Global X S&P 500 Catholic Values ETF (CATH) seeks to track the S&P 500 Catholic Values Index, which measures the performance of large-cap U.S. stocks that align with Catholic social teaching principles. This values-based equity ETF excludes companies involved in activities conflicting with Catholic values while maintaining broad exposure to America's largest publicly traded companies.
How It Works
CATH uses a passively managed, market-capitalization-weighted approach that mirrors the S&P 500 but excludes companies involved in abortion, contraception, adult entertainment, weapons manufacturing, and other activities deemed inconsistent with Catholic values. The fund applies negative screening criteria to remove approximately 50-75 companies from the standard S&P 500 universe, then weights remaining holdings proportionally to their market value. Rebalancing occurs quarterly to maintain index alignment and screening compliance.
Key Features
- Applies Catholic social teaching screens while maintaining broad large-cap U.S. exposure, excluding only 10-15% of S&P 500 companies
- Maintains similar sector diversification to S&P 500 despite values-based exclusions, avoiding concentrated sector bets
- Offers faith-based investing without sacrificing access to major technology, healthcare, and financial services companies
Risks
- This ETF can lose value during broad market downturns, potentially declining 30-40% in severe bear markets like traditional large-cap equity funds
- Values-based screening may cause performance divergence from S&P 500, particularly if excluded companies outperform significantly over extended periods
- Limited diversification compared to total market funds, with concentration risk in approximately 425-450 holdings versus broader market exposure
Who Should Own This
Best suited as a core equity holding (30-60% of stock allocation) for Catholic investors or those seeking values-based investing with 5+ year time horizons. Medium risk tolerance required due to equity market volatility. Appropriate for investors willing to accept potential performance differences from broad market in exchange for alignment with Catholic social teaching principles.