Fixed income, meanwhile, performed somewhat better, especially in the longer-duration segments, supported by the decline in long-term interest rates. As you know, bond prices move inversely to interest rates. In contrast, short-term maturities performed less favorably.

• S&P 500: -1,06% 
• Nasdaq: -0,19% 
• Stoxx Europe: +2,51% 
• MSCI All Country World Index (EUR): +1,32% (The dollar rose 1.80%; the USD index fell 0.92%.)
• Global Fixed-Income Index (EUR): +1.35% (The dollar rose 1.80%; the USD index rose 0.24%.)

Why did technology and growth stocks struggle this month?

The second quarter had been very positive for these types of companies, especially those most closely tied to technology, artificial intelligence, and structural growth. Following strong cumulative gains, many investors took advantage of June to take profits and reduce their exposure to the segments that had performed best.

Rather than a single trigger, the move appears to be driven by a combination of factors:

• Strait of Hormuz.

On June 14, a preliminary agreement was announced to reopen the Strait of Hormuz and lift the U.S. naval blockade, although its implementation was pending formal signing. Since then, the reopening has been taking place gradually and with great caution.

In practice, the lifting of the blockade does not imply an immediate return to normal maritime traffic. Significant issues remain to be resolved, such as mine clearance, safety guarantees for navigation, and the possible imposition of tolls or controls by Iran.

Although the agreement is positive news, traffic through the strait is still far from returning to pre-war levels, as can be seen in the image.

Source: Bloomberg

The number of ships passing through the Strait of Hormuz each day remains well below normal levels: about 32 vessels, compared to more than 100 under normal conditions. This situation reflects the fact that the United States and Iran have not yet reached a final agreement on the terms of the Memorandum of Understanding.

The lack of clear progress maintains a high degree of uncertainty, and as a result, the risk of further upward pressure on energy and other commodity prices remains. Reduced security in the region and tighter supply could lead to additional price pressures.

As of July 8, at the time of writing this commentary, President Trump declared that the agreement was terminated following new attacks linked to Iran in the Strait of Hormuz, which once again increases uncertainty regarding the normalization of maritime traffic in the region.

• Oil Price.

Since news began to emerge of progress toward the signing of a Memorandum of Understanding between the United States and Iran, the price of oil has corrected sharply, falling from levels near $100 per barrel to below $70.

This decline reflects the market’s anticipation of a possible gradual normalization of maritime traffic in the Strait of Hormuz and, consequently, a lower risk of disruptions to energy supplies. However, until the agreement is fully implemented and doubts about security in the region persist, the price of oil will remain highly sensitive to any news related to the conflict.

As shown in the chart below, the price of crude oil has experienced a sharp correction from the highs reached during the period of heightened geopolitical tension.

Source: Bloomberg

Furthermore, the United States’ strategic oil reserves have helped cushion the impact of the supply crisis so far. These reserves exist precisely for exceptional situations like the current one, in which there are significant disruptions in the energy market.

However, the United States cannot rely on them indefinitely. The cumulative decline in reserves, as shown in the chart below, makes it clear that this support mechanism has its limits. Therefore, if the situation drags on and supply does not return to normal, the market could once again face increased pressure on oil prices.

Source: Bloomberg

It is worth noting that these reserves refer to the total amount of crude oil available in the United States—that is, both commercial inventories and strategic reserves. The chart shows that the country’s oil “buffer” has shrunk significantly.

This means that the market has less of a safety margin against potential supply shocks. Consequently, any new disruption could have a more significant impact on crude oil prices.

• Inflation.

It seems clear that investors are not entirely comfortable with the trend in inflation. As noted earlier, the current environment remains marked by a high degree of uncertainty, particularly due to risks associated with energy prices and potential supply disruptions.

In this regard, the chart shows how both the CPI and the PCE (Personal Consumer Expenditures) have recently rebounded, reinforcing market concerns about the possible persistence of inflationary pressures. This scenario could limit the Federal Reserve’s room to maneuver and delay future interest rate cuts.  

Source: Bloomberg

Although the main factor behind the rise in inflation has been the increase in energy prices, there are other factors that are also putting pressure on the macroeconomic outlook. These include the persistent fiscal deficit, the strength of the labor market, and the acceleration of capital investment related to artificial intelligence.

Regarding this last point, Savita Subramanian of Bank of America noted the following: “Since November, most hyperscale companies  have seen their metrics deteriorate: cash flow conversion has stagnated, the supply of investment-grade stocks and bonds has increased, share buybacks as a percentage of market capitalization have slowed, and capital expenditures as a percentage of operating cash flow for these companies are projected to reach nearly 100% by year-end, up from 40% in 2023.”

These companies’ investment forecasts continue to rise, supported primarily by two sources of financing: debt issuance and stock sales. This increase in capital spending is driving greater demand for equipment, infrastructure, and specialized services, which may put upward pressure on suppliers’ prices.

Here’s the key point: on the one hand, investment in artificial intelligence is driving demand; on the other, geopolitical tensions and disruptions in the Strait of Hormuz may limit supply and drive up the cost of energy and other raw materials. The combination of stronger demand and tighter supply may intensify inflationary pressures.

• Speech by Kevin Warsh, the new chair of the FED.

On June 17, the new Fed chairman, Kevin Warsh, announced that interest rates would remain unchanged, although investors perceived a slightly hawkish tone (suggesting a rate hike) as he focused on restoring the Fed’s anti-inflation credibility.

What inflationary risks might explain Warsh’s cautious tone? The recent spike in inflation likely led Warsh to repeatedly emphasize price stability as one of the Federal Reserve’s primary objectives. Furthermore, it is worth remembering that 2026 is an election year in the United States, and voters tend to react particularly negatively to rises in energy and food prices.

The market has priced in this message, particularly through a rise in yields on short-term maturities, which implies a decline in the price of those bonds. The chart shows the yield on the 1-year U.S. Treasury note, which has risen significantly since the start of the war.

Source: Bloomberg

This rise reflects market expectations regarding interest rate trends over the next 12 months. Therefore, when the yield on the 1-year Treasury note rises, it typically indicates that investors are pricing in the possibility that the Fed will keep rates high for longer—or even that it might be forced to raise them again.

However, a particularly interesting development has occurred this month. The following chart compares the yield on the 1-year U.S. Treasury bond—represented by the dark blue line—with the trend in oil prices—represented by the light blue line.

Source: Bloomberg

The curious thing is that, when oil prices rise, interest rates quickly follow suit due to fears of a spike in inflation. However, when oil prices correct, interest rates do not fall back with the same intensity.

Why does this happen? Probably because the market is not viewing the movement in oil prices as an isolated factor, but rather within a broader context of inflationary uncertainty. Even though the price of crude oil has fallen, other risks remain: geopolitical tensions, lower reserve buffers, fiscal pressure, a strong labor market, and heavy investment in artificial intelligence.

In other words, interest rates seem to be sending a message: the ultimate impact on inflation and monetary policy is still unclear. As Eric Robertsen of Standard Chartered noted:

“Oil-related volatility may have subsided, but we expect it to be replaced by interest rate and currency volatility in the second half of the year. Enjoy this respite; in our view, it is likely to be temporary.”

•  But, What happened to the gold?

If investors anticipate higher interest rates, the opportunity cost of holding gold increases, since gold does not pay coupons or generate periodic income. Conversely, if a short-term U.S. Treasury bill offers an attractive yield, holding gold becomes less appealing, especially if real yields also rise.

That said, the price of gold has fallen by approximately 25% from its January high and is down nearly 6% year-to-date. The strength of the dollar has been a major headwind, but supportive structural factors remain in place: central bank purchases, interest in gold-backed assets, and high government spending. The question, therefore, is whether this correction might represent a buying opportunity.

Finally, I’d like to discuss SpaceX’s initial public offering (IPO) and how it might impact both passive and active investing.

This company, founded by Elon Musk, went public on June 11 and, in just a few days, became the fifth-largest company in the world, surpassing even Amazon in market capitalization. Additionally, it is expected to be added to the Nasdaq index soon.

This move comes amid a period of strong activity in the IPO market, particularly among companies involved in artificial intelligence. Many companies are capitalizing on the high level of investor enthusiasm for the sector and very high valuations. In practice, an IPO involves the sale of shares to the public by founders, partners, or existing shareholders. When valuations are attractive, these shareholders may see a favorable opportunity to monetize part of their investment.

In this same context, the market is also anticipating potential IPOs by Anthropic and OpenAI, two of the most prominent companies in the artificial intelligence ecosystem and highly attractive to investors.

How does this affect passive management? If these companies are included in the major indices, they will be assigned potentially significant weightings, forcing index funds to purchase them in proportion to their market capitalization. This can generate very significant buying flows and increase the indices’ concentration in a small number of companies.

Furthermore, the rise of passive investing and constant benchmarking have changed the way risk is measured for actively managed funds. A 5% position in Nvidia may seem high in absolute terms. However, if Nvidia accounts for about 7.9% of the S&P 500, that 5% means the fund is underweight relative to the index. In this context, if the company continues to post strong gains, the fund could lag behind its benchmark—not because it lacks exposure to that company, but because its weighting is lower than that of the index itself.

At Altum, we believe it is more prudent to invest in equally weighted indices—where all companies have the same weighting—rather than relying excessively on a small group of companies, many of which belong to the same sector. Even though these companies have performed exceptionally well recently, their growing weight in the indices adds a concentration risk that we consider unnecessary.

Read here our latest Market Reviews.

• S&P 500:  +5.26%
• Nasdaq: +10.59%
• Stoxx Europe: +3.22%
• MSCI All Country World Index (EUR): +6.04% (the dollar rose 0.62%, the index in USD rose 5.21%).
• Global Fixed Income Index (EUR): +0.86% (the dollar fell 0.62%, the index in USD rose 0.62%).

While indices continue to rise, inflation remains stubbornly high, central banks have adopted a more hawkish tone, and the conflict in the Middle East keeps oil as a key variable for the coming months.

Despite the market signals regarding inflation and interest rates, equities have rebounded strongly since late March.

Source: Bloomberg

Nasdaq led the rally, outperforming the S&P by a factor of two and the European index by a factor of four. The Nasdaq’s gains were driven by tech companies, and while one might assume that the “Magnificent Seven” are once again the ones surging and driving the indices higher, that is not the case this time. Here is how they have performed so far this year:

• Alphabet (Google): +21.51%
• Amazon: +17.25%
• Apple: +14.79%
• Nvidia: +13.21%
• Tesla: -3.10%
• Meta: -4.18%
• Microsoft: -6.90%

Only one of them outperformed the Nasdaq!, and three fell! But then, who is rising? We can no longer use the excuse that if you don’t own these seven, you won’t beat the market. Who has been leading the market? Between February, March, and April, there were announcements of these major companies’ estimated investment in artificial intelligence (AI) for 2026—80% more than in 2025—and who benefits? This chart shows the main beneficiaries: semiconductors, data centers, cybersecurity, and power grid infrastructure—and all of them have outperformed the Nasdaq. 

Source: Bloomberg

And it’s not just in the United States; the global semiconductor index has risen 90% this year, and the MSCI Korea index has risen 128%, considering that just two semiconductor companies—Samsung and SK Hynix—account for 54% of the index. We already know who’s to blame.

I mentioned at the beginning that the stock market was rising despite the warning signs the market is giving us. What are those signals? The usual ones—those that have emerged with the tension in Iran. With the war, some commodities, especially oil, have skyrocketed. The Strait of Hormuz (it’s not exactly closed, but they’re allowing only very selective traffic), through which more than 20% of oil exports pass, has been closed for over three months. This problem, combined with the lower investment seen in recent years due to environmental concerns and lower estimated demand from China, has driven oil prices up to levels near $120. Reaching these prices is concerning, but what I believe poses the greatest risk to the economy as a whole is if prices stabilize at relatively high levels.  

As a result of the prolonged closure of the Strait, global oil reserves have fallen substantially, as can be seen in this chart. With fewer reserves and lower exports, this creates tension between supply and demand, pushing prices upward.

Source: Bloomberg

The impact on inflation data is already becoming apparent. Here you can see how inflation has risen this year in both the United States and Europe.

Source: Bloomberg

As a result, central banks are no longer considering cutting rates but rather raising them. Interest rates across nearly all maturities are rising. Here are the figures for the United States. The same is happening in the rest of the world. The green line shows interest rates for different maturities of U.S. Treasury bonds. The brown line shows the same data at the beginning of the year. Increases are evident across nearly all maturities. Investors perceive a risk of higher inflation in the medium and long term.

Source: Bloomberg

Such an environment affects consumers. The University of Michigan Consumer Sentiment Index[1] shows a downward trend, as can be seen in the image.

Source: Bloomberg

So, how is it possible for the market to rise given these somewhat concerning signals? The sectors seeing the biggest gains are those benefiting from heavy investment in AI—namely, semiconductors, data centers, power grid infrastructure, and cybersecurity—as well as commodities, which were already on the rise due to rising prices. 

Major tech companies, especially the “Big Seven,” are taking on debt to invest in the new paradigm in a race to come out on top and claim the prize. The companies rising the most are not the big ones, as was previously the case, but the smaller ones. Take a look at the semiconductor sector of the Russell 2000 Index[2]. It’s up 97%.

Source: Bloomberg

And take a look at how some of its components have evolved:

• Maxlinear: +440%
• Vishay: +339%
• Navitas: +329%
• Atomera: +309%

When compared to Nvidia, the world’s largest semiconductor company, which is projected to grow by 13% in 2026, this figure pales in comparison. It’s normal for these companies to see growth, but there may be a certain amount of euphoria involved, given that they are smaller companies with higher balance sheet risk. Please, I don’t mean to say that these are companies that are going to go bankrupt, but I do believe that these latest gains should be taken with a grain of salt. 

“You will be like God, knowing good and evil”, Genesis 3:5.

On May 25, Pope Leo XIV’s first encyclical, Magnifica Humanitas, was published. It was signed on May 15, coinciding exactly with the 135th anniversary of Pope Leo XIII’s encyclical Rerum Novarum[3] in 1891. In it, he addressed the labor issues arising from the Industrial Revolution and laid the foundations for the Social Teaching of the modern Church.

If Rerum novarum helped us grasp the impact of the Industrial Revolution, Magnifica Humanitas offers insights into the human implications of today’s technological revolution.

I must say I really liked it because it helps analyze one of the most important trends for investors in the coming decades from a deeply human perspective in light of the Social Teaching of the Church.    

It begins brilliantly, at least for me: “The magnificent humanity that God has created stands today before a decisive choice: to erect a new Tower of Babel or to build the city where God and humanity dwell together.”[4] Later, when discussing the building of the City of God, it refers to Nehemiah’s reconstruction of the walls of Jerusalem[5]

Babel symbolizes the pursuit of power for power’s sake, the impatience to achieve immediate results, and the illusion that technical progress is enough to save humanity. Nehemiah, on the other hand, shows us a different logic: that of a job well done, patience, responsibility, dedication, and the building of something that transcends self-interest.

Artificial intelligence has multiplied our capabilities in extraordinary ways. But the crucial question remains the same as it was thousands of years ago: whether we will use our talents to erect monuments to our own greatness or to build a more humane civilization.

Artificial intelligence is not evil in and of itself; it is a good servant but a bad master. What are we building—Towers of Babel or the reconstruction of Nehemiah’s walls of Jerusalem? I am not the one to answer this question, for I admit it would be very difficult for me, but I find great help in Mother Teresa’s response to the question, “Mother, if you could change one thing in the Church, what would you change?” She replied:

— I would change myself.

There is nothing more to say.

To read previous Market Reviews, click here.

[1] The University of Michigan Consumer Sentiment Index measures U.S. consumers’ confidence regarding their personal financial situation, the current economy, and their future economic expectations.

[2] The Russell 2000 is a stock market index that tracks the performance of approximately 2,000 U.S. small-cap companies.

[3] Rerum novarum (15 May 1891)

[4] Leo XIV, Magnifica Humanitas, n. 1.

[5] Leo XIV, Magnifica Humanitas, n. 8.

Trump’s Push to Expand IVF

This is not the first time the president has sought to expand access to assisted reproductive technologies. The first key moment came after the Alabama Supreme Court’s February 2024 ruling[1], which held that frozen embryos could be treated legally as children under the state’s wrongful-death statute. The decision opened the door to potential legal liability for fertility clinics over the destruction of embryos and led some centers to temporarily suspend their services. Trump reacted quickly,  publicly backing the development of state legislation that ultimately granted legal protection to in vitro fertilization in Alabama. During the presidential campaign, in August 2024, he pledged that, if he returned to the White House, the government or insurers would pay for IVF treatments, even describing his party as “the party for IVF”[2].

Once back in the White House, Trump turned that rhetoric into administrative action. On February 18, 2025, he signed Executive Order 14216, entitled “Expanding Access to In Vitro Fertilization”[3]. The order was framed around the goal of reducing economic barriers and facilitating access to in vitro fertilization. The next step came in October 2025[4], when the Administration announced a two-part initiative: first, discounts on certain fertility drugs through TrumpRx, a program promoted by the Trump Administration to facilitate access to these treatments through direct agreements with pharmaceutical companies such as EMD Serono; and second, the development of a pathway for employers to offer fertility benefits separate from regular health insurance.

The proposal announced in May 2026[5] appears to be the next regulatory step in that plan. Under this new rule, companies could offer dedicated supplemental coverage for IVF-related fertility treatment, much as many already offer dental or vision insurance. Employer-sponsored IVF coverage already exists in the United States, although it remains far from universal: approximately one quarter[6] of U.S. companies with 200 or more employees cover the procedure. Companies such as Amazon, Apple, and Meta offer substantial fertility-treatment coverage, in many cases through specialized platforms such as Progyny. In addition, insurers such as Aetna or Cigna may include infertility and in vitro fertilization coverage depending on the plan selected by each company and the applicable rules in each state.

Because several rounds of IVF are often needed to achieve a pregnancy, the financial cost can be very high: a single round costs between $12,000 and $30,000. On average, more than $61,000 is spent to achieve a live birth or to determine that further cycles are no longer medically or financially reasonable[7]. The average lifetime maximum among employers that offer this coverage is around $20,000 per employee[8].

The Ethical Implications of In Vitro Fertilization

In vitro fertilization usually begins with ovarian stimulation (hormonal medication) so that the ovaries produce multiple mature eggs in a single cycle. The eggs are then retrieved and fertilized in the laboratory with sperm to form embryos. The embryos are cultured for a few days and, depending on the circumstances, are transferred to the uterus or frozen (cryopreserved) for later use. Several embryos can be generated from a single retrieval and transferred in batches at different times. If a transfer does not result in pregnancy, or if the couple wishes to have another child later on, subsequent transfers can be carried out using another batch of embryos, thereby avoiding the need to repeat the entire stimulation and retrieval process each time.

It is difficult to know how many embryos are created on average in an IVF cycle, because most public statistics do not count embryos created; instead, they report outcomes as live births per egg-retrieval cycle and usually use cumulative rates that include transfers carried out within the year following that retrieval. In the United States, SART’s national summary reports 431,746[9] total cycles in 2024. Using the conservative assumption adopted by The Heritage Foundation (10 embryos created per cycle)[10], this would imply approximately 4.32 million embryos created in 2024 in the United States. Comparing this figure with the national total of 100,158[11] babies born through IVF in 2024 suggests that approximately 2.32% of the estimated embryos would result in a live birth, while the remaining embryos would not. However, these statistics do not allow us to determine how many are lost in the process and how many remain in storage. Of those embryos that remain in storage, some will be transferred in the future; some will be discarded; others will be donated for research; and many will come to be considered “abandoned” or “unclaimed” in practice[12] (because of a prolonged absence of instructions or contact from the parents, or because of noncompliance with the terms of the agreement), leaving their custody and eventual disposition in the hands of the clinic in accordance with its policies and the applicable legal framework. The scale of the frozen-embryo phenomenon is sobering: in the United States, various estimates place the number of cryopreserved embryos at more than 1.5 million[13].

Another major ethical concern is embryo selection. IVF is often accompanied by preimplantation genetic testing —“preimplantation genetic diagnosis”— which allows embryos to be analyzed before transfer. In some cases, this is presented as a way of avoiding serious diseases, but the underlying logic can easily expand to include criteria of quality, preference, or discardability. More than 75% of fertility clinics offer preimplantation testing to detect genetic problems, and 73% offer testing for sex selection or traits such as hair, eye, or skin color[14]. This point connects directly with the risk of eugenics. If embryos can be selected on the basis of the absence of disease, sex, or physical characteristics, the practice fosters a mindset in which some lives are deemed preferable to others. The very structure of the process facilitates a relationship of control over nascent human life. The child is no longer seen primarily as a gift, but as the result of a technical decision, a biological selection, and an economic investment.

There are also medical risks associated with IVF. Although the scientific literature continues to debate how far these risks can be attributed to the assisted reproductive technology itself —and not to associated factors such as the parents’ underlying infertility, advanced maternal age, or prematurity— numerous studies have linked assisted reproduction to a higher incidence of certain health problems in children conceived through these techniques, including certain congenital heart defects[15], some childhood cancers[16], and neurodevelopmental disorders such as autism[17].

Catholic Doctrine on In Vitro Fertilization

The Church acknowledges the suffering of married couples facing infertility and recognizes the goodness of their desire to build a family[18]. But it distinguishes between the legitimate desire for a child and an alleged right to obtain one by any means. A child is not something owed to the parents, but a person to be welcomed as a gift[19].

From the beginning, and consistently to the present day, the Church has firmly maintained that every human life must be respected and protected from the moment of conception[20]. The Magisterium does not claim authority over the experimental sciences, but it does have the responsibility to offer moral principles for evaluating the ethical implications of techniques applied to human life[21]. At the moment of fertilization, scientific evidence indicates that the existence of a new human being begins, with its own biological identity and a continuous developmental trajectory. Consequently, Catholic doctrine teaches that the State and society have a duty to defend the fundamental right to life of every innocent human being, rooted in his or her nature and in creation in the image of God[22]. The value of human life does not depend on its stage of development, its state of health, or the circumstances of its conception: from beginning of its existance, the embryo must be recognized and treated as a person, never as a means, an object of selection, or a disposable object[23]. Consequently, the deliberate destruction of human embryos inherent in in vitro fertilization constitutes a grave violation of the right to life of an innocent human being. Likewise, the possibility of selecting embryos according to genetic criteria or of producing more embryos than the number of children desired introduces a logic of domination and instrumentalization over human life in gestation[24].

The Church, for its part, does not disapprove of reproductive medicine as such. On the contrary, it accepts interventions that assist the conjugal act in achieving its natural end. What it rejects are techniques that replace the conjugal act and place the origin of human life under technological control[25]. There is an inseparable connection between the unitive and the procreative meanings of the conjugal act[26]. Just as contraception separates sexual union from procreation, in vitro fertilization does the opositee: it separates procreation from conjugal union[27]. In this sense, in vitro fertilization introduces a logic that shifts the origin of human life from the realm of spousal love to that of technical production in a laboratory.

In response to Trump’s February[28] and October[29] 2025 measures to expand access to IVF, the United States Conference of Catholic Bishops acknowledged the suffering of couples experiencing infertility and the goodness of their desire to have children, but warned that the answer cannot be a technique that destroys countless human lives and treats embryos as disposable material. The U.S. bishops further insisted that every human life, born or unborn, is sacred, and that children have the right to be conceived through the natural and exclusive act of marital love, not through a commercial technological process.

Ultimately, the desire to have a child is profoundly human, and the Church understands the real suffering of those who experience infertility. But precisely because the child possesses his or her own inviolable dignity, not every means of attaining that end is morally acceptable. Human life must be respected from the moment of conception, regardless of the circumstances in which it came into being, its stage of development, or its viability. The response to infertility cannot be built on the instrumentalization of human life.

For this reason, presenting the measures promoted by Trump as “pro-family” or “pro-life” policies is deeply contradictory. Although they seek to respond to a real problem, they ultimately reinforce an industry based on practices incompatible with the respect owed to every human person from the very beginning of life. There are also more humane and ethical alternatives aimed at addressing the root of the problem: greater research into the causes of infertility, restorative reproductive medicine, including treatments based on Restorative Reproductive Medicine (RRM)[30], better diagnoses, support for motherhood and fatherhood, and easier pathways to adoption. Instead of accepting embryo production and selection as inevitable, a true family policy should promote solutions that protect both the legitimate desire of parents and the inherent dignity of every human life.

From a faithful investing perspective, these policies also have important implications for investors. The Trump Administration’s push to expand assisted reproduction not only supports the growth of insurers, pharmaceutical companies, fertility clinics, and biotechnology companies directly linked to this sector, but also potentially affects companies across the economy. More and more companies are adding in vitro fertilization coverage to their employee benefits packages, raising significant ethical concerns regarding the protection of human life. For this reason, at Altum Faithful Investing, we help investors evaluate not only the products and services a company offers to its customers, but also its corporate policies and employee benefits.

[1] LePage v. Center for Reproductive Medicine, P.C., Supreme Court of Alabama, (Ala. 2024), decision of February 16, 2024.

[2] ABC News, “Trump calls himself ‘father of IVF,’ doubles down on ‘enemy within’ remarks in town hall,” October 16, 2024.

[3] The White House, “Expanding Access to In Vitro Fertilization,” Presidential Actions, February 18, 2025.

[4] The White House, “Fact Sheet: President Donald J. Trump Announces Actions to Lower Costs and Expand Access to In Vitro Fertilization (IVF) and High-Quality Fertility Care,” October 16, 2025.

[5] U.S. Department of Labor, “Proposed Rule on Excepted Fertility Benefits,” May 10, 2026,

[6] KFF, “Annual Family Premiums for Employer Coverage Rise 7% to Average $25,572 in 2024, Benchmark Survey Finds,” KFF, October 9, 2024.

[7] Emma Waters, “Why the IVF Industry Must Be Regulated,” The Heritage Foundation, March 19, 2024.

[8] Lindsay Bower, “Delivering Efficient and Affordable IVF Coverage to Employees,” Mercer, March 6, 2025.

[9] Society for Assisted Reproductive Technology (SART), “Preliminary National Summary Report for 2024 (All SART Member Clinics),” SART CORS Online.

[10] Emma Waters, “Why the IVF Industry Must Be Regulated,” The Heritage Foundation, March 19, 2024.

[11] Society for Assisted Reproductive Technology (SART), “Preliminary National Summary Report for 2024 (All SART Member Clinics),” SART CORS Online.

[12] Kathryn J. Go, Phillip A. Romanski, Pietro Bortoletto, Jay C. Patel, Serene S. Srouji, and Elizabeth S. Ginsburg, “Meeting the challenge of unclaimed cryopreserved embryos,” Fertility and Sterility 119, no. 1 (January 2023).

[13] Johns Hopkins Bloomberg School of Public Health, “The Alabama Supreme Court’s Ruling on Frozen Embryos,” February 22, 2024.

[14] Emma Waters, “Why the IVF Industry Must Be Regulated,” The Heritage Foundation, March 19, 2024.

[15] European Society of Cardiology (ESC), “Babies born after fertility treatment have higher risk of heart defects,” September 27, 2024.

[16] Gao Song, Cai-qiong Zhang, Zhong-ping Bai, Rong Li, and Meng-qun Cheng, “Assisted Reproductive Technology and Risk of Childhood Cancer Among the Offspring of Parents With Infertility: Systematic Review and Meta-Analysis,” JMIR Cancer, vol. 11, 2025.

[17] Mohammad A. Sakran et al., “Relationship Between Assisted Reproductive Technology and Autism Spectrum Disorders: A Systematic Review and Meta-Analysis,” Psychiatry International, vol. 6, no. 4, 2025, art. 156, DOI.

[18] Congregation for the Doctrine of the Faith, Dignitas Personae, no. 16.

[19] Catechism of the Catholic Church, no. 2378.

[20] Catechism of the Catholic Church, no. 2270.

[21] Congregation for the Doctrine of the Faith, Donum Vitae, no. 1.

[22] Dicastery for the Doctrine of the Faith, Dignitas Infinita, nos. 1 and 22, April 2, 2024.

[23] Congregation for the Doctrine of the Faith, Donum Vitae, I, no. 1. Dicastery for the Doctrine of the Faith, Dignitas Infinita, no. 22.

[24] Congregation for the Doctrine of the Faith, Dignitas Personae, no. 15. Congregation for the Doctrine of the Faith, Donum Vitae, II, Introduction.

[25] Congregation for the Doctrine of the Faith, Donum Vitae, II, B, no. 5.

[26] St. Paul VI, Humanae Vitae, nos. 12 and 14.

[27] Congregation for the Doctrine of the Faith, Donum Vitae, II, B, no. 5.

[28] United States Conference of Catholic Bishops (USCCB), “IVF Destroys Human Life, Bishops Urge Ethical Alternatives,” February 20, 2025.

[29] United States Conference of Catholic Bishops (USCCB), “Bishop Chairmen Respond to Administration’s Announcement on Expansion of Access to IVF and Fertility,” October 17, 2025.

[30] Restorative Reproductive Medicine: An Ethical Approach to Fertility — The National Catholic Bioethics Center.

• S&P 500: +10,49% 
• Nasdaq: +15,66% 
• Stoxx Europe: 5,56% 
• MSCI All Country World Index (EUR): +8,53% (The dollar fell 1.53%, the index in USD rose 9.52%).
• Global Fixed Income Index (EUR): -0,55% (The dollar fell 1.53%, the index in USD rose 0.30%).

Despite ongoing tensions in Iran and issues in the Strait of Hormuz, with oil prices exceeding $110 per barrel, optimism returned to the market thanks to renewed interest in artificial intelligence companies, strong first-quarter earnings (84% of companies beat expectations, well above average), and perhaps hopes for a lasting ceasefire.

Optimism has returned to the artificial intelligence sector with the announcement of new investments in the construction of new data centers. This image shows the investment forecast from these companies.

Source: Seeking Alpha

These announcements have triggered sharp rallies in one of the most important suppliers to data centers: semiconductors. This sector has risen by nearly 50%,[1] which has boosted the indices. Optimism is returning, but doubts remain: will they deliver on these gains? I don’t have the data to know whether they will or not, but if they fall short, the declines will be steep given the high price-to-earnings multiples.

Geopolitics

The situation in Iran is currently marked by high tension, though it is far from a full-scale open war. Following a recent phase of attacks between Iran, the United States, and Israel, the conflict has entered a sort of fragile truce, marked by diplomatic negotiations.

Despite this attempt at de-escalation, the risk of new clashes remains high. The most sensitive point continues to be the Strait of Hormuz, key to global oil trade, whose stability directly influences global markets.

In this context, the United States seeks to avoid a prolonged war and contain Iran’s nuclear program, while Israel maintains a firmer stance. For its part, Iran, though weakened, retains the capacity to respond.

In short, we are not facing an all-out war, but rather a very unstable balance, where any incident could reignite the escalation.

Europe

One of the first economic consequences of the war has been a surge in energy prices. Europe has been one of the hardest-hit regions, due to its status as a net energy importer. Although European markets showed some recovery, it was more moderate than in other regions. Against this backdrop, the European economy barely managed to grow in the first quarter, as the conflict in the Middle East has derailed a long-awaited recovery.

The latest European data offers little cause for optimism, such as consumer confidence falling by 20.6%, —the worst reading since 2022 according to the European Commission— and an April PMI[2] (Purchasing Manager Index) of 48.6, below the 50-point threshold that separates expansion from contraction. The contraction stems from both the services and manufacturing sectors, with data pointing to inflationary pressure.

This is Europe’s perennial problem: excessive regulation and an ideologically driven industrial policy that has weakened its defenses against external shocks. Instead of strengthening its domestic energy capacity, it has remained exposed to instability in external supply, such as from the Middle East or Russia. 

The weaker performance of European companies is consistent with this perspective. Companies operating in an environment of heavy regulation, high tax burdens, and energy uncertainty face greater difficulties competing with their U.S. counterparts.

Source: Bloomberg   

This chart shows the degree of energy dependence in different regions. While Europe meets nearly 60% of its needs through imports, the United States is in the opposite situation, with exports exceeding imports.

This difference is clearly reflected in the prices paid by both economies, as shown in the following charts. The gap in energy costs faced by European businesses and households is particularly significant.

Source: Bloomberg  

 Source: Bloomberg  

And it’s not just a matter of price differences, but also of greater volatility. In such an environment, how can a company plan its investments, costs, or margins with so little visibility? Competing under these conditions makes many European companies true heroes.

Therefore, in the face of any external shock, Europe reveals its fragility, and this has been demonstrated once again. There are very good companies in Europe—as good as or better than their American counterparts—but they are at the mercy of political whims.

Inflation

Yeah, I know, I’m obsessed with this topic, but how could I not be? They call it the “invisible tax” because it takes your money without you even noticing—except for a friend’s mom, who used to tell us, “I don’t care if prices go up; I’m always going to put 20 euros’ worth of gas in my car.”  

To give you an idea, central banks aim for 2% inflation—great—but with that rate of inflation, purchasing power drops by 50% over 36 years. If you want to leave your wealth to your children, it’s clear what you need to do if you want them to be able to buy the same things—and I’m not talking about luxuries. 

Is an annual inflation rate of 2% good or bad? If monetary policy is more or less stable, it can be positive, but there are economies that have maintained low inflation rates—such as Switzerland, with an average inflation rate of 0.6% this century—where the population has maintained high purchasing power compared to other countries. Someone might rightly point out that Japan has had an average inflation rate of 0.5% over the same period and hasn’t fared well. The difference lies, I believe, between sound monetary policies and excessively interventionist ones, but I didn’t want to focus on this discussion, which could be interesting for a later commentary.

On the other hand, do we really believe that current inflation is 2%?

Source: INE, Chatgpt

How is it possible that CPI-measured inflation has averaged 60% since 2000, while many essential goods and services—such as education, healthcare, food, energy, and housing—have risen far beyond that? The CPI is an average calculated from a basket of goods and services with specific weightings. Is it designed to produce a “pretty” result? Not necessarily, but it certainly falls short of the reality of the bills a family faces in their daily lives.

Does this mean the data is incorrect? No. But it does mean the indicator has significant limitations. For example, electronics, which have seen price drops or quality improvements, help keep the index in check, even though their share of household spending is small and they are not essential. In contrast, categories such as food, housing, education, and healthcare—which are far more relevant to families’ well-being—have seen much higher increases.

The result is clear: even though the CPI reflects a moderate rise, the inflation that many families actually experience is higher, especially when their wages have not grown at the same pace in real terms.

Electronics prices are falling—in other words, there is deflation. This concept has become almost taboo, as if it were inherently negative. However, its impact depends entirely on the context.

In an uncertain environment, where consumption and investment are contracting, falling prices are often a sign of weakness: companies lower prices to move their inventory, even if it means accepting lower margins or losses. This type of deflation can create a vicious cycle of reduced economic activity. Take Japan, for example.

But there is another, much healthier form of deflation: that which stems from productivity gains. When a company is able to produce more efficiently, it can lower prices without eroding its margins. In that case, falling prices are not a problem but a blessing; purchasing power increases, and money “goes further.” Take Switzerland, for example.

The risk we face today is not just a spike in inflation, but the possibility that it will coexist with low economic growth—that is, a scenario of stagflation, a word no economist wants to hear. Such situations are typically triggered by a supply shock in a context of economic weakness, often preceded by prolonged periods of excessive monetary stimulus.

Let’s hope the conflict ends soon, as we all wish. However, it’s worth noting that the problem lies not only in the war, but in the imbalances that had built up beforehand—imbalances that the conflict has merely brought to light. An environment of excessive policies and regulations, coupled with ongoing monetary stimulus, has gradually eroded the economic strength of these countries.

Given this situation, there is no choice but to keep investing so that inflation doesn’t erode your purchasing power. There will surely be volatility and there will be downturns that, at least for me, I won’t be able to predict, but I do know that if you stay invested and let the companies do their job, the rewards will come.

Following up on that last paragraph, I’d like to wrap up this post by giving you a choice between the following two options (it’s important to answer with the first thing that comes to mind):

• Receive €1 million today
• Receive €0.05 today, which doubles every day for 30 days, that is:
  • Day 1: €0.05
  • Day 2: €0.10
  • Day 3: €0.20

Before answering, here’s a hint: our brains overvalue the immediate and undervalue the long term, especially when growth isn’t linear.

This is interesting for understanding how compound interest (compound returns) works in investing. Do the math and tell me if it isn’t worth being patient with investments—provided, of course, that you choose your companies wisely.

As Warren Buffett said: “The first rule of compounding: never interrupt it.”  

For previous market reviews, click here.  

[1] Measured by the State Street SPDR S&P Semiconductor ETF

[2] This is a survey conducted among corporate purchasing managers

• S&P 500: -5,09% 
• Nasdaq: -4,89% 
• Stoxx Europe: -8% 
• MSCI All Country World Index (EUR): -5,27% – (the dollar rose by 1.15%, so the index in USD fell by 6.11%).
• Índice global de renta fija (EUR): -0,68% – (the dollar rose by 1.15%, so the index in USD fell by 1.97%).

There is some concern among investors about a potential rebound in inflation and how it may affect upcoming interest rate decisions. Since the beginning of the conflict, the most significant movements in commodities have been:

• Oil: +62%
• Gasoline: +47%
• Diesel: +44%
• Urea: +48%
• Fertilizers: +29%
• Coal: +22%     

This is not a minor move. Energy is a cross-cutting input for the entire economy, so these increases eventually filter through to overall prices.

Following multiple bombings from both sides, the current situation is one of tense calm. Trump has extended the deadline until Tuesday, April 7, for Tehran to reopen the Strait of Hormuz, while the United States, Iran, and regional mediators discuss the terms of a possible 45-day ceasefire that could lead to the end of hostilities.

Although this situation may invite optimism, this weekend President Trump has toughened his tone, threatening to destroy key Iranian infrastructure if no progress is made. For its part, Iran has rejected the ultimatum to reopen the Strait of Hormuz, stating that it will only fully resume operations once war damages are compensated. In short, calm, but very fragile and highly dependent on political decisions that are difficult to anticipate.

Consequences of higher inflation

As we mentioned in the February report, there were already signs that inflation was not fully under control and could rise again, partly due to high global deficits. The increase in gold prices can also be interpreted in this context, either as a reflection of excessive public spending or as a gradual loss of confidence in currencies. The fact is that, at the end of the month, we saw a rise in inflation expectations in the United States, something the market had not priced in for some time.

If we add to this the increase in commodity prices caused by the war, it is reasonable to think that upcoming inflation data releases may surprise to the upside. And, as is often the case, the market does not wait for confirmation—it starts adjusting in advance.

Inflation has negative consequences for both households and companies, as it reduces purchasing power. In addition, it may lead to interest rate hikes, with clear implications:

1. Household: the cost of loans and variable-rate mortgages increases.
2. Companies: financing becomes more expensive and margins are compressed.
3. Government: deficit financing becomes more expensive, although inflation benefits highly indebted governments by reducing the real burden of debt.[1]
4. Investment value: valuations decline.

This last point is especially relevant and often poorly understood.

Valuing a company through discounted cash flow (DCF) consists, in simple terms, of bringing future cash flows to present value plus a terminal value.

This is the formula:

CFi: Cash flow in year “i”. This is what the company generates through its operations.

Vn: Terminal value in year “n”. Based on the company’s long-term growth expectations, this value is calculated. “n” is subjective—it could be year five, for example[2].

K: Discount rate applied to these cash flows.

This discount rate is key in the current environment. It is subjective and depends on factors such as opportunity cost[3], expected growth, or the cost of capital, among others, depending on the perspective of the person performing the valuation.

For example, if the best available investment alternative has an expected return of 10%, or if I require a 10% return for a given investment due to its risk or duration, then k = 10%.

That said, can k change? Of course. It can increase if I perceive more risk in the investment, which reduces valuation (per the formula), as I demand higher returns. It can also change due to interest rate movements. Suppose I require a 10% return and assume a 5% spread over risk-free rates (which are at 5%). If risk-free rates rise to 7%, then k must increase accordingly. Since k is in the denominator, the company’s valuation decreases.

The war has had an immediate impact on markets, with declines in equities, as expected. However, what may be more relevant is the indirect effect via inflation and interest rates, which is more persistent and harder to reverse.

Returning to the DCF formula—and I promise this is the last headache—growth companies, particularly technology firms linked to artificial intelligence, are more affected for two reasons:

1. Their cash flows are further in the future, so a higher k has a greater negative impact on valuation.
2. They trade at demanding multiples, meaning expectations are already very high and therefore more vulnerable to disappointment.

We can see this in the chart: the light blue line (Magnificent 7) falls by 12%, the dark blue line (traditional S&P 500) falls by 4.6%, and the beige line (S&P Equal Weight) rises by 0.19%.

Source: Facset Research Systems Inc.          

This highlights concentration risk. When markets rise, it helps. But when conditions deteriorate, it becomes a vulnerability—especially in uncertain environments.

That said, although it may still be early, corporate earnings have not been significantly affected. The declines are driven more by uncertainty, as shown in the decomposition of the S&P’s performance: dividends contributed +0.28%, earnings +5.18%, and the multiple (P/E) -10.56%, which ultimately dragged the index down.

Source: Facset Research Systems Inc.                

The P/E ratio is equal to price divided by earnings. If price rises while earnings remain constant, the multiple expands, reflecting investor optimism—and vice versa. We do not know what will happen with the war, inflation, or interest rates, but many investors prefer not to wait and sell amid rising uncertainty. Higher uncertainty, lower multiples.

Private credit funds

When asked about the impact of war on financial markets, the immediate reaction is concern, risk, and uncertainty, which naturally leads many investors to sell. Beyond the human tragedy, from a financial perspective, what is more concerning is rising inflation, potential interest rate hikes, and the consequences for leveraged structures that are not immediately visible.

Some worrying news has emerged regarding private credit funds. These funds lend directly to companies and have grown significantly since 2008, partly due to tighter banking regulation. It is a less transparent market, but increasingly relevant.

Many loans are floating rate, meaning companies that borrowed when rates were low are now paying interest rates of 9–10%, leading to refinancing difficulties and rising defaults—although not always officially recognized, as they are often masked through extensions, restructurings, or PIK payments[4].        

In addition, these funds have financed small and mid-sized software companies, a sector now threatened by artificial intelligence, which may deliver similar solutions faster and at lower cost.

This creates a combination of risks: higher financing costs and declining revenues.

It is no coincidence that many investors are requesting redemptions. Some semi-liquid funds are limiting or even suspending withdrawals, while banks tighten financing conditions.

This reveals a key fragility: many funds offer liquidity while investing in illiquid assets. These mismatches only become visible in stressed environments.

This situation somewhat resembles 2008. After years of low interest rates, complex structures with questionable assets were created. When rates rose, the fragility of the system became evident.

Today’s situation is different—less leverage, more capital, simpler structures—but the underlying dynamics are similar. Key risks include opaque valuations, concentration in software/technology, and exposure to semi-liquid vehicles.

This once again reminds us of a very human tendency: repeating mistakes. In times of prosperity, greed blinds us and pushes us to take on more risk. We believe we will know when to exit, that we will stand up just before the music stops. But reality is often different.

The music always stops. The question is whether we are already seated… or still standing when it does.

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[1] If I am lent 100 to repay in one year and inflation over that year has been 10%, I repay the same 100, but it is worth 10% less (a very simple example for training purposes).

[2] The terminal value is calculated as follows: Vn = (CFn / (k − g)), where k is the discount rate and g is the expected perpetual growth rate, which is usually similar to global GDP growth. No company grows above GDP indefinitely.

[3] Opportunity cost can be defined as the expected return of the best available investment alternative.

[4] Payment In Kind (PIK): the company stops paying interest in cash and instead capitalizes it by adding it to the debt. When a company is under financial stress, this provides short-term relief, but it increases overall indebtedness.

Every financial decision represents an allocation of capital that supports certain economic activities, business models, and visions of society.

For this reason, at Altum Faithful Investing we have developed the Altum 500 US Catholic Ethos Index Equal Weight, an index designed to provide investors with a clear benchmark that combines financial rigor with moral coherence.

The index was created with a specific goal in mind: to offer a genuine alternative for those who wish to practice faith-based investing, enabling investors to participate in financial markets without compromising their principles.

In an increasingly complex financial world—where passive investing accounts for a large share of global capital flows—having benchmarks that reflect solid ethical values has become more important than ever.

Why Catholic investors need new benchmarks

For decades, financial indices have served as reference points for building investment portfolios, measuring market performance, and designing financial products.

However, these traditional indices have been built solely on financial criteria, without considering the ethical or moral implications of the companies they include.

Many widely used benchmarks contain companies that are directly or indirectly involved in activities that conflict with the Social Teaching of the Church, such as abortion, human embryo research, or corporate practices that undermine the family and human dignity.

The Altum 500 US Catholic Ethos Index was created precisely to address this need—offering a new guide for investors seeking a benchmark that does not conflict with their faith.

What is the Altum 500 US Catholic Ethos Index?

The Altum 500 US Catholic Ethos Index Equal Weight is an equity index designed to provide a clear benchmark for responsible investing from a Catholic perspective.

The process begins by analyzing the 2,500 largest publicly traded companies in the United States by market capitalization.

Altum then applies its Altum Investment Guidelines, rooted in the Social Teaching of the Church, to exclude companies whose activities or corporate practices conflict with Catholic principles.

From the remaining universe, 500 companies that meet these ethical criteria are selected.

Altum Investment Guidelines

The Altum Investment Guidelines are based on four core pillars:

• Promotion of human life
• Promotion of human dignity
• Protection of the family
• Care for and protection of creation

This framework goes beyond analyzing a company’s core business activity. It also evaluates corporate practices, ensuring a deeper and more comprehensive ethical assessment.

Why the index uses an Equal Weight structure

Traditional indices typically weight companies according to market capitalization, giving greater influence to the largest corporations.

The Altum 500 instead uses an equal weight structure, where every company in the index receives the same allocation.

This approach reduces concentration in mega-corporations, improves diversification, and distributes capital more evenly across the economy.

Investing is a moral act

Investment decisions influence the real economy and shape the type of society that develops.

For this reason, the allocation of capital cannot be considered morally neutral.

Catholic investing seeks to align financial returns with the common good.

The Altum 500 US Catholic Ethos Index represents an important step toward providing an independent, transparent, and faith-aligned benchmark for investors who want to integrate Catholic values into their financial decisions.

Fixed income also saw some interesting behavior. The best-performing segment was government bonds, followed by higher-quality corporate bonds, while the riskiest segment, high yield, was the worst performer. 

The main indices performed as follows:   

• S&P 500: -0.87%
• Nasdaq: -2.32%
• Stoxx Europe: +3.74%
• MSCI All Country World Index (EUR): +1.73%
  (The dollar rose 0.33%, so the index in USD rose 1.20%).
• Global fixed income index (EUR): +1.88%
  (The dollar rose 0.33%, so the index in USD advanced 1.41%).

Since the beginning of the year, the sectors that have risen the most are Energy (24.41%) and Materials (17.63%), while the sectors that have lagged behind the most are Financials (-6.34%) and Information Technology (-6.34%).

This raises an interesting question: are we facing a change in the sectoral cycle in which optimism surrounding the technology sector, and especially artificial intelligence, is beginning to moderate?

I don’t know for sure, but if history teaches us anything, it is that, as psychoanalyst Theodor Reik said, “history does not repeat itself, but it often rhymes.” I always insist that this comment is not a manifesto against artificial intelligence. What we are trying to analyze is whether these valuations reflect a reasonably achievable future or whether, on the contrary, they may be incorporating excessive optimism. In times of greater uncertainty, the market demands a higher risk premium, and that usually translates into greater volatility or declines.

The risk of concentration in the S&P 500

One of the most striking aspects of the current market is the historic level of concentration in the S&P 500 index, as shown in this image of the evolution of the weight of the top 10 companies since 1990. Today, the 10 largest companies represent approximately 40% of the index, while the other 490 companies represent the remaining 60%.

Source: RBC Wealth Management, Factset.

As I said before, let’s see what happened in similar situations when there was a similar risk of concentration.

Remembering the internet bubble at the beginning of the century.

Before the tech bubble burst in the early 2000s, the ten largest companies in the S&P 500 accounted for around 23% of the index, far from the current 38%. These 10 companies were:

• Microsoft
• General Electric
• Cisco Systems
• Wal-Mart Stores
• Exxon Mobil
• Intel Corp
• Lucent Technologies
• IBM
• Citigroup
• America Online

The internet had just been born, and a very powerful narrative was generated around this new technological paradigm, which sparked strong optimism. Six of these companies were included in the technology sector. This graph shows the Nasdaq technology index (light blue line) compared to the S&P (dark blue line) up to March 2000. Looking at this graph, our first reaction would be, “I should have invested in technology; my brother-in-law told me so.”

Source: Bloomberg

It certainly seems that at that time, you had to be invested in these companies. Those who did not invest were somehow forced to invest so as not to miss out on the wave, what is now called FOMO (Fear Of Missing Out), and that is precisely where the problem begins.

Historically, there are two main ingredients for generating stock market euphoria:

• A powerful narrative (at that time, the internet)
• Abundant liquidity

I don’t know which of the two came first, but in the 1990s, both factors were present. The narrative existed, and with regard to liquidity, it came from a period of abundant cheap credit:

• Following the recession of 1990–91, the Fed aggressively lowered interest rates.
• In 1998, following the Asian crisis and the collapse of LTCM[1], injected liquidity again.
• Real interest rates (nominal rates minus inflation) remained relatively low in an environment of strong growth.

When these conditions combine, something similar usually happens: it starts with a promising narrative (new internet paradigm), then optimism sets in, and later that optimism can turn into overconfidence. Investors start to borrow money to buy more assets (the internet is the future and its growth is limitless), investment banks, sensing easy profits, create all kinds of products linked to this new paradigm and sell them en masse, and little by little valuations cease to matter because it is assumed that the new paradigm justifies everything.

Does this sound familiar?

And as often happens in these situations, all it takes is a small spark to blow everything up: reality. And reality, although sometimes late, always ends up appearing. It can come in the form of downward revisions to profits, financial difficulties due to excessive leverage, or even the occasional unexpected bankruptcy. When this happens, optimism quickly evaporates…the bubble eventually bursts.

Finally, the internet bubble burst and the market crashed. The chart above showed the previous rise; when we zoom in to include the following years, we see the other side of the story. After the crash, the Nasdaq technology index fell by nearly 82%, while the S&P 500 fell by around 45%.

Source: Bloomberg

If we look at what happened to the ten largest companies on the market at that time, the story is also interesting:

• Eight of them still exist today.
• Three of them have had a negative return over the last 24 years.
• Only one of them remains in the top 10: Microsoft.
• Only one has outperformed the S&P since 2000, Microsoft, and even then, it took almost two decades to fully recover lost ground, as it did not outperform the index until 2019.

This does not mean that history will repeat itself. But it does call for caution when market concentration reaches such high levels.

For this reason, we prefer to be cautious with indices such as the traditional S&P 500, where the weighting of a few companies is very high. As I always say and insist, this is not a criticism of artificial intelligence, as was the case with the internet. It is an innovation that is here to stay, but as Keynes said “It is better to be approximately right than precisely wrong.”[2]

For those who want exposure to the US market, an interesting alternative may be the S&P 500 Equal Weight, where all companies have the same weighting. This reduces the impact that sudden movements by larger companies can have. This is important because while everyone is happy when the market is rising, if there is nervousness caused by an event that affects these companies, the index suffers greatly.

We saw a recent example of this in early 2025, when the Trump administration’s announcement of tariffs caused a market correction. The chart reflects what happened during that period: The “Magnificent Seven” (represented by the light blue line), which account for about 33% of the S&P, fell approximately 25.8%, the traditional S&P 500 (represented by the dark blue line) fell 15.3%, and the S&P Equal Weight (represented by the beige line), where the magnificent seven represent 1.4%, fell 12.7%.

The difference in this case between investing in the traditional S&P or the S&P Equal Weight was close to 3% in just three months.

Source: Bloomberg

Now, the important question is how both approaches perform in the long term. In this graph, I compare both indices since the beginning of the 20th century, taking into account several crises.

Source: Bloomberg

If we analyze its performance since the beginning of the century, through several financial crises, the S&P Equal Weight has outperformed the traditional S&P. However, in shorter periods, especially when there is a very optimistic narrative surrounding a small group of companies, the traditional index tends to perform better.

Conflict in Iran

Unfortunately, I must end this commentary with the event that marked the beginning of March: the US and Israeli bombings of Iran and Iran’s subsequent retaliation.

It is not our goal to make political assessments or determine who is right. The only thing we can say with certainty is that all conflict is, above all, a human tragedy.

That said, we will attempt to analyze the effect that this type of event has on financial markets. Conflicts in the Middle East are nothing new for financial markets, but the current situation has a particularly sensitive element: the possible disruption of the global energy system.

The initial reaction of the markets has been the usual one in the face of a geopolitical shock. Global stock markets recorded widespread declines as volatility increased and investors sought refuge in defensive assets.

At the same time, there has been a classic increase in demand for safe-haven assets such as gold, high-quality sovereign bonds, the Japanese yen, and the Swiss franc. The main concern for the markets is not so much the military conflict itself as its implications for global energy supplies. The focus has been on the Strait of Hormuz, one of the most critical points in global energy trade. Approximately 20% of oil and liquefied natural gas transported by sea passes through this strait. Any disruption to traffic on this route can cause immediate tensions in energy prices.

Following the escalation of the conflict, oil and gas prices rose sharply. Brent crude oil stood at around $80 per barrel, while natural gas prices rose significantly in Europe.

This move has reignited fears of a new energy shock, especially in Europe, which is still in the process of adapting after the energy crisis triggered by the war in Ukraine.

Beyond the immediate impact on markets, the real risk lies in the macroeconomic consequences of rising energy prices. A sustained increase in oil and gas prices could result in:

• Greater inflationary pressures.
• Delays in interest rate cuts by central banks.
• A deterioration in global economic growth.

In other words, the conflict reintroduces the risk of a stagflationary scenario, in which growth weakens while inflation remains high.

Despite the initial noise, historical experience suggests that the impact of conflicts in the Middle East on financial markets is usually temporary. An analysis of several conflicts in the region since 1970 shows that, although stock markets tend to react with short-term declines, the effects on financial markets and global growth tend to moderate once the initial uncertainty subsides.

In fact, in many historical episodes, oil prices experienced initial increases that subsequently normalized if there was no prolonged disruption to energy supplies. The path we travel during the investment process is fraught with obstacles and uncertainties. But remaining calm and making decisions based on a detailed analysis of each asset in our portfolio, rather than on media noise, remains, in our opinion, the best ingredients for achieving good long-term results.

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[1] Long Term Capital Management (LTCM) was a hedge fund founded in 1994 by John Meriwether, with the participation of prominent figures such as Robert Merton and Myron Scholes (Nobel Prize winners in Economics). It collapsed in 1998 after huge losses on highly leveraged positions, leading to a bailout coordinated by the New York Federal Reserve.

[2] A Treatise on Probability: The Connection Between Philosophy and the History of Science : Keynes, John Maynard: Amazon.es: Libros

Catholic Social Teaching does not offer technical formulas, but it does provide solid and enduring principles to guide human action in the economic sphere. Faith is not an optional add-on to investing; it is its moral compass.

For this reason, investing in coherence with one’s faith requires two inseparable dimensions:
• Structuring the portfolio according to objective principles.
• Living investing as a vocation that requires virtues.

Below, we develop ten key concepts: the first five are structural foundations for building portfolios consistent with the faith; the next five are virtues that every Christian investor should cultivate.

The Structural Foundations of a Faith-Consistent Portfolio

• The Dignity of the Human Person

The dignity of the human person is the indispensable and non-negotiable principle of all Catholic investing. The human person is always an end in himself or herself, and never a means at the service of economic profit.

This principle requires companies to place the human person at the center and, through their activities and corporate practices, to safeguard the dignity of both their employees and their customers.

Faith-consistent investing therefore places human dignity at the center of business analysis, in a stable and objective manner.

• The Protection of Life

Human life, from conception to natural death, is inviolable. Therefore, faith-consistent investing excludes companies involved in abortion, embryonic research, euthanasia, or industries that directly attack human life.

Catholic investors cannot detach themselves from the ultimate use of their capital. Responsible Catholic investing requires genuine coherence, not ambiguous compromises.

• The Protection of the Family

The family, founded on marriage between one man and one woman, is the basic cell of society.
A faith-consistent investment portfolio should avoid companies that promote models contrary to Christian anthropology or that systematically erode the institution of the family.

• Care for Creation

Care for creation is not environmental ideology, but a moral responsibility.
Ethical investing from a Catholic perspective requires assessing the environmental impact of companies, without falling into the ideological simplifications typical of certain ESG approaches.

The guiding criterion is intergenerational responsibility. Creation is both a gift and a task.

• The Common Good

The common good is the principle that harmonizes all the others.
It is not enough for a company to be profitable. It must contribute positively to integral human development.

A Catholic investment portfolio should be structured with a long-term vision, recognizing that profit is legitimate—but never absolute.

The Virtues of the Christian Investor

Structure is necessary, but not sufficient. Without personal virtue, there is no true coherence.

• Prudence

Prudence is the virtue that enables one to discern the concrete good in each situation.
In Christian investing, it involves analyzing risks, understanding markets, and avoiding impulsive decisions. Good intentions are not enough; technical competence is required.

Prudence calls for proper formation and the support of investment firms that integrate ethics and professionalism.

• Justice

Justice leads us to give each person his or her due. The Catholic investor does not seek only to maximize returns, but to participate in building a more just economy. This includes the responsible exercise of shareholder voting and dialogue with companies.

Faith-consistent investing includes active engagement.

• Fortitude

Fortitude enables investors to uphold ethical criteria even when the market pressures them otherwise.
There will be highly profitable sectors that are not morally acceptable. Fortitude sustains coherence when it entails economic sacrifice.

Without fortitude, Catholic investing dissolves into opportunism.

• Temperance

Temperance moderates the disordered pursuit of profit. The market encourages immediacy and speculation. The Christian investor is called to a calm, long-term vision, avoiding greed and short-termism.

• Responsibility

To invest is to exercise co-responsibility for the world. Capital is not neutral. It shapes culture, companies, and social structures. For this reason, Catholic investing is a concrete form of apostolate in the economic sphere. It requires awareness, formation, and appropriate tools.

Faith, Structure, and Virtue

Catholic Social Teaching is not a list of prohibitions. It is a comprehensive vision of the human person and of the economy.

Authentic Catholic investing combines:

• Objective principles to structure faith-consistent portfolios.
• Personal virtues to live by investing as a vocation.

When faith and finance are integrated, the market ceases to be a neutral space and becomes a field of witness.

Faith-based investing is no longer a marginal concern. In recent years, a growing number of Catholic investors, religious institutions, foundations, and families have begun to ask whether it is possible to invest professionally without compromising the principles that guide their lives.

For decades, the relationship between faith and finance was often presented as an unavoidable tension. Today, however, there is a deeper awareness that money is not morally neutral and that every investment decision has real consequences for people, society, and culture. It is in this context that Faithful Investing has gained momentum, often referred to as Catholic investing or faith-based investing grounded in Catholic values.

What does it really mean to invest in line with one’s faith?

At first glance, speaking about evangelization in the financial sphere may seem abstract. Yet speaking about Faithful Investing is not about describing a specific financial technique, but about expressing a way of understanding investment itself. Faith-based investing begins with a simple yet demanding conviction: capital should serve the common good and must not support activities that undermine human dignity, family, life, or the care of creation.

From this perspective, investing for Catholics is rooted in the Social Doctrine of the Church and applies stable moral criteria that help discern which companies, sectors, or financial instruments are legitimate investment options and which are not. This is precisely why Faithful Investing differs both from purely speculative investing and from more generic approaches to socially responsible investing.

Investing in this way does not mean withdrawing from the market, but rather engaging with it responsibly, professionally, and with moral awareness.

Catholic investing and ESG: apparent similarities, profound differences

Catholic investing is often associated with ESG investing. While both approaches share a concern for social and environmental impact, their foundations are fundamentally different. ESG relies on changing and often ambiguous indicators, whereas Faith-based investing is grounded in objective moral principles.

It is not uncommon to find companies with strong ESG ratings that are nevertheless involved in activities incompatible with Christian values. For this reason, many Catholic investment advisors and Christian-based investment companies consider ESG alone insufficient to build a truly Catholic investment portfolio.

What types of investments are excluded by Catholic Investing?

Catholic investing requires rigorous ethical discernment. Certain activities are incompatible by their very nature with faith-based investing. Given the complexity of today’s financial markets, this discernment cannot be intuitive; it requires reliable information and professional stock screening tools capable of applying Catholic values consistently and transparently.

Catholic investment funds: what investors should know

In recent years, a growing number of Catholic investment funds have emerged in response to this increasing demand. However, not all of them apply the same ethical criteria or the same level of moral analysis. For this reason, before investing in Catholic mutual funds, Christian mutual funds, or Catholic responsible investment funds, it is essential to examine their methodology and assess to what extent they genuinely integrate Catholic values in investing. This is where professional investing tools become essential.

Certified funds and ethical assurance 

In this context, certified funds play a particularly important role. At Altum, these funds are analyzed and certified according to strict faith-based investing criteria, ensuring that their investment decisions are aligned with the Social Doctrine of the Church and with Catholic values in investing. This certification is not limited to an initial review but involves ongoing monitoring, providing transparency and confidence to Catholic investors. As a result, those who choose these certified funds can be assured that their assets are managed professionally, ethically, and in full coherence with their convictions, without sacrificing rigorous financial management.

The key role of professional investing tools 

Faithful Investing is not an amateur approach to financial markets. On the contrary, it requires a high level of technical rigor. Professional investing tools enable Catholic investment advisors and Christian investment companies to apply ethical criteria while maintaining solid financial analysis.

Thanks to these tools, it is now possible to manage complex portfolios, compare faith-aligned alternatives, run scenario analyses, and make informed decisions that respect both faith and financial objectives.

Can faith-based investing be profitable? 

This is perhaps one of the most frequently asked questions. Experience shows that ethical investing and financial performance are not opposing concepts. In fact, purposeful investing often encourages a long-term perspective, reduces certain risks, and supports more sustainable business models.

The key is not to reject profitability, but to understand it as a means rather than an absolute end.

Faithful Investing is not simply an investment technique, but a way of integrating faith, reason, and economic responsibility. For many Catholic investors, it represents a concrete way of living their vocation in the financial sphere, using capital as a tool of service.

Investing in line with one’s faith is ultimately a way of affirming that the economy, too, can be placed at the service of truth, human dignity, and the common good.

For more Faithful Investing, click here.

Altum Faithful Investing does not simply propose an ethical investment methodology, or a sophisticated version of socially responsible investing. Faithful Investing is, above all, a concrete way of living one’s faith within the economic sphere—a call to evangelize one of the most influential, and often most dehumanized, arenas of modern society: the world of finance.

In a culture where capital is frequently treated as morally neutral and profitability is presented as the ultimate benchmark, Faithful Investing reaffirms a central principle of Catholic Social Teaching: every economic decision is also a moral decision.

For Catholic investors, religious institutions, foundations, and families seeking coherence with their faith, a fundamental question arises: How can one invest professionally and rigorously without compromising Catholic convictions?

Evangelizing Finance: Faith, Coherence, and Responsibility

At first glance, speaking about evangelization in the financial sphere may seem abstract. Yet the Church has consistently taught that economics cannot be separated from morality, and that capital must serve the common good.

Faithful Investing is grounded in three core convictions:

1. Money is not an end in itself, but a means.
2. Moral neutrality in investing is a myth: every investment supports certain business activities and practices.
3. Faith must permeate every dimension of life, including the stewardship of wealth.

From this perspective, Catholic investing becomes a way of transforming economic structures from within.

The Altum Investment Guidelines: Bringing Faith into Concrete Decisions

One of the greatest risks in ethical investing is remaining at the level of vague declarations. For this reason, Altum has developed the Altum Investment Guidelines—a clear and structured framework for applying Faithful Investing in a professional and practical way.

Rooted in Catholic Social Teaching, these guidelines are built upon four pillars:

1. Promotion of Human Life

Faithful Investing seeks to build portfolios that support a culture of life. This includes avoiding investments in companies involved in abortion, contraception, indiscriminate weapons, or euthanasia.

It also excludes companies directly or indirectly engaged in embryonic stem cell research, research using stem cells derived from fetal tissue or embryos, or human cloning.

To ensure consistency and clarity, the Altum Faithful Investing team develops specific investment policies addressing each of these areas. These policies help investors translate the Catholic Magisterium into practical financial decisions.

A pharmaceutical company may demonstrate strong financial performance, yet still be excluded if a meaningful part of its business is connected to abortion or if it develops products through embryonic stem cell research. Faithful Investing goes beyond financial ratios—it applies a rigorous ethical filter.

2. Promotion of Human Dignity

Investing in alignment with faith means building portfolios that respect the dignity of workers, limit the spread of pornography, promote freedom from addiction, and safeguard religious liberty.

At Altum, we seek to invest in companies and assets that demonstrate responsible management practices, uphold human dignity, and operate with integrity in their relationships with employees, competitors, customers, and suppliers.

We avoid companies significantly involved in the production, distribution, or sale of pornographic material. We positively value businesses that help individuals overcome addictive behaviors, particularly those linked to cannabis or gambling.

We also exclude investments in governments or corporations that promote or engage in religious persecution or violate the fundamental right to religious freedom.

Companies with opaque supply chains or involvement in labor exploitation scandals are incompatible with a Catholic portfolio—even if they meet conventional ESG standards.

3. Protection of the Family and the Social Order

The family is the foundational cell of society. Accordingly, the Altum Investment Guidelines favor companies whose activities recognize and promote the social value and virtues of family life.

We avoid investing in companies or assets that actively oppose the Catholic understanding of marriage and family.

This approach extends far beyond traditional socially responsible investing, which rarely incorporates these considerations.

4. Care for Creation and the Common Good

Faith-consistent investing also requires an integral ecology—one that respects creation without falling into greenwashing, and that seeks to preserve the natural world for the integral development of future generations.

Companies involved in serious environmental controversies or abuse of natural resources are excluded from our portfolios. At the same time, we seek to promote positive environmental initiatives undertaken by governments and corporations that uphold the highest standards in their environmental conduct.

Faithful Investing vs. ESG: An Essential Difference

Though often conflated, Faithful Investing and ESG are not equivalent.

ESG frameworks are built upon criteria that can vary over time and often reflect shifting cultural or political trends. Faithful Investing, by contrast, rests on objective and enduring moral principles.

For Catholic investors, this distinction is critical. Faith is not a passing trend, and ethical standards cannot fluctuate with changing cultural, social, or regulatory contexts. Faithful Investing is anchored in the permanent moral principles of Catholic Social Teaching. Investing with integrity requires a stable and consistent framework grounded in values that do not change.

Professional Investment Tools at the Service of Faith

Evangelizing finance does not mean abandoning technical rigor. On the contrary, Catholic investing demands professional excellence.

Altum’s mission is precisely this: to place professional investment tools at the service of faith. Solutions such as Altum Explorer enable investors to integrate ethical and financial analysis, applying customized filters based on the Altum Investment Guidelines. This makes it possible to clearly identify which companies are compatible with Catholic values—and which are not.

With these tools, investors can build genuinely Catholic portfolios, apply faith-based equity screening, and manage wealth with coherence, transparency, and technical excellence.

A Faith That Is Also Invested

Faithful Investing demonstrates that faith and finance are not only compatible—they can strengthen one another. Evangelizing the financial world becomes possible when clear principles, professional tools, and a deep conviction align: capital must serve the human person.

At Altum, we believe that investing well is also a form of witness. And today, perhaps more than ever, the world needs investors who live their faith coherently—even in the markets.

For more Faithful Investing, click here.