Displaying items by tag: esg

Faith-based investing has become an increasingly important niche within sustainable finance, offering investors the opportunity to align their portfolios with Catholic values while still pursuing competitive returns. 

Funds such as Allianz Global Investors’ E.T.H.I.C.A. apply the Church’s social doctrine, emphasizing human dignity, social justice, and environmental care, while excluding sectors like abortion, weapons, or adult entertainment. Similarly, Invesco’s MSCI Europe ESG Leaders Catholic Principles ETF provides exposure to European firms that uphold Catholic ethics, combining strict exclusions with best-in-class ESG practices and achieving strong performance alongside transparency and affordability.

Investment houses like Tressis also integrate moral and financial discipline, using ethical commissions to ensure portfolios support social welfare, sustainability, and human rights, while excluding harmful industries. 

Finsum: These strategies reflect a growing movement where values-based frameworks coexist with robust investment performance, helping advisors tailor to clients.

Despite their volatility, natural resources remain an essential part of a diversified portfolio, both for their growth potential amid the energy transition and their inflation-hedging qualities. 

The Morningstar Global Upstream Natural Resources Index, which tracks companies tied to energy, metals, agriculture, timber, and water, shows that while commodities can be unpredictable, they tend to outperform when traditional assets falter. In 2022, for example, as stocks and bonds plunged together, the index gained more than 15% thanks to surging prices in oil, metals, and timber driven by inflation and supply disruptions. 

Recent years have favored technology-driven markets and left resource exposure underrepresented, inflationary pressures, geopolitical tensions, and the green energy shift may revive their relevance. 

Finsum: Ultimately, natural resources offer diversification and resilience, qualities that matter most when the rest of the market is under stress.

Although the term “ESG” has become controversial and sometimes viewed as a marketing label, about 69% of institutional asset owners still report using it—primarily for consistency. Many prefer alternative labels: 57% use “sustainable investment,” 53% “sustainability,” and 52% “responsible investment.” 

ESG considerations now apply to an average of 44% of asset owners’ AUM globally, up from 42% last year. In 2025, 20% of respondents said they apply ESG to more than 75% of their portfolios, and 10% said ESG applies to 100% of their assets. 

Asset owners increasingly see ESG as aligned with fiduciary duty: 61% agree ESG supports that role, up from 53% in 2024. 

Finsum: The biggest barrier to broader ESG adoption is concern over impacts on investment returns or a lack of standardized data and reporting. 

Faith-based ETFs remain niche but are expanding, with six launching this year and total assets now around $10 billion. These funds aim to align investments with religious values, though many end up resembling S&P 500 trackers with higher fees. 

Currently, there are 46 such ETFs in the U.S., 38 Christian, seven Muslim, and one Jewish, which have attracted about $832 million in inflows year-to-date. Some apply strict screens, like the Inspire 100 ETF (BIBL), which excludes firms tied to abortion, LGBT activism, or gambling, while others, like SPUS, filter out half the S&P 500 for Sharia compliance. 

By contrast, funds such as the JLens 500 Jewish Advocacy US ETF (TOV) and the Global X Catholic Values ETF (CATH) closely resemble mainstream products like Vanguard’s VOO, differing mostly in expense ratios. 

Finsum: Advisors must weigh whether these products are genuinely value-aligned investments or simply pricier versions of broad index funds.

Faith-based investing is gaining momentum as an alternative to ESG, with Christian financial firm GuideStone noting a surge in demand over the past three years. Will Lofland, GuideStone’s Head of Investments Distribution, explained that many investors began seeking values-aligned strategies during the COVID era, when intentional living and faith-driven financial decisions gained traction. 

Unlike ESG, which often emphasizes broad social agendas, faith-based investing focuses on applying Christian principles to business practices, from employee treatment to product integrity. 

Younger investors have been early adopters, but GuideStone reports growing interest among baby boomers, who hold a significant share of wealth. Lofland stressed that faith-based investing is not about driving social change but encouraging companies to concentrate on core business excellence while adhering to ethical standards. 

Finsum: With rising interest across generations, the strategy is emerging as a powerful opportunity for advisor when pitching clients in the broader investment landscape.