August 25, 2015



By Mark A. Kellner  

While global stock markets continued their gyrations Monday, a new stock index has focused on another type of bottom-line: Catholic values.

The “SP 500 Catholic Values Index,” announced last Thursday by S&P Dow Jones, a unit of McGraw Hill Financial, “is designed to follow the 2003 Socially Responsible Investment Guidelines from the U.S. Conference of Catholic Bishops, which stress responsible stewardship of economic resources, fighting poverty, human rights and adhering generally to Catholic Church ethics,” the AFP news service reported.

Media reports indicate that the index reviewed all 500 S&P index stocks for compliance with the bishop’s guidelines and found 448 companies to be compliant, including Apple, Mircrosoft, Exxon Mobil and Wells Fargo, according to ETF.com.

There would be an apparent conflict of values with Exxon Mobil. It is the world’s largest publicly traded oil and gas concern, CNBC.com reported. Pope Francis, however, spoke against the side effects of fossil fuel development in a June encyclical, the Associated Press reported at the time.

According to a news release, Global X Funds, a company that specializes in so-called exchange traded funds, or ETFs, has licensed the use of the new index to create a fund investors can buy.

“It is important that investors now have a representative measure of the performance of those S&P 500 companies that adhere to the Socially Responsible Investment Guidelines as outlined by the United States Conference of Catholic Bishops,” said Father Seamus Finn O.M.I., chief of faith consistent investing at the Oblate International Pastoral Investment Trust, a group “which invests on behalf of more than 200 Roman Catholic organizations around the world,” according to CNBC.com.

For some Roman Catholics – a community that numbers some 70 million in the United States – investing that’s aligned with church teaching can be important, one expert said.

“If you are Catholic the issue is, ‘Is it morally correct for me to own a piece of a company that is making money through an activity that is against Catholic Church teachings?’ That’s the bottom line,” Greg Wolfe, finance director for the Roman Catholic Diocese of Little Rock, recently told the Arkansas Catholic newspaper.

Investing according with religious or social beliefs is a growing trend, Forbes magazine reported in 2013, with $3.74 trillion in total managed assets committed to socially responsible investing at that time. As the magazine stated, “about $1 of every $9 under professional management in the U.S. can be classified as an SRI investment.”

The new index, and its associated ETF, aren’t the only ways for socially conscious investors to match faith and finance. There have been Shariah-compliant exchange-traded funds for nearly a decade, Bloomberg Business reported in 2014. However, the news service reported, at the time “assets account for less than one percent of the total $2.3 trillion ETF market, according to Falah Capital LLC,” a fund manager that operates one such fund.

In April, the Reuters news agency reported, “Malaysia’s i-VCAP Management Sdn Bhd … launched its first regional Islamic exchange-traded fund to include stocks from the Southeast Asia region,” which included “Sharia-compliant stocks from Malaysia, Singapore, Indonesia, Thailand and the Philippines.”

Last year, Deseret News reported on mutual funds designed to support faith-based investing, listing those specifically designed to appeal to Protestant, Catholic and Islamic investors.

“People should be comfortable with their investments,” David Kathman, a mutual fund analyst at Morningstar, a Chicago-based investment research and investment management firm, said at the time. “If (faith-based investing) helps people sleep at night, that’s great.”

But not everyone is bullish on faith-focused finance. ETF.com blogger Rachael Revesz noted, “Ultimately, investing in anything is driven by profit, profit, profit – and what’s so Catholic about that?”