Should I invest in Catholic mutual funds?

Catholic mutual funds and stock filters exclude companies whose activities are identified as not consistent with the values of the Church, such as weaponry, tobacco, alcohol, gambling, or child labor.

Sounds great, right?

There’s a notable catch — in general these funds often come with higher expense ratios and lag the performance of the broader market (from what we’ve seen over time).

But there’s a larger question than just performance.

Before we get into it, we are financial advisors in Northern Virginia, serving clients in the surrounding area and across the country. We are loyal followers of Christ and lifelong Catholics, serving Catholic clients who seeking financial advice for their families.

Here are some blogs related to Catholic financial planning that you may want to check out:

5 Tips for finding a good Catholic financial planner

Is Catholic college worth it?

Am I not putting God first by wanting to grow my wealth?

And now onto the blog!

It’s hard to agree on a practical definition of “invest Biblically.” It’s often unclear where to draw a line in the sand. Most Catholics would bristle at the idea of investing in an abortifacient manufacturer, but what about “lesser offenses”? What about the big corporations such as Apple or Google who aren’t overtly breaking the rules in their core business activities, but may depart from Catholic values from time to time or in a larger effect on society? Is alcohol or tobacco production (and use) inherently evil? What about corporations who arm us for defense against global threats to freedom?

Given how often large companies also own shares of other companies, there’s a significant extension of associated participation in each other’s business activities.

The line gets gray pretty fast. Does the typical Catholic mutual fund exclude any company that has the potential to be inconsistent with Catholic social teaching, or is it less absolute, say only 5% or less of total business revenue? If so, are you really investing in accordance with Catholic values?

What may be a better practical approach is to discern and apply your own convictions to the stewardship of your own wealth:

  • Support companies that align with your own sense of Biblical stewardship;
  • Form a plan for charitable giving with your wealth;
  • Save and spend judiciously; and
  • Avoid doing business with those who depart from the Catholic values, whenever feasible.

By voting with your dollars (perhaps as a vocal shareholder or by withholding your investment), you might have impact on how companies behave. More impactful, though, will be the good you actively accomplish through the causes you directly support in your local community and beyond, with the ethical profits you reap in your portfolio of investments.

That’s our brief take on Catholic mutual funds and stock filters. For the right situation, these funds can be a solid tool, as long as they’re part of a holistic approach to Christian personal stewardship. Let us know if you want to meet and discuss your investments or any aspect of your wealth mission.
God bless,

We are Catholic financial advisors serving families in Manassas, Virginia, and the surrounding area. We create financial plans that help Catholic people make major life decisions as they pursue their life goals, and our advice is consistent with the teachings and doctrine of the Catholic Church. If you would like to meet with us, please set up a time to speak.

Timothy Mayer

Timothy Mayer is a Catholic financial advisor and a principal of PrimeauMayer Financial, a financial advisory firm that provides wealth management solutions to families, successful business owners and executives: investment management, financial planning, tax mitigation, effective wealth transfer to take care of heirs, asset protection, and magnification of charitable gifts.

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