people. And so I'm impressed with that part of who God is. We've got to care for the poor.

Henry [00:26:57] I love that illustration. But I've got to ask a phenomenal investor that really feels that God has a heart for the poor and wants us to care for the poor. Of course, as well. Whereas a really good investor invest in the poor. Is there a ministry or two that are particularly compelling to you by virtue of the excellence of the work they do and being able to serve and equip the poor that you have come behind that maybe some somewhere our listeners need to know about?

Bob [00:27:24] Yes, there are a lot of missions that do that and lots of different places. The Bowery in New York City is one of the biggest and one of the leading. The one we talked about for Thanksgiving Sunday Breakfast mission in Philadelphia. It's the only mission in the country. I'm told it serves 365 days, three meals a day to the homeless. So kind of cool.

Henry [00:27:47] Very, very cool. Excellent. Bob, thank you very much for spending time with us. You've been a great encouragement to us at the event that we had in our calls and everything we've done all along the way consistently. Men in our sales and we thank you for your time. And I know that that's a big deal for you. And thank you.

Bob [00:28:03] My privilege to serve with you guys.