Faith is the rock on which Catholics build their lives, from involvement in the Church, to their relationships and even how they manage their money. For Catholics who are looking to invest, faith-based investment practices provide the opportunity to manage wealth while also supporting businesses whose missions and practices align with Catholic teachings and beliefs.
The United States Conference of Catholic Bishops (USCCB) issued Catholic faith-based guidelines regarding the kinds of companies and securities in which Catholics should invest. While some investors may follow strong moral judgement in their trading, the USCCB guidelines are built with scripture and Catholic teaching at the core. Any investment practices that fall outside them may not fully align with Catholic faith and values.
Addressing the three moral screeners
Catholicism offers moral screens that differentiate between evil and good pursuits. Based on these screens, there are three areas of focus that Catholics should keep in mind for their day-to-day activities, and when they are looking to invest:
Catholic investors are called to purchase securities from companies that respect human life. Because the Catholic Church recognizes life from conception, it is not within Catholic values to invest in companies that profit off contraception or abortions. This guidance also applies to medicine, medical studies and vaccines that use embryonic stem cell research or any materials obtained from embryos or fetuses.
The USCCB guidelines also direct investors to steer clear of companies that discriminate on the basis of gender or race. The Catholic Church believes in the equality of all men and women, and that any discrimination based on race, gender, social conditions, etc. is offensive to the innate dignity all people possess. Pornography also diminishes dignity by reducing humans to mere sex objects. Any corporation that offends human dignity through pornography is doing evil work, and investments in those companies are not aligned with Catholic beliefs.
The Catholic faith recognizes violence to be evil. However, it understands that in this fallen world, it is sometimes necessary for nations to defend themselves and their people. With that in mind, Catholics should still work to create a more peaceful world through their daily actions and investments, avoiding companies which partake in the production of weapons. Additionally, Catholics should not invest in companies that create weapons outside of Catholic guidelines on war (e.g., biological or chemical weapons, weapons of indiscriminate mass destruction and nuclear weapons).
A people-before-profit mindset is also key when it comes to how Catholics may want to invest their funds. Catholics are called to do good work in their daily lives, and should take an active role in their investments, using their stake in companies to influence positive change. Investing can also allow Catholics to promote causes the Church recognizes as important, such as environmentalism, just wages, affordable housing and safe working conditions.
The Church cares about its members and recognizes the importance that investing can have for the financial security of its parishioners. It urges members to wisely manage their money so they can lead financially secure lives and contribute to Catholic causes. Catholics are called to base all their actions on the Church’s beliefs and values, and are directed to do the same when investing. Following these principles may help provide Catholics with financial security, while staying true to their beliefs and supporting good work in their communities and globally.
The Vehicle Driving Faith-Based Investments
Faith Investor Services (FIS) recognizes the importance of Catholic faith-based investing. To serve the Catholic community, FIS has created an exchange-traded fund (ETF) that invests only in companies aligning with Catholic values. Knights of Columbus Asset Advisors, which sponsors this ETF, invests with a desire to serve, a desire to follow and a desire to lead, while urging other Catholic investors to do the same. Knights of Columbus Asset Advisors is a subsidiary of the Knights of Columbus, which is the largest Catholic fraternal organization, seeking to help grow the Church’s and parishioners’ wealth through faith-oriented investing. With its sponsorship of FIS’ new Catholic values-based ETF, investors will gain exposure to a variety of securities, while knowing their money is supporting corporations that align with their faith.
Increasingly, clients are concerned that their portfolios be aligned with their values. Faith-Based investing has a dual mandate to generate investment returns in a faithful manner. The number of values-based investment offerings from institutional quality managers has been on the rise in recent years and continues to grow.
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