Global X S&P 500 Catholic Values ETF (CATH US) – Portfolio Construction Methodology

The underlying S&P 500 Catholic Values Index delivers large-cap U.S. equity exposure by screening S&P 500 constituents for compliance with U.S. Conference of Catholic Bishops guidelines, then reweighting to preserve sector neutrality. Exclusions remove companies with: abortion, contraceptives, human embryonic stem cells, and controversial weapons (any exposure); adult entertainment production (any) and other involvement >5%; tobacco, recreational cannabis, gambling operations (>5%) or equipment/services (>50%); military contracting (>50%); or evidence of significant child-labor incidents. After exclusions, weights are proportional to each company’s float-adjusted market cap, with the aggregate weight of each GICS sector matched to the S&P 500 by redistributing the excluded weight within the same sector. The index rebalances quarterly on the third Friday of March, June, September, and December, aligning sector factors while minimizing tracking error to the parent universe.

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