Homestead Funds is turning 35 this month, and the company is celebrating its roots in bringing high-quality and affordable investment options to rural America and its growth as a trusted money manager for all investors.

Before 1990, NRECA’s investment department managed electric co-op employees’ pension assets and 401(k) funds. But to expand access to professional money managers, the association launched Homestead Advisers in 1990 and registered Homestead Advisers with the Securities and Exchange Commission. In addition, NRECA began Homestead Funds to offer mutual fund options.

"Our goal was to democratize professional investment management—making it accessible and affordable for everyone,” said Mark Santero, president and CEO of Homestead Funds.

Today, investors can engage with Homestead Funds via an investment adviser or online through tools and resources on its website.

“We offer personalized financial guidance tailored to their life goals, whether savings for retirement, building an emergency fund, purchasing a first home or funding a child’s college education,” Santero said.

Through the decades, the company has stuck to its core philosophy.

“We’ve remained dedicated to serving NRECA’s member co-ops and their communities, with investment services at a reasonable cost. And after we pay our expenses, we give our margins back to NRECA to support our members' needs and initiatives,” he said.

In an interview, Santero reflected on Homestead’s achievements, its steady investment philosophy amid Wall Street’s ups and downs, and its commitment to making personal investing more accessible to everyone.

Q. How has Homestead Funds changed over the past 35 years?

Santero: I’d say what’s changed dramatically has been the evolution of financial services. It’s night and day. Thirty-five years ago, mutual funds were pretty much the only investment vehicle created for individuals that allowed them to get a diversified pool of stocks or bonds without having to buy them themselves. You went through brokers, and there were high fees and sales charges. Today, investors have access to online platforms, robo-advisers, index funds, and countless other products that didn't exist when we began. We've evolved alongside these changes, providing modern services at reasonable fees—including asset allocation models, calculators, and $0 commission-based products and advisory services.¹

Q. How are advisers engaging with co-ops on using funds for operations and workforce purposes through Homestead’s expanded capabilities?

Santero: Through conversations with co-op leaders and understanding their challenges, we’ve provided solutions through various programs and use the funds as investment vehicles. In 2019, we were talking with several co-ops on how roughly 37% of Americans didn’t have $400 in emergency savings. So, if a boiler broke, they were tapping into their 401(k) fund or incurring credit card debt.

We did a pilot program with Lake Region Electric Cooperative where they created an employer-sponsored saving program through payroll deduction for emergency savings. They match up to $200 a year, and over 60% of their employees contribute $200 to the fund. We now have several co-ops promoting financial wellness among their employees through payroll deduction and a matching program as an additional retention program to help people save.

Our relationships with co-ops have helped them manage community purpose accounts created with unclaimed capital credits, which after a certain period, depending on what state you live in, become unclaimed. The unclaimed funds have provided scholarships, funded community development initiatives, and have even lowered electricity rates for members in need.

We created storm reserve accounts in 2019, now known as disaster reserve accounts based on conversations with Northern Neck Electric Cooperative, which was having issues with hurricanes. We worked with their finance team to obtain board approval to create a storm reserve account. We now have several of those accounts, not just for hurricanes but wildfires and cybersecurity threats.

Last year, through a conversation with MidSouth Electric Cooperative, we learned they were having problems retaining their linemen and IT people, while they were also building out their broadband. They wanted to retain them, so we created a retention program to help them both incentivize and drive performance, as well as retain key people so they wouldn’t lose them to other utilities.

We’re also working with NRECA on several things. We’re planning a directors good governance series, which includes videos—we just cut the first one with NRECA Senior Principal of Governance Education Pat Mangan. Good governance by directors helps co-ops work towards financial stability.

We’re also working with NRECA’s Business and Technology Strategies department to incorporate financial wellness into safety discussions, as the two are interchangeable. If you’re worried about paying a mortgage, a medical bill, or your child’s tuition, it’s stressful. There are hidden costs of financial stress.

Q. Homestead Fund prides itself on its Main Street values and consistent investment approach. How do you stay the course amid headline-grabbing investment fads?

Santero: I’ve been doing this for 43 years, and I’ve seen various products, structures and capabilities come and go. There’s always the latest, greatest product, crypto, bitcoin, hedge funds, private equity…you name it. Homestead is about consistency and long-term planning. Homestead Funds is about helping people realize and plan what their individual savings aspirations are. It’s not about product or transactions. That’s not what we do. Our roots are in managing pension plans, which are long-term structures, so we’ve shied away from the so-called “latest and greatest” structures. We embrace and live by the same values as cooperatives. If you think about it, the latest, greatest structures that have come and gone in my lifetime may not have adhered to those principles.

Q. The electric industry is changing at lightning speed. Is that happening in the financial world?

Santero: Everything is moving quicker today, right? If you look at 1990-2000 decade, in that 10-year span, there were various market cycles and trends in finance, a normal pace of change. But looking at 2000-2020, it was a multiple of two market cycles to every one from the previous decade. The volatility and the speed of change was double. And product proliferation increased significantly, with some of the newer structures now 100% available online. And post 2020, you now have AI as an investment tool, doing analysis on companies and providing information for investors. But the threat to investors, no matter what the decade and pace of change, continues to be bad actors providing products, advice and guidance to investors in the form of new complex structured products that are inappropriate for them and their families.

Q. Any closing thoughts?

Santero: There are two things I believe will remain at the heart of what we do, whether in five years or another 10, 20, 30 years. That’s quality and consistent performance of our investment products and client service—our two pillars. We don’t try to create products or services that aren’t in our wheelhouse. We know who we are and, most importantly, we know who we’re not.

¹Federal Reserve, “Report on the Economic Well-Being of U.S. Households, May 2025”

¹All mutual funds incur expenses, which cover operating costs. 

Past performance does not guarantee future results. Investing in any mutual funds, including Homestead Funds, involves risk, including the possible loss of principal. An investment in a mutual fund is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency.

Before investing in any Homestead Fund, you should carefully consider the fund’s investment objectives, risks, charges and expenses. The prospectus contains this and other information about the funds and should be read carefully before investing. To obtain a prospectus, call 800.258.3030 or visit homesteadadvisers.com.

Homestead Funds’ investment adviser and/or administrator, Homestead Advisers Corp., is an SEC-registered investment adviser. Homestead Funds are distributed by Homestead Financial Services Corp. Homestead Advisers Corp. receives compensation from the Homestead Funds for serving in these roles. Homestead Advisers Corp. and Homestead Financial Services Corp. are indirect, wholly owned subsidiaries of the National Rural Electric Cooperative Association (NRECA). Homestead Financial Services Corp., Distributor 10/25.