#3 Reid Steadman & Taber Johnson - Bountiful Financial

The Vestr Securitization Podcast

If you want to understand how faith-based investing is evolving as a credible and structured approach to portfolio construction, this episode with Reid Steadman and Taber Johnson of Bountiful Financial is well worth your time.

Reid and Taber bring decades of experience in index design and product innovation, including leadership roles at S&P Dow Jones Indices. With Bountiful Financial, they are creating faith-aligned investment frameworks that go far beyond traditional ESG overlays. Their approach is grounded in religious principles, supported by proprietary data, and structured through robust governance models that allow for consistent and adaptable implementation.

In this conversation, they explain how Bountiful builds indices that reflect the beliefs of specific faith communities while meeting the standards required for institutional use. They outline how their governance process includes advisory councils, public consultation, and internal oversight, ensuring that each index reflects evolving doctrine without compromising on quality or transparency.

You will also hear insights on:

• The estimated $10 trillion in global assets that could be aligned with faith-based mandates but remain largely untapped

• How faith-specific data is developed in-house, rather than relying on generalised ESG inputs

• Why controversy screening includes not only negative events but also how companies respond, with a view toward accountability and redemption

• How investors can customise or adapt frameworks to suit different interpretations within global faith communities

This episode provides practical takeaways for professionals working in banks, asset management firms, and wealth advisory roles. It offers a clear view of how structured, values-driven investing can be implemented at scale without compromising on investment discipline.

If you are involved in product structuring, thematic investment strategy, or advising mission-aligned clients, this conversation offers a thoughtful and actionable perspective.

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🎙️ Transcript:  

Intro: 00:01

The Vestr Securitization Podcast with Stefan Wagner. Unlocking investment innovation. Vestr's end-to-end platform enables securitization providers and investment managers to streamline the lifecycle of dynamic investment solutions, ensuring better results for their clients and their operations.

Stefan Wagner: 00:24 Hello and welcome. In this series, we explore the cutting edge of investment innovation. I sit down with leading asset managers who use securitization vehicles to execute the unique investment strategy.

Reid Steadman: 00:35 We estimate that there's about $10 trillion or more that's aligned with faith values around the world.

Stefan Wagner: 01:15 Hello to everybody listening. I'm here and I'm quite excited about that. I'm here with Taber Johnson and Reid Steadman from Bountiful. They are the key figures behind Bountiful Financials. It was pioneering face-based indices and I think it offers a really unique opportunity to delve a little bit into the intersection of finance and faith. quite a while ago already in a podcast interview where I was trying to delve into that, and I think it's a really interesting thing for everybody, not only me. And just to kick it off, Bountiful Financial was founded with a strong mission around faith and finance, and maybe one of you or both of you could share what inspired you to the founding of the company and how the company's vision maybe even evolved and how you approached that faith-based investing over time.

Reid Steadman: 02:06 Sure, I can speak to that, Stefan. Bountiful Financial has been, I would say, kind of an incubation for many, many years. I spent 20 years at S&P Dow Jones Indices, and I was overseeing everything that went beyond the standard indices. And as part of that, that included things like sustainability, ESG, and so forth. And under that umbrella were these indices that were faith-based indices. So I worked on building the S&P 500 Catholic Values Index, which underlies an ETF in the United States. I also was overseeing product management, working with the team overseeing product management of the Sharia indices. And this gave me a sense that this was a very big space.

So we estimate that there's about $10 trillion or more that's aligned with faith, with faith values around the world. But in working on these different solutions, I saw that there was a real deficit, a real lack of purpose-built solutions. There wasn't data that was built for faith-based investors. They were kind of begging and borrowing from sustainability. And I just also saw that there was just a lack of indices that could be used by investors.

And so, yeah, this gave me a sense that there was opportunities in this space. I was also curious about this area as well from a personal standpoint. So I'm someone who values his faith. And I saw that even though there were some solutions for Sharia-based or Islamic investors and Catholic investors, that there needed to be more solutions for other faith traditions. And in some areas, there's actually almost nothing.

Stefan Wagner: 04:22 Yeah, I can imagine. You touched a little bit already on the designing and some of the challenges. How do you go about basically resolving some of these when you design and maintain these indices?

Taber Johnson: 04:35 Let me pick that one up. There are really two ways we approach those. The first is our governance model, and we'll talk about that a little bit more, I think, later on. the governance model allows us to look at doctrine and the lived experience of faith communities, but it allows us also to do that across faiths.

Even though we don't consider ourselves doctrinal experts per se, we consider ourselves governance experts, and this governance model allows us to, in a uniform way, look at the different face, their priorities, their unique teachings and doctrines, and then find ways to apply those unique teachings and doctrines to an investment solution or an investment concept. I guess the second challenge that we have is really the data.

And Reid already alluded to that, that the data sets that are available in the market really come from a different viewpoint, from a sustainability viewpoint, from an ESG viewpoint. And we found that that is not really adequate for reflecting faith ideas in an investment product.

Stefan Wagner: 05:59 How do you approach this? Do you do your own research? How do you obtain that data?

Taber Johnson: 06:05 We are doing our own research, for sure. We're building our own datasets. That takes some time. That's perhaps the biggest challenge that we're facing, is to gather that data. So we do apply other datasets and have partners that are typically within the ESG space. But there are ways to kind of adapt that data to a faith-based perspective. But what we're really aiming for is to build and maintain those data sets from using faith as first principles.

Stefan Wagner: 06:40 When you approach this in the sense how people interpret faith, that changes over time. Let's say being announced by the faith or whoever the leader of the faith is, how do you Bring this all together in a governance and make it work. I see this as a big challenge.

Taber Johnson: 07:01 It's a fantastic question. So our governance model is really based on three main pillars. The first pillar being our advisory councils, the second being public consultations, and the third pillar is our own internal committees within Bountiful. The advisory councils meet on a regular basis, and for every faith community, we have a different advisory council. These advisory councils can give us a chance to take the polls of the faith communities on a regular basis, multiple times a year, and also take a pulse of what the current priorities are.

And we're really looking forward to our Roman Catholic Advisory Council that's coming up in a few weeks, getting some changes that everybody's familiar with in the leadership of the church and how that might shift the priorities. Perhaps now it's a bit too early to know how those priorities will shift. But these advisory councils meet on a regular basis. And so we have the opportunity just to always keep our finger on the pulse.

Stefan Wagner: 08:13 If you have such, let's say, proprietary data sets and everything else, can people also come to you and get their own little version of it? Because they might have a different, slightly, interpretation of it. I mean, some of these FAs have a huge amount of global following, and they might have a different interpretation of Latin America versus Germany, for example.

Reid Steadman: 08:32 Yeah, I could speak to that. The faith-based investment frameworks that we offer, we really view as starting points, not as definitive, that this has to be the way that someone views a particular faith. And the data that aligns with them, again, it can be used according to the faith values of an individual or an organization. We want to be very careful to respect everyone's individual views, but we also want to give strong starting points.

And that's one of the things that I noticed was missing was there just needed to be a better menu of options, a framework that would reflect someone's faith. Because it's very difficult to sit down and say, okay, here's what I believe in detail, and then immediately translate that into an investment context. The average person needs a little help in that, and that's where Bountiful comes in, is to help in that process.

Stefan Wagner: 09:37 I mean, faith often is also, in my opinion, associated with hope, in a sense. you had some experience with managing the VIX index, which is more the fear gauge. So I find it quite interesting that there's a nice counterbalance with a face-based investing in this. Is that something that you had in mind when you started this out?

Reid Steadman: 10:00 Yeah, there's a lot of fear in financial markets generally at any given time, not just now. And that's reflected in the products and the trading that you see. But when it comes to bringing in faith, it's great to be associated with an effort, a cause where we're bringing more faith to the markets. If you look at least in Christian scripture, some of the guidance there that you see, the words that you hear most often is fear not.

So there's a chance to apply faith here. And I would say the application is to bring your values into your investments and not necessarily be overly concerned with issues such as tracking error relative to the market. Put those values first. and believe that you can do better, that you can get the returns that you need, that will allow you to live a fulfilling life.

And we believe it will be a more fulfilling life if you are bringing your values into all areas of your life, not compartmentalizing them in one place, but They're an important feature in all that you do. That leads to confidence, that leads to, I'd say, moral strength that counteracts those feelings of fear.

Stefan Wagner: 11:24 If I may go a little bit deeper than here, let's say you have a stock index, you pick specific companies to be part of that index. Do you only look, let's say, what the company does, in a sense, aligned with face, or do you also look at the, let's say, senior leadership of that organization, and do they fulfill certain qualities or live a certain way? I mean, I have, for example, maybe a slightly interesting one here, but I have a friend of mine who has a… very detailed value investment fund and they literally put private detectives on the sea level and if they're saying he basically has an affair, if he's willing to lie to his wife, he's probably willing to lie to his shareholders.

Taber Johnson: 12:17 Yeah, that's definitely an interesting question and something that we are looking at. We look at three levels basically. the products and services that companies produce to earn revenue, essentially, how they do that, and then really their impact, the broader impact on their stakeholders, the communities, their shareholders, their employees, their customers. The situation that you talked about with misbehavior at the sea level, that would usually fall under what we would call our controversy data set.

And we do look at controversies, and that's the key topic that we're exploring with our advisory councils this year. How to assess controversies, which controversies to look at, which are most relevant for the faith communities, and whatnot. I think it's important here, though, to mention that our approach to controversies is unique in the sense that our focus is not only on identifying those controversies, but also identifying the curative efforts of the companies when those controversies unfold. How do the companies address those controversies? It's really intentional in the sense that it goes back to the concept of repentance, restitution.

Stefan Wagner: 13:49 So in a sense, there's forgiveness also in faith. So if a company, for example, has been excluded, is there a process for them to come back, basically, and be considered?

Taber Johnson: 14:05 There's definitely a process. We purposely try to avoid knee-jerk reactions. where there's a breaking controversy that's making news, and then we yank that company out of our indices or our investment products. We avoid those situations for several reasons. One is because our focus really is on how the companies address those controversies. We have to remember that Christ taught us, he who is without sin can cast the first stone, right?

We recognize that there's not perfection within any of the companies, and we really try to focus on the positive things that the companies are doing, and that includes fixing or curing controversies. Before we make a decision about a company potentially leaving our products, we look at how the company is addressing those controversies. And in some cases, it's appropriate for those companies to be excluded based on controversy. But there's always a path for them to return.

Stefan Wagner: 15:20 When you design these indices, obviously, everybody at the end will say, it's a very nice idea, but what is the performance? Am I giving performance up there? Is it just to make me feel good, or is it comparable? Is there something you could share, how they have performed?

Reid Steadman: 15:42 Yeah, you know, as we design these, I guess there's two types of indices that we design. One is meant to reflect the broader market. And even as we, say, exclude certain companies that don't align with values or put greater weight into companies that do align with certain faith values, we also can make some methodological adjustments to the index so that it has a risk and return profile very much in line with the market that it's targeting. And so you're getting a return that's very similar to the beta of a market.

The other type of index that we create is more thematic, where you're looking at something like social justice or social causes, and you're looking at things like environmental concerns. In those cases, that's really about getting more pure exposure to the theme itself. And we're not necessarily correcting for or trying to adjust the methodology so that it aligns with the broader market. But just because it's more narrow and more focused, that doesn't mean it's going to underperform necessarily.

Just as an example, we've launched the Enhancing the Common Good Index recently. And in the past few months since that's been available, it's had a performance that's been slightly better than the market. So it's very possible to achieve your financial goals and also invest in line with your faith. And that's really the expertise that Bountiful brings to bear, is helping to develop indices that achieve those multiple goals.

Taber Johnson: 17:28 Yeah, just to add, I mean, definitely our focus is the faith alignment and feedback that we get is that faith-driven investors are more interested in that alignment or are willing to give up a bit of performance for greater alignment. But what we found is that there's not necessarily that trade-off. Even our broad market indices over the eight-year history that we have are slightly outperforming their benchmarks. So there's not necessarily that trade-off, but even if there were, many faith investors are willing to do that just to ensure that they're aligned to their faith.

Stefan Wagner: 18:13 And when you have these slightly more thematic indices, you can obviously measure the performance, maybe even drawdowns, volatility, and everything else. But is it also potentially possible for me to see what sort of, if I want to achieve a certain impact with my investment, is that something I can get back as well as information?

Reid Steadman: 18:39 Yeah, I would say that the benefits of an index is that you can see very clearly where your capital is going and to what companies you're allocating and supporting with your capital. In terms of the end impact, I think that this is where the data sets come in, where you can measure the impact of the company in terms of how they're changing the world for the better. Taber mentioned that we have some partnerships, some great partners.

We work closely with a company called Impact Cubed, and that's the thrust of their data set, which has been aligned with a bountiful Catholic framework for creation of this enhancing the common good index, is to see the impact that a company is making But this is a process. This is something that over time, I think, will get better and better data, you know, showing the impact of these companies.

Stefan Wagner: 19:44 You touched already a little on it, both of you, that you basically launched a product now into the market linked to the Bountiful Enhanced Common Good Index. I think it was specifically tailored for you in market. Can you tell us a bit more about it? You know, we talked theoretically. Now, can we actually get access to something like if you like what we give?

Taber Johnson: 20:04 So our Enhancing the Common Good Index is based on our Roman Catholic framework. This idea of enhancing the common good is something that is part of Catholic social teachings. It's something that resonates with the Roman Catholic community. We chose that, however, because we feel like that concept resonates across faiths as well.

So even though it's very much based on our Roman Catholic framework. It's something that we're marketing much more broadly than that. The Enhancing the Common Good Index family really looks at positive impact that companies might have. And so we're looking at companies, for example, that are involved in medical care or education, community development, things along these lines that are positive for the communities. And we're looking for a revenue alignment of 50% to ensure that a significant portion of the company's work supports these principles.

Reid Steadman: 21:18 In terms of accessing the index, there's an exchange-traded product, ETP, that is offered by Leontech on Swiss Exchange. So we see this as a great opportunity, great innovation. in particular now where there's a lot of focus on faith. As Taber mentioned before, there's been this transition in one of the largest faiths in the world in the Catholic Church. We think that people are taking stock of their values and trying to understand and think through how their faith penetrates their lives. And we think that some investors may want to align more of their capital with their values. And this financial product offers an opportunity to do that.

Stefan Wagner: 22:10 Great. Thank you very much. I always like to ask everybody right at the end, three sort of personal questions. People may get an idea a little bit about yourself, you know. Number one, what is on the top of your current music playlist?

Reid Steadman: 22:27 Ukrainian pop songs. My wife is from Ukraine originally. And my kids, we all speak actually Russian at home, but we're definitely Ukrainian patriots, and so we're listening to Ukrainian pop songs.

Taber Johnson: 22:47 Actually, my kids have to curate my playlist. We have a family playlist, and that's usually the one that I listen to. I don't contribute to it, but I consume it. I couldn't tell you what songs are on there, there are a few from my teenage years, like The Cure, that I can sing along to. Something along those lines. In terms of music, I defer to my children. What is your definition of success?

Stefan Wagner: 23:17 I'd say spiritual growth.

Reid Steadman: 23:26 greater spiritual enlightenment, understanding the world and myself, and also building a relationship with God is how I measure success.

Taber Johnson: 23:40 Yes. I think, just like in my work that's very much data-oriented, I kind of have to break things down to bite-sized chunks. And so, success in life is really an abstract concept for me. I really focus on the success day-to-day. And I guess, accumulatively, when those successful days add up over time, that equals a successful life.

Stefan Wagner: 24:07 Great. Thank you very much, Reid and Teo. That was very, very informative. If people liked what they heard, how can they get in contact with you?

Reid Steadman: 24:17 Yes, we have a website, www.bountifulfinancial.com, or feel free to write us directly. Reid, R-E-I-D, dot Steadman, S-T-E-A-D, M-A-N, at bountifulfinancial.com. We'd love to hear from you. We'd love feedback, and we'd love to… build interesting investment solutions that reflect who you are. So, yeah, we'd love to hear from people.

Taber Johnson: 24:45 Yeah, you can also find both of us and Bountiful Financial on LinkedIn. So rather than remember our names, you can remember Bountiful Financial and look that up on LinkedIn, and then you'll find us as well.

Stefan Wagner: 24:58 Great. Thank you. Thank you very much. That was very enlightening. Thanks.

Taber Johnson: 25:01 Thank you, Stefan.