Can the Holy See and other normative authorities harness profit-seeking systems… without undermining their purpose?

Markets have long been accused of lacking morality. On February 10, the Vatican decided to supply one. The Institute for the Works of Religion (IOR), commonly known as the Vatican Bank, partnered with Morningstar to launch two stock market indices designed to guide Catholic investors. The Morningstar IOR US Catholic Principles Index and the Morningstar IOR Eurozone Catholic Principles Index are “built following market best practices and in accordance with Catholic ethical criteria, and intended to serve as a global reference point for Catholic investing.”

According to reporting by Business Insider, the US index is heavily anchored, with more than twenty percent of the portfolio concentrated in firms such as Meta, Apple, Tesla and Alphabet. The European index remains more geographically and sectorally diverse, with holdings including ASML, Santander, Hermes and Deutsche Telekom.

The move marks a notable shift in tone from just over a decade earlier. In 2014 Pope Francis openly criticized financial markets and speculation. “It is increasingly intolerable that financial markets are shaping the destiny of peoples rather than serving their needs, or that the few derive immense wealth from financial speculation while the many are deeply burdened by the consequences.”

The Vatican is not the first religious institution to enter the world of faith-based investing. As MoneyWeek notes, smaller religiously oriented products already exist, including the FIS Christian Stock Fund ETF (ticker: PRAY) and Global X’s S&P 500 Christian Values ETF (ticker: CATH). Still, it is striking to see one of the world’s oldest moral authorities step directly into modern capital markets, no longer condemning them from the sidelines, but attempting to navigate them.

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