Vatican Bank and Morningstar Launch Catholic Index Funds Focused on Ethical Investing
The Vatican’s financial institution has entered a new partnership with global investment research firm Morningstar to introduce equity indexes designed around Catholic moral and social principles. The initiative marks a rare collaboration between the Holy See’s financial arm and the international investment sector, reflecting growing demand for faith aligned investment products.
The Vatican bank, formally known as the Institute for the Works of Religion, confirmed that the new indexes are intended to guide investors seeking portfolios consistent with Catholic teaching. Each index is composed of fifty medium and large capitalization companies selected for their alignment with Church positions on the protection of human life, social responsibility, and environmental stewardship.
The two new benchmarks are titled Morningstar IOR US Catholic Principles and Morningstar IOR Eurozone Catholic Principles. They are designed to serve as reference points for asset managers and fund providers interested in building products that integrate faith based ethical screening with mainstream equity exposure. According to Morningstar, the methodology applies exclusionary and positive criteria to ensure consistency with Catholic moral doctrine.
In the eurozone index, leading holdings include technology and industrial companies such as ASML Holding, Deutsche Telekom, and SAP, reflecting an emphasis on established firms with strong governance and global reach. The indexes aim to balance moral considerations with financial performance by maintaining sector diversification and liquidity standards comparable to conventional equity benchmarks.
Faith based and values driven investing has expanded steadily over the past several decades, particularly in the United States and Europe. Catholic oriented investment strategies already represent a significant segment of this market. Ave Maria Mutual Funds, a U.S. based fund family that applies Catholic principles to portfolio construction, reported assets under management of approximately three point eight billion dollars in 2025, underscoring investor appetite for such products.
The launch of the new indexes also carries institutional significance for the Vatican bank, which has spent the past decade working to strengthen transparency and credibility. The bank’s reputation suffered in previous decades due to financial scandals involving corruption and mismanagement. In response, a series of reforms were introduced under the late Pope Francis, including stricter oversight, governance reforms, and alignment with international financial standards.
By partnering with Morningstar, the Vatican bank is signaling an intention to operate within globally recognized frameworks while maintaining a distinct ethical identity. Morningstar brings technical expertise in index construction and sustainability research, while the IOR provides the moral framework rooted in Catholic social teaching. Together, the two institutions aim to demonstrate that ethical discipline and professional investment standards are not mutually exclusive.
The indexes are not investment products themselves but are expected to serve as the foundation for future funds and structured products developed by asset managers. Their introduction comes at a time when institutional and retail investors alike are reassessing how values, sustainability, and long term responsibility fit into portfolio decisions.
The collaboration reflects a broader trend in which religious and ethical institutions are engaging more directly with financial markets to influence corporate behavior, promote responsible capitalism, and align capital allocation with moral priorities.
