Global X S&P Catholic Values Developed ex-U.S. ETF (CEFA) seeks to track the S&P Developed Ex-U.S. Catholic Values Index, which measures the performance of developed international stocks that align with Catholic social teaching principles while excluding companies involved in activities like abortion, contraception, adult entertainment, and weapons manufacturing.
How It Works
CEFA uses a passively managed, market-capitalization-weighted approach that applies Catholic values screening to developed market stocks outside the United States. The fund starts with a broad universe of international developed market equities, then excludes companies based on Catholic social teaching criteria including business involvement thresholds and conduct-based screens. Remaining stocks are weighted by market cap and rebalanced quarterly to maintain index alignment and screening compliance.
Key Features
- Unique Catholic values screening excludes companies involved in abortion services, contraceptives, adult entertainment, and military weapons production
- Covers developed international markets including Europe, Japan, and Asia-Pacific while maintaining ESG-aligned investment approach
- Launched in 2020 making it one of the newer faith-based international equity ETFs with specific Catholic screening methodology
Risks
- This ETF can lose value when Catholic values screening eliminates profitable companies, potentially reducing returns compared to unscreened international indexes during certain market cycles
- Currency fluctuations between the U.S. dollar and foreign currencies can significantly impact returns, adding 5-15% annual volatility beyond stock market movements
- International developed markets can underperform U.S. stocks for extended periods, potentially lagging by 20-30% over multi-year stretches as seen historically
Who Should Own This
Best suited as a satellite holding (10-25% of international allocation) for Catholic investors with 5+ year time horizons seeking faith-aligned international diversification. Medium-to-high risk tolerance required due to international equity volatility and currency exposure. Appropriate for investors prioritizing values alignment over maximum returns in their portfolio construction.