Column: The Catholic Investor
A serious Catholic, in my opinion, is called to bring the faith into all areas of life. No walling off makes sense if we are making a sincere effort to follow Jesus. Therefore, as I hope I have made clear in earlier articles, we should include our investment activities in those areas.
The U.S. Conference of Catholic Bishops (USCCB) has, for many years, published Socially Responsible Investment Guidelines which lay out how the bishops think investments should be made. In a nutshell, certain companies are to be avoided as investments due to their involvement in immoral activities.
Additionally, Catholics are called to engage company managements in dialogue when it’s discovered that they are involved in problematic endeavors in the hope of convincing them to change for the better. In short (very short): avoid evil and do good. For further explanation, please see the USCCB document itself.
The first standard based on Catholic morality
So, we have the one standard, one based on Catholic morality.
The problem is that it is very difficult to meet this standard. It is almost impossible to carry this mandate out successfully on one’s own due to the vast number of publicly traded companies, the number of issues and their complexity, the lack of corporate transparency on many of the issues in play, and the difficulty of any one individual beginning and maintaining a dialogue with top corporate managements.
Given those difficulties, it is often the case that the individual will turn to mutual funds or investment advisors that hold themselves out as offering authentic Catholic solutions. While offered with the best of intentions, the number of these investment professionals who offer complete adherence to the USCCB guidelines is vanishingly small. 
Some do not claim to follow the USCCB, while others do so claim, but only offer the exclusionary aspect of the guidelines. Remember, to adhere to the guidelines, it is necessary to both avoid evil and do good.
In addition, there are differing levels of success in adhering even to the exclusionary rules.
The second standard based on Catholic morality
The second standard is also contained within the guidelines: to earn an adequate rate of return.
What is adequate? There are two measures:
- a return commensurate with the appropriate market benchmark, or
- a return that allows the investor to achieve its financial objectives.
Only the first of these measures is available for inspection.
While I can’t claim knowledge of the success of ALL Catholic investment offerings, I do follow the progress of quite a few. I think that a review of their results could be best characterized as “a mixed bag”. Size, reputation, or marketing prowess are no guarantees of good results. It is incumbent on the Catholic investor to choose carefully.
Just DO it!
Ultimately, though, what is of utmost importance is making the decision to act. Make a commitment to bring your investments within your devotion to the Catholic faith. Do your research and make it happen!
RELATED RESOURCES:
- USCCB Socially Responsible Investment Guidelines – download or view online
- Understanding the USCCB’s Socially Responsible Investment Guidelines – Catholic Business Journal
- USCCB vs. ESG: What’s a Catholic investor supposed to do? – by Tom Carroll, CFA, Catholic Business Journal
Thomas "Tom" Carroll, CFA, is the president of Catholic Investment Strategies, a position in which he has passionately enjoyed serving since 2012. Prior to this position,... MORE »
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