PT  - JOURNAL ARTICLE
AU  - Rafika Shibly
AU  - Andrew Subkoviak
AU  - Paul Bouchey
TI  - Catholic Values and Direct Indexing: No Performance Penance Needed
AID  - 10.3905/jbis.2022.1.006
DP  - 2022 Mar 23
TA  - The Journal of Beta Investment Strategies
PG  - jbis.2022.1.006
4099  - https://pm-research.com/content/early/2022/03/23/jbis.2022.1.006.short
4100  - https://pm-research.com/content/early/2022/03/23/jbis.2022.1.006.full
AB  - In this article, we demonstrate that Catholic investors are able to own a market-like portfolio that is well aligned with their faith. We examine the MSCI USA Catholic Values index and the S&P 500 Catholic Values index. We show that the performance from 1998 to 2021 was largely in line with the base index, with some outperformance observed in the recent ten-year period. We highlight a direct indexing method for reducing performance variations observed in the standard Catholic values indices. Using less restrictive screens and optimization methods, we create a portfolio with reduced tracking error relative to the target index. We also discuss applications to global markets, taxable investors, and the issue of active ownership.