Fund designed for investors who want the performance of the S&P 500 Index without all the exposure to weapons, adult entertainment and other traditional Catholic no-nos.
Global X Funds has dipped its toe into the world of social screening with an exchange-traded fund designed for investors who want the performance of the S&P 500 Index without all the exposure to weapons, adult entertainment and other traditional Catholic no-nos.
The Global X S&P 500 Catholic Values Index ETF (CATH), which began trading on Tuesday, tracks an index that screens out companies deemed to be violating a list of Catholic values with minimal tracking error to the broader S&P 500 Index.
“This is our first fund in the values category, but we've been looking closely at the (socially responsible investing) space to provide some different ways to invest in religious and social values,” said Jay Jacobs, director of research at Global X Funds, which has 47 ETFs and $3 billion under management.
Mr. Jacobs said the new ETF is designed to give smaller investors the ability to invest the same way as much larger institutional investors that have the resources and abilities to apply such portfolio screens on their own.
He wouldn't share specifics, but he acknowledged that the Catholic Values ETF is the first in what will become a suite of funds that screen for various religious, social, and environmental causes and beliefs.
“We're evaluating the broadest definition of the space,” Mr. Jacobs said. “It comes back to the idea that these are strategies that have been available to institutions for years.”
Todd Rosenbluth, director of mutual fund and ETF research at S&P Capital IQ, described the Catholic Values ETF as in line with the trend of younger generations investing in ways to align with their core beliefs.
“There's a new generation of investors that are looking for things that fit in better with who they are as a person, and this is a product that fits very well into that approach,” he said. “The investors are open to looking at the broader index sliced up based on different criteria tied to social and environmental, and in this case, based on beliefs.”
Mr. Rosenbluth put the new ETF in the same category at the SPDR SSGA Gender Diversity Index ETF (SHE) that was launched a month ago to appeal to investors focused on gender diversity issues.
The S&P 500 Catholic Values Index, which the ETF tracks, 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 and exclude those that do not.
