In February 2026, the Vatican’s Institute for the Works of Religion (IOR) officially entered the world of index-based investing. By partnering with Morningstar, the Vatican launched two specific benchmarks designed to align global capital with the Social Doctrine of the Catholic Church.+1
Here is a breakdown of what these indexes look like and the logic behind them.
The Two New Benchmarks
Both indexes focus on the 50 largest companies that meet strict ethical screens within their respective regions:
- Morningstar IOR US Catholic Principles Index: Tracks 50 medium- and large-cap U.S. companies.
- Morningstar IOR Eurozone Catholic Principles Index: Tracks 50 medium- and large-cap companies within the Eurozone.
Selection Criteria: The “Catholic Screen”
The indexes are built upon five core principles derived from Papal encyclicals (notably from Pope Benedict XVI and Pope Francis) and the 2022 Vatican document Mensuram Bonam (“A Good Measure”).
- Human Life: Protection of the sanctity of life from conception to natural death.
- Environmental Stewardship: Following the “Integral Ecology” themes of Laudato si’, focusing on climate protection and sustainability.
- Social Justice: Respecting labor rights, fighting financial corruption, and adhering to UN Global Compact standards.
- Combating Addictions: Screens out companies profiting significantly from tobacco, alcohol, and gambling.
- The “No-Go” List: Explicit exclusions include manufacturers of military weapons, providers of abortion services or contraceptives, pornography, and companies with significant revenue from coal or oil and gas production.
Top Holdings: A Tech-Heavy “Holy” Portfolio
Interestingly, because the indexes focus on “best-in-class” large-cap companies that pass these screens, the U.S. index looks remarkably like a standard tech-heavy portfolio. As of the launch, some of the top constituents included:
| US Catholic Principles Index | Eurozone Catholic Principles Index |
| Meta Platforms (Facebook/Instagram) | ASML Holding (Semiconductors) |
| Amazon | Deutsche Telekom |
| NVIDIA | SAP |
| Tesla | Banco Santander |
| Apple | Hermès |
Why This Matters
This move represents a shift for the Vatican from passive avoidance (simply not owning “bad” stocks) to active standard-setting. By creating a formal index, the Vatican is providing a transparent, measurable “yardstick” for Catholic dioceses, religious orders, and lay investors worldwide to use for their own portfolios.+1
It also signals the professionalization of the IOR, moving away from its historical reputation for opacity toward a modern, rules-based framework.
Since their launch on February 10, 2026, the Vatican’s new Morningstar indexes have been put to the test in a fast-moving market. Because these indexes only launched a few weeks ago, the performance data represents a “short-term snapshot” rather than a long-term trend.
As of mid-February 2026, here is how the Morningstar IOR US Catholic Principles Index compares to its primary benchmark, the S&P 500.
US Market Performance Comparison (Feb 10 – Feb 20, 2026)
| Index | Performance (Since Launch) | Key Drivers |
| IOR US Catholic Index | ~-1.70% (YTD) | High concentration in Tech (Nvidia, Meta, Amazon). |
| S&P 500 | ~-0.85% (Launch to Date) | Broader diversification across Energy and Defense. |
Analysis: Why the Divergence?
- The “Tech Beta” Effect: The Vatican’s US index is highly concentrated in 50 large-cap stocks. Because it excludes many “old economy” sectors like traditional Defense and Energy (oil/gas), it leans heavily into Big Tech. In a week where the tech sector saw a slight cooling off (specifically in AI-related hardware), the IOR index felt the dip more acutely than the broader, 500-stock S&P 500.
- Exclusions and Opportunity Cost: The S&P 500 currently includes several major defense and energy companies that have performed well due to ongoing geopolitical tensions. Since the IOR index excludes these on ethical grounds, it didn’t benefit from their recent gains, leading to slight underperformance relative to the broader market.
- Eurozone Outlook: Interestingly, the Eurozone Catholic Principles Index has fared slightly better in the same period (up +1.97% YTD), bolstered by strong performance in European luxury (Hermès) and semiconductor equipment (ASML), which are “clean” stocks under Catholic criteria.
Summary
Analysts at Morningstar and Global X have noted that while these indexes will likely carry a “higher market beta”(more volatility) due to their concentration in 50 stocks, they are designed for the long term. The Vatican’s goal is not to “beat” the S&P 500 every week, but to prove that a portfolio can remain competitive while strictly adhering to a moral framework.
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