Vatican Bank makes first foray into equity indexes, setting stage for potential ETF launches

The Vatican Bank Tuesday launched two equity indexes tracking stocks that align with Catholic values. Its first foray into thematic investment products sets the bank up to potentially roll out other financial products, including ETFs in the future.  

The bank, which reports to the Committee of Cardinals and the Pope, said Tuesday in a statement that the Morningstar IOR Eurozone Catholic Principles Index and the Morningstar IOR U.S. Catholic Principles Index include 50 medium and large-cap firms deemed to be consistent with Catholic ethical criteria, including prioritizing human bonds and social justice. 

“Having benchmarks built in accordance with recognized Catholic ethical criteria allows us to make our performance assessment and reporting processes even more rigorous and transparent,” Giovanni Boscia, Vatican Bank deputy director general and CFO, said in the statement. “This initiative reaffirms our commitment as a financial institution serving the Church, further strengthening the role of the [Vatican Bank] as a reference point for the Catholic world.”

The Eurozone fund counts semiconductor supplier ASML Holding and telecommunications company Deutsche Telekom among its top holdings, while the US-based index’s largest holdings include Meta Platforms and Amazon. 

Their rollouts also open up the possiblity the indexes could be licensed for use in an exchange traded fund.  

The debut comes as investors’ appetite for ETFs and other thematic investment products grows. The global ETF market increased nearly 30% to top $14 trillion in 2024, per PricewaterhouseCoopers. And, the combined value of those funds could hit as much as $30 trillion by 2029, according to a PwC report dated March 2025.

Meanwhile, investment products rooted in social responsibility and other themes are appealing to certain slice of investors. The Ave Maria Mutual Funds, a fund family that allocates capital in accordance with Catholic teachings, said it had $3.8 billion in assets under management as of last year, per its website.  

The Vatican Bank has been working to reform its image after a series of scandals. The Holy See-linked financial institution has faced several allegations of money laundering and ties with organized crime, particularly after the collapse of Milan-based Banco Ambrosiano in 1982. In 2021, former Vatican Bank president Angelo Caloia was found guilty of money laundering and embezzling millions of euros in connection with his role at the institution.