Global X expands Catholic values suite with global ex-US ETF

Jun 25th, 2020 | By | Category: Equities

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Global X has expanded its suite of faith ETFs with a new international equity fund providing exposure to large-cap stocks from developed markets excluding the US while screening out firms that do not adhere to Catholic principles.

Global X expands Catholic values suite with global ex-US ETF

Global X offers two Catholic values ETFs providing exposure to S&P 500 stocks as well as companies listed globally excluding the US.

The Global X Catholic Values Developed ex-US ETF (CEFA US) has listed on the Nasdaq Exchange and comes with an expense ratio of 0.35%.

Distributions are sent to investors on a semi-annual basis.

The fund tracks the S&P Developed ex-US Catholic Values Index which is based on the parent S&P EPAC ex-Korea Large Cap Index universe.

The methodology screens out companies with business activities that do not adhere to the Socially Responsible Investment Guidelines as outlined by the United States Conference of Catholic Bishops.

The United States Conference of Catholic Bishops is the episcopal conference of the Catholic church in the US.

Companies deriving any revenue from abortion, adult entertainment, biological and chemical weapons, contraception, nuclear weapons, stem cell activity, and the use of child labour will be excluded. Companies with up to 50% revenue exposure to conventional military sales will be allowed, however.

Constituents that make it through this screening process are weighted by float-adjusted market capitalization, while the index’s sector weights are set to match those of the parent universe. Index rebalancing occurs on a quarterly basis.

The index currently consists of 479 constituents. Stocks from Japan account for over one-third (36.1%) of the index, while the next largest country exposures are to the UK (10.3%), France (8.9%), Australia (8.3%), and Germany (8.1%).

The largest sector weights are financials (16.1%), healthcare (16.0%), industrials (14.3%), consumer staples (13.1%), and consumer discretionary (11.2%).

The fund complements the Global X S&P 500 Catholic Values ETF (CATH US) which launched in April 2016 and has accumulated over $330 million in assets under management. CATH, which comes with an expense ratio of 0.29%, currently provides exposure to 453 S&P 500 constituents, having screened out firms that fail to stand up to religious scrutiny.

Alex Ashby, Head of Product Development at Global X ETFs, commented, “We were thrilled to see the strong reception to our existing Catholic values ETF and are excited to introduce CEFA to further develop this fund suite. At Global X, we strive to continually provide investors with a range of tools that can help them efficiently attain their investment goals, whether that is diversifying one’s sources of income or aligning one’s investments with their personal beliefs.”

Global X is not alone in offering ETFs aimed at particular faith groups. California-based Inspire Investing offers a range of ‘biblically responsible’ ETFs targeting US large-cap, US mid- and small-cap, global, and global ex-US stocks, as well as a US corporate bond fund.

Security selection is driven by Inspire’s proprietary Impact Score methodology which also uses negative screening but goes further by ranking companies according to their positive effects on customers, communities, workplaces, and the world.

Its Inspire International ESG ETF (WWJD US) is notably more expensive than Global X’s recent launch, however, as the fund comes with an expense ratio of 0.80%.

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