Introducing the Global X S&P Catholic Values Developed ex-U.S. ETF (CEFA)

On June 24, 2020, the Global X S&P Catholic Values Developed ex-U.S. ETF (CEFA) began trading on Nasdaq. CEFA provides exposure to large cap companies in developed markets outside of the U.S., whose business practices adhere to the Socially Responsible Investment Guidelines of the United States Conference of Catholic Bishops (USCCB).  

An International Equity Fund That Aligns with Religious Values

With its recent launch, the Global X Catholic Values Developed ex-U.S. ETF (CEFA) joins the Global X S&P 500 Catholic Values ETF (CATH) in providing broad equity market exposure that adheres to Catholic investment guidelines. While CATH focuses on US equities, using the S&P 500 as its starting universe, CEFA provides international equity exposure. Its starting universe is the S&P EPAC ex-Korea Large Cap index (a benchmark for developed ex-U.S. markets), and the companies in the parent index are then screened to remove those whose business practices do not adhere to adhere to the investments guidelines outlined by the United States Conference of Catholic Bishops (USCCB).

CEFA: How it Works

CEFA tracks the S&P Developed ex-U.S. Catholic Values Index, which employs a three-step process to align its exposures with Catholic investment guidelines while reducing tracking error to broad international equity benchmarks.

  • Step One: To eliminate exposure to activities inconsistent with Catholic values, as defined by the USCCB, CEFA applies a revenue screen to exclude companies that have exposure to certain activities inconsistent with the Catholic faith, such as biological or nuclear weaponry and child labor employment.

Catholic Values Revenue Screen

  • Step Two: To reduce tracking error to international equity benchmarks, the remaining companies are re-weighted to match the sector weights of the S&P EPAC ex-Korea Large Cap index.
  • Step Three: Index components are reviewed and re-balanced on a quarterly basis to maintain the relevancy of steps 1 & 2.

Apart from tracking the underlying index, a critical piece of fund management is voting proxies on behalf of the fund’s shareholders. Proxy voting will be conducted via Glass Lewis & Co.’s guidelines on Catholic Policy.  Glass Lewis has structured a Catholic voting policy based largely on the principles set forth by the USCCB, which is the same set of principles used to create the filters for the index tracked by CEFA.

Portfolio Fit: International Benchmark-like Exposure

CEFA is designed to provide investors with broad benchmark-like exposure to developed ex-U.S. international equities. Therefore, in a Catholic- oriented portfolio, it could be a core piece of an equity allocation. Based on the S&P Global BMI Index, developed ex-U.S. exposures represent nearly one-third of the global equity universe.

S&P Global BMI Index


Aligning investments with one’s religious values can be a difficult task for individuals. Reviewing hundreds of companies’ business practices, trading in international markets, and thoughtfully voting proxies can take substantial time and resources. CEFA is designed to make this process efficient for investors by aligning its investments and voting with Catholic guidelines and reducing tracking error to international benchmarks. By utilizing CEFA, Catholic investors may invest responsibly and consistently with their faith by integrating their values into their portfolios.