Catholic Values Investing: What It Is and How to Verify a Fund

Catholic values investing is portfolio construction that applies Catholic moral teaching to what a fund may own. In practice it comes down to a screen: a written rule that removes companies whose business activity conflicts with Church teaching, sometimes paired with a stated policy of engaging the companies that remain through proxy voting and dialogue. The label covers separately managed accounts, mutual funds and exchange-traded funds, and the buyers range from diocesan institutions and religious orders to individual investors.

For the US market, the reference text is the Socially Responsible Investment Guidelines of the United States Conference of Catholic Bishops, approved in November 2021, the first update since 2003. Funds marketed as Catholic in the US either implement that document or apply a different rulebook and say so.

The guidelines direct the investments of the Conference itself, and page 2 states plainly that “The USCCB does not endorse the services or products of any financial advisors and investment firms.” No fund carries an official Catholic certification. Whatever alignment claim appears on a fact sheet belongs to the manager or to the index provider, which leaves the verification work to the investor.

The framework behind catholic values investing funds

The guidelines rest on two stewardship principles: earning a reasonable financial return, and exercising ethical and social stewardship over how that return is produced. Action is grouped into three strategies: “Avoid Doing Harm” for exclusions, “Actively Work for Change” for shareholder engagement, “Promote the Common Good” for positive allocation. The policies themselves sit in five categories: Protecting Human Life, Promoting Human Dignity, Enhancing the Common Good, Pursuing Economic Justice, and Saving Our Global Common Home. Part One, section IV.d commits the Conference to reviewing the document every three years, so a screen described as USCCB-aligned before November 2021 was describing the 2003 text.

The framework carries two limits. The guidelines bind the investments of the Conference; dioceses and Catholic institutions apply them at their own discretion, and many publish local variants. And the document is a policy statement rather than a certification scheme: no approved-fund list, no seal, no registry to check a product against.

It also explains how two funds can both invoke the framework and still hold different companies. The guidelines set direction: which activities to avoid, where to press for change. Revenue thresholds, tolerance for indirect exposure and the choice of data vendor are left to whoever writes the index rules or the prospectus.

One rulebook, two families of screens

Funds sold to Catholic investors in the US split into two families, and what separates them is the document the screen implements.

USCCB-aligned. CATH, the Global X S&P 500 Catholic Values ETF, tracks the S&P 500 Catholic Values Index, which applies the bishops’ framework to the S&P 500. It is the only US-listed ETF we document as running a USCCB-aligned screen. On the mutual fund side, our index documents two Catholic fund families: the Ave Maria funds (Schwartz Investment Trust) and the Knights of Columbus funds (Knights of Columbus Asset Advisors), each governed by criteria the adviser sets and publishes.

Faith-based, but not Catholic. The Inspire ETFs (BIBL, PTL, BLES, WWJD and others) run a biblically responsible investing screen, or BRI, a Protestant-rooted framework that overlaps with Catholic exclusions on several themes without being the USCCB text. They turn up regularly in third-party lists of “Catholic ETFs”, and that conflation is the most common error we correct in this category.

The overlap is real: several exclusion themes appear in both, and a BRI fund may well satisfy a Catholic investor who reads its criteria. What differs is the source document, the thresholds and the governance behind them. Every fund page in our index names the rulebook actually applied, so the two families are never merged and a reader can see whether a screen is inherited from an index provider or written in-house.

Where the screens live in the products

The wrapper matters less than the rulebook, though it changes what you can inspect and how fast. An ETF publishes holdings daily, and its screen usually lives in an index methodology document maintained by the index provider, a party distinct from the fund sponsor. A mutual fund discloses holdings quarterly, and its screen lives in the prospectus and the statement of additional information, written by the adviser itself. The questions are the same either way — what is excluded, on what evidence, reviewed by whom — but you go to a different document to answer them.

Our rankings follow that logic: screen first, brand second.

Our ranking of Catholic ETFs covers the exchange-traded side, where daily transparency makes a screen easy to test against the actual holdings. Our ranking of Catholic mutual funds takes the older and deeper end of the market, where most US Catholic assets have historically sat and where advisers write their own criteria instead of licensing an index.

To browse rather than rank, the ETF category and the mutual fund category list every product we track in each wrapper, aligned or not, including faith-based funds we document precisely because they get mislabeled so often. Inclusion in the index means we have read the rulebook. It says nothing about whether the fund meets any particular standard.

How to check a catholic claim on a fund

Three steps separate a documented screen from a marketing line.

1. Read the methodology, not the product page. Marketing copy compresses a screen into an adjective. The methodology does not. For an ETF, find the index methodology PDF from the index provider and look for the exclusion table: activity, revenue threshold, data source, review frequency. For a mutual fund, the prospectus and the statement of additional information carry the same language. If a fund describes its screen only in prose on a web page, with no document behind it, that is the finding.

2. Check which policies the screen implements. The USCCB framework spans exclusion and engagement. Most retail products implement the exclusion side, since the categories on protecting human life and promoting human dignity translate cleanly into a list of activities to avoid. Economic justice and the common good usually depend on shareholder engagement and proxy voting, which a passive index screen cannot perform on its own. A fund can be entirely honest in claiming alignment while implementing only part of the document. The proxy voting policy tells you which part.

3. Check the regulatory standing of the manager. A screen is only as good as the firm applying it. Registered advisers file with the SEC, and those filings, disciplinary history and assets under management are public through IAPD. We run that check on every manager in the index and record what we find alongside the primary documents behind each screen. The sourcing rules are set out in our methodology.

Where the three disagree — a marketing claim broader than the prospectus, an engagement policy that does not match the stated framework — the source document wins. Recording that gap is what our fund pages are for.

Frequently asked questions

What is catholic values investing? It is portfolio construction that applies Catholic moral teaching to what a fund may hold, usually through a written exclusion screen and, in some cases, a policy of shareholder engagement. In the US market the reference text is the USCCB Socially Responsible Investment Guidelines, approved in November 2021, the first update since 2003.

Are the Inspire ETFs catholic funds? No. The Inspire range (BIBL, PTL, BLES, WWJD and others) runs a biblically responsible investing screen, a Protestant-rooted framework that overlaps with Catholic exclusions on several themes but is not the USCCB text. Third-party screeners often list them next to Catholic funds; the two rulebooks are different documents.

Is there a catholic ETF that follows the USCCB guidelines? CATH, the Global X S&P 500 Catholic Values ETF, tracks the S&P 500 Catholic Values Index, which applies the framework of the bishops to the S&P 500. It is the only US-listed ETF we document as running a USCCB-aligned screen. Other Catholic ranges in the US are structured as mutual funds.

How do I check a catholic screen on a fund? Read the source document rather than the marketing page: the index methodology for an ETF, the prospectus and statement of additional information for a mutual fund. Then check which of the five USCCB policy categories the screen actually implements, and confirm the regulatory standing of the adviser through SEC records.

Does the USCCB endorse investment products? No. Page 2 of the 2021 guidelines states that the USCCB does not endorse the services or products of any financial advisors and investment firms. There is no approved-fund list and no seal. Any claim that a product is USCCB-aligned comes from the manager or the index provider, not from the bishops.

Sources

• United States Conference of Catholic Bishops, Socially Responsible Investment Guidelines (approved November 2021): https://www.usccb.org/resources/Socially+Responsible+Investment+Guidelines+2021+(003).pdf
• Catholic Responsible Investments (CBIS), USCCB updates its Socially Responsible Investments Guidelines: https://cbisonline.com/us/usccb-updates-its-socially-responsible-investments-guidelines/

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This page is a factual reference, not investment advice. We document what fund screens say; we do not recommend funds, and we hold no affiliation with any product named here. Methodologies change between reviews — verify against the current prospectus or index methodology before acting. Questions of doctrine belong to your pastor or diocese, not to a fund index.