Catholic Values ETF Comes Of Age

The exchange-traded fund landscape is home to increasing number of funds that adhere to environmental, social and governance themes. That includes some ETFs rooted in religion, such as the Global X S&P 500 Catholic Values ETF CATH.

The Global X S&P 500 Catholic Values Index ETF follows the S&P 500 Catholic Values Index, a subset of S&P 500 stocks that are aligned with Catholic investment values. That index “is designed to include the companies within the S&P 500 whose business practices adhere to the Socially Responsible Investment Guidelines as outlined by the United States Conference of Catholic Bishops (US CCB) and exclude those that do not. Given CATH's alignment with the S&P 500, it is intended to be used by investors for their US Large Cap exposure,” according to New York-based Global X.

CATH's Methodology

There are scores of S&P 500 member firms that meet the criteria set forth by CATH's index. To be precise, the Catholic values ETF was home to 463 stocks at the end of the first, according to issuer data. That is not far off the just over 500 found in the standard version of the S&P 500.

Like the S&P 500, CATH's largest sector weight is technology, with healthcare and financial services rounding the top three sector weights. CATH features a slight underweight to consumer discretionary stocks and a modest overweight to staples names relative to the S&P 500.

“While many aspects of CATH are designed to be similar to the S&P 500 index, one area that may differ from popular S&P 500 index funds is the manner in which the Fund votes its proxies,” said Global X. “Proxy voting for the Fund’s holdings are conducted according to Glass Lewis & Co.’s guidelines on Catholic Policy. Glass Lewis has structured a Catholic voting policy primarily based on the principles set forth by the USCCB, which is the same set of principles used to create the filters for the S&P 500 Catholic Values Index, which CATH tracks.”

Growth And Performance

CATH is benefiting from investors' affinity for ESG ETFs. Now 14 months old, the ETF has eclipsed the widely watched $100 million in assets under management, a key barometer of success in the eyes of some ETF industry observers.

Importantly, CATH has been able to separate itself from the S&P 500 in terms of total returns. Over the past year, the Catholic values ETF is up 19.1 percent compared to 16.7 percent for the S&P 500.

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