Wealth Management
Two leading proxy advisors, ISS and Glass Lewis, have partnered with the Catholic University of America (CUA) to create investment voting guidelines grounded in the U.S. Conference of Catholic Bishops’ (USCCB) principles. The collaboration, led by CUA professors Andrew Abela and Nicholas Schmitz, aims to ensure that investors’ proxy votes align with Catholic moral and social teachings.
Under the new framework, proposals that conflict with Church doctrine—such as those funding abortion or gender-transition procedures—will be opposed, while issues without clear moral guidance will defer to company management or abstain.
After discussions with CUA, both firms recognized demand for authentic faith-based voting services and agreed to develop new policies faithful to Church doctrine.
Finsum: The guidelines, can help advisors of build better connection for clients of faith, by offering an ESG alternative.
Collective Investment Trusts (CITs) are becoming increasingly prevalent in retirement plans, with over 78% of defined contribution (DC) plans offering them, making them the second most common investment option after mutual funds. CITs serve as cost-effective, tax-exempt pooled investment vehicles offered through banks or trust companies, delivering many benefits of institutional accounts alongside accessibility for retirement plans.
Compared to mutual funds, CITs often feature lower administrative and compliance costs, and their fee flexibility and eligibility for smaller plans enhance their appeal for sponsors and advisors. They are available only to qualified retirement plans under ERISAand are not open to IRAs or certain other tax-advantaged arrangements
While CITs may mirror mutual fund strategies, slight performance differences can arise due to varying fee structures, cash flows, and corporate-wrapper mechanics.
Finsum: Fiduciaries should consider the switch from mutual funds to CITs, the transition process is relatively straightforward.
Markets entered 2025 on strong footing but were quickly rattled by earlier-than-expected U.S. tariff actions, delaying anticipated rate cuts and fueling volatility across equities, Treasuries, and currencies. AllianceBernstein expects moderate—not recessionary—growth in the second half, with fiscal and trade policy, Fed actions, and geopolitics serving as key macro drivers.
Credit markets have shown resilience, and despite tighter spreads, elevated yields make high-quality issuers—particularly BB-rated bonds—attractive for income and risk management. With inflation expected to peak by the third quarter, the firm favors short-to-intermediate bond maturities to balance yield opportunities against interest-rate risk.
Equity markets, while volatile in early 2025, have since broadened beyond U.S. tech leaders to global and value-oriented sectors, especially in Europe where banks and dividend payers stand out.
Finsum: Multi-asset income strategies as well-positioned for this uncertain backdrop, combining yield, diversification, and adaptability amid shifting policy and market conditions.
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Free cash flow (FCF) is a critical measure of financial health, showing how much cash a company can reinvest or return to shareholders after covering essential costs. In the small-cap arena, where profitability is often limited, strong FCF can distinguish higher-quality businesses with better growth prospects and lower valuation risk.
The VictoryShares Small Cap Free Cash Flow ETF (SFLO) seeks to capture this advantage by tracking an index that emphasizes both historical and projected FCF performance. By filtering out slower-growing firms and prioritizing those with robust FCF yields, SFLO aims to balance growth potential with disciplined valuation.
Its broad small- and mid-cap universe also enhances liquidity and diversification, making it a potentially appealing option for investors seeking targeted small-cap exposure with a quality bias.
Finsum: Since a large share of small-cap companies remain unprofitable, focusing on those with consistent FCF can improve portfolio stability.
Amid growing advisor interest in fixed income, American Century’s Joe Gotelli highlights municipal bonds as a timely opportunity, especially after recent market dislocations tied to fiscal uncertainty and tariff concerns.
Despite early 2025 volatility, muni valuations remain appealing compared to taxable bonds, offering tax-free income and potential for excess returns as the Fed nears possible rate cuts. Gotelli notes that long-duration, high-quality muni assets may benefit in a softening growth environment, positioning investors for attractive long-term yields.
American Century’s active muni ETFs—such as the Diversified Municipal Bond ETF (TAXF) and California Municipal Bond ETF (CATF)—use flexible strategies to manage duration, credit quality, and sector exposure while maintaining tax efficiency. Gotelli emphasizes Active management provides an advantage over passive approaches by allowing deeper credit research and selective exposure to specialized sectors like charter schools and tobacco settlement bonds.
Finsum: Active ETF Fixed Income, gives investors innovative tools to navigate complex tax and interest rate dynamics.
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.