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What Are Catholic Values Investment Strategies?


People like to invest with their values and beliefs in mind. You may have heard of investing styles like ESG investing or biblically responsible investing. One investment strategy is Catholic values investing. Let’s define what Catholic investing is, give you an example, and how to screen for it.

Regardless of your religious affiliation, a financial advisor can help you get on the right track.

What Is Catholic Investing?

Catholic values investing is an approach to investing that seeks to ensure investments align with the values of the Roman Catholic Church. It’s used by Catholic institutions and individuals who want their values to be represented in the investments they hold. With this approach, investors can ensure their portfolio reflects the teachings of the Roman Catholic Church as expressed in its Magisterium, encyclicals and various Vatican edicts and documents.

While Catholic values investing began in the 1960s, this general approach to investing in a religiously compliant way dates back further. Quakers and Methodists started investing this way in the 1800s when they stood against the slave trade and backed up their beliefs with their money.

In 2003, the church established the Principles for the United States Congress of Catholic Bishops (USCCB) Investment Guidelines. These principles clearly define how Catholic investors should approach investing.

Examples of Catholic Investing

What are catholic values investment strategies?

Catholic investing prohibits investing in companies that take part in activities that it morally opposes. For example, if a medical company decides to start undertaking stem cell research, Catholic values investors will divest from this company. Similarly, if that company is part of an exchange-traded fund (ETF), Catholic investors will pull their money out of that fund. The same would go for corporations that receive more than a certain percentage of their revenue from producing or selling contraceptives.

If this company receives considerable funding from Catholic investors, investors may direct the company to avoid making a decision that would alienate their investors. Catholic investors (and their portfolio managers) aren’t passive owners.

While Catholic investing does emphasize an exclusionary approach to investing, it’s also about supporting companies doing good. For example, a company that empowers and provides aid to communities in need could attract more Catholic investors.

Screening for Catholic Investing

Part of Catholic investing is screening companies to determine which falls within the morals of the Church. With this screening, Catholic investors want to exclude companies that participate significantly in areas that the Church deems diminishing of human life and dignity.

Catholic investors also use inclusionary screening for companies that it deems to have a positive impact on society. The USCCB outlines the five categories that Catholic investors should use to screen. They are:

  1. Protecting Human Life
  2. Protecting Human Dignity
  3. Enhance the Common Good
  4. Pursuing Economic Justice
  5. Saving Our Global Common Home

Here are some of the negative and positive screening factors Catholic investors use.

Negative Screening Factors

These are areas where Catholic investors want to avoid companies that participate in:

  • Racial and gender discrimination
  • Human rights violations
  • Tobacco and other harmful drugs
  • Pornography and other forms of adult entertainment
  • Manufacturing of weapons, from nuclear bombs to firearms
  • Predatory lending

Positive Screening Factors

Catholic investors want to promote companies that participate in:

  • Growing access to affordable housing
  • Improving the environment and climate
  • Have high-quality corporate and social governance and responsibility
  • Have an impact on depressed communities
  • High labor standards, including safe workplaces and good wages

Who Are Catholic Investors?

What are catholic values investment strategies?

While you may think of Catholic investors as individuals (and they often are), major groups are institutions. Because they’re a large group of investors banded together, they can hold more sway with the companies and organizations they’re invested with. Besides individuals and families, here are some examples of institutional Catholic investors:

  • Educational systems: Catholic and Jesuit K-12 school systems, as well as universities, colleges and seminaries.
  • Catholic healthcare and services: Catholic hospitals, clinics, outreach centers and social work organizations.

How to Start Investing with Catholic Values

Once you’ve decided to start investing with your values, you need to make a plan. This is where a relationship with a financial advisor comes in handy. You can write a statement of intent, specifically listing the areas you want to avoid, as well as the areas you want to include.

Just as there are different approaches to Catholicism, there are different approaches to Catholic investing. Know that this process can take time, but with dedication, research and education, you can make sound investments that align with your values.

The Bottom Line

Catholic investing is a type of values-based investing, like ESG or impact investing. It focuses on making investments that align with the Church’s mission of preserving and promoting human life and dignity. Participants include large institutions as well as families and individuals. If you’re curious about Catholic values investing and want to know more, consider reaching out to your local parish or contacting your financial advisor.

Investing Tips

  • If you’re interested in Catholic investing, talk to a financial advisor about making your investments values-based. Finding a financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with up to three vetted financial advisors who serve your area, and you can interview your advisor matches at no cost to decide which one is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
  • With inflation having risen quickly recently, you need to weigh its impact on your portfolio. SmartAsset’s inflation calculator gives you an estimate of how much your assets could be worth in the future considering the rate of inflation.

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