Catholic Investing in Stock Funds/Index

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I am beginning to invest to prepare for my retirement. Is it immoral to invest in an index fund knowing that a few companies included in the index could be running business contrary to Catholic morals? How significant really is my material cooperation with these companies?

Say, a pharmaceutical company is among the S&P 500 and contraceptives is only a small portion of the products the company produces. It seems that my investment amounts to something already miniscule.

Thinking about it, how strict should I be treading the economic world to avoid material cooperation? I might actually be buying something from a pharmaceutical company that also produces abortifacients without realizing it. I mean, which drug company do not produce them? Probably none.

I know there are funds that track S&P 500 and also filters the companies they include based on USCCB guidelines. However, their expense ratios are kinda high. Also, I want to diversify to include non-US markets and I have yet to find an international ETF that is Catholic guided.
 
Thanks for your reply Cruciferi. I don’t have a Financial Advisor. I’m mostly self-taught as I’m afraid most financial advisors would offer advice with conflicts of interest. I just beginning to invest and I’m trying to avoid some costs.

I did find a couple of threads on the same topic.
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Catholic Investing Moral Theology
Dear Cupofkindness, You asked how the fund equates with a secular fund. Here is the Ave Maria Value Fund for the last three years: (up 3.21% YTD, 3-star rating from Morningstar) money.cnn.com/quote/mutualfund/mutualfund.html?shownav=true&sid=691685&symb=AVEMX&time=3yr&compidx=aaaaa%7E0 Ave Marie Growth Fund for 3 years: (loss of 3% YTD, no rating) money.cnn.com/quote/mutualfund/mutualfund.html?shownav=true&sid=1437765&symb=AVEGX&time=3yr&compidx=aaaaa%7E0 Morningstar 5-star rated realty com…
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Catholic Mutual Funds Social Justice
Ave Maria is the only one that markets themselves that way, and as you say they underperform by taking a very narrow and mean spirited approach (in one investment goal) to what they look for. They do not take Catholic Social Teaching justice (pun intended) in their approach. I would be wary about any funds who market themselves as “Catholic” or any other religion, as they are often just buzz words. Some things to look for are funds who invest in companies who invest in their workers and the …
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One poster made a good point about fund investing. I agree that it’s a real headache to over scrutinize these companies. In the end, our contribution would probably just be a minuscule portion of the company. Also, it is really hard to avoid being materially involved in a company’s morally questionable practices in some way.

Point in case: the bank. Other than investing, the alternative for me to park my savings would be my bank. But guess what they also do while I park my money there - right, they also invest it in some company I might not approve of.

I can probably minimize my participation by investing in funds, which invest money in a diverse collection of companies, thus diluting any participation in any single company with immoral activity. In fact, I realized that funds marketing themselves as Catholic-guided still include the vast majority of companies in their portfolio.

I found Global X S&P 500® Catholic Values ETF (CATH). https://www.etf.com/CATH#overview
You can actually see a full list of holdings the fund has. It seems they’ve filtered out contraceptive producing companies like Johnson & Johnson or Merck. But they still include companies that were controversial for the company owner’s outspoken support for stances contrary to Catholic morals (ex. Starbucks and gay marriage). Google, I think belongs, to this category. But then again, I also use Google all the time so it shows it’s really impossible not to contribute in some way to these companies. The downside to CATH is it has way higher expense ratio compared to Vanguard’s VOO https://www.etf.com/VOO#overview , a similar ETF that includes the filtered companies (0.29% vs 0.04% = more than 7x more expensive).

Inspire 100 ETF (BIBL) https://www.etf.com/BIBL#overview appears stricter and doesn’t include even the top largest companies Apple, Amazon, or Google but as a result, does not seem to perform as well. It has a slightly higher expense ratio of 0.35. But on further reasearch, it seems they also invest in companies that in turn, invest their money in unfiltered funds. 😄

After all this, I might just diversify my investments to the entire market including low cost index ETFs, then add more weight to say 20 or so blue chip, Catholic consistent, handpicked stocks, and squeeze in CATH to a small portion just to give incentive to their attempt.
 
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As an end note, judging by the lack of replies, there seem to be quite a few in this forums who are well-versed in their financial future. If you are one of these (especially if you’re still quite young), I would recommend that you read books on financial literacy. You will probably lose a lot of potential gains by not knowing where to invest your money.

So much has been said about boycotting companies that use their money for agendas contrary to Catholic morals. That may be good if it can be done. But on the other hand, have you also thought of growing your money so that at some point, you can use it to do a lot of good?

Disclaimer: investing also carries a lot of risk, including losing all of your investment. I think the wisest way to reduce this risk is to invest regularly over the long term on the least risky investments. Short-term trading is very risky. Again, I think it’s necessary to study the basics of investing and financial management.
 
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