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.”  

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[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.

For more Market Reviews, click here.

[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.

Fixed income, meanwhile, is maintaining the momentum we saw last year: short maturities are performing better than long ones. This behavior is significant, as it may be anticipating what is happening, or may happen, in the future.

• S&P 500: +1.37%
• Nasdaq: +1.20%
• Stoxx Europe: +3.18%
• MSCI All Country World Index (EUR): +1.27% (the dollar fell 0.90%, while the index in USD rose 2.83%).
• Global Fixed Income Index (EUR): -0.35% (the dollar fell 0.90%, so the USD index rose 0.11%).

The start of the year didn’t even give us time to settle into our chairs. On January 3, the capture of Nicolás Maduro and his transfer to the United States acted as a real wake-up call for the markets. Beyond the political component, the impact was clearly felt in oil: Brent rose from around $60 per barrel to nearly $70 throughout January, reflecting the increase in geopolitical risk premium in a market already tight in terms of supply.

The so-called “Magnificent 7” rose by only 0.55%, clearly below both the S&P 500 and the Nasdaq. This behavior is relevant because it challenges one of the most repeated narratives of recent years: that a small group of companies can sustain the market indefinitely. January suggests that investors are becoming more selective.

So who has led the gains? To delve a little deeper into the analysis, we take as a reference the US index that groups together the 3,000 companies with the highest market capitalization. The best-performing sectors for the month were energy (+17.63%) and materials (+16.10%), while the last on the list was, surprisingly… TECHNOLOGY!!!, with a drop of -3.87%.

The market is beginning to question the real profitability of the huge investments announced by many companies linked to artificial intelligence. From a prudent perspective, we prefer not to be exposed to this type of gamble. The case of Microsoft was revealing: its share price fell by nearly 10%. The market did not punish the quality of the business, but rather the sharp increase in CAPEX in artificial intelligence. The market is questioning whether it will be profitable.

At the same time, the Bloomberg Commodity Index has risen 8%, while gold has advanced 10% and silver 11%.

Movements in commodities, especially precious metals, are often an early sign of increased uncertainty. When they rise in a coordinated manner, the market is paying a premium for protection… and warning that the year is not going to be exactly boring. The reasons that immediately come to mind are growing tensions between the United States and other countries, Donald Trump’s increasingly harsh foreign policy tone, an energy market that is already tight in terms of supply, and even less common events, such as the renewed geopolitical focus on Greenland. I believe these events may have an influence, but there is a somewhat deeper interpretation that has to do with the US government’s accounts.

As I mentioned earlier, the performance of fixed income provides us with valuable information. Short-term bond yields are falling, largely influenced by central banks’ interest rate management. However, yields on longer maturities, which are more driven by investor supply and demand, remain stable or are even rebounding.

Source: Bloomberg

The brown line represents the yield curve as of December 31, 2024, and the green line represents the yield curve as of February 5, 2026. The red downward arrow indicates the decline in yields on one-year government bonds (-0.67%, from 4.15% to 3.47%). The red circle marks the stability of the 10-year bond, while the upward arrow indicates the increase in the yield on the 30-year bond.

As a result, investors are buying short-term debt and selling very long-term debt. Why[1]? Investors are confident that interest rates will fall in the short term, but are beginning to demand greater compensation for fiscal risk, long-term inflation, and fewer buyers who are insensitive to price.   

If we add the evolution of the US deficit to this analysis, the picture becomes clearer. The graph shows the evolution of the US deficit in the 21st century. The trend is clearly upward and, according to official projections by the Congressional Budget Office (CBO), the deficit in 2026 will reach -6%, above the last recorded figure of -5.36%.

Source: Bloomberg

This implies that public spending structurally exceeds revenue. It should be remembered that during the COVID pandemic, spending increased due to exceptional circumstances, as shown in the graph (dip in 2020). This imbalance must be financed with debt, and this is where a worrying fact arises: US public debt already represents approximately 120% of GDP, meaning that the volume of debt is 1.2 times the country’s production.

The main buyers of US debt have historically been pension funds and insurance companies, both domestic and international, as well as countries such as China and Japan. However, China has reduced its debt purchases and is significantly increasing its gold reserves. This can be interpreted as an attempt to weaken the role of the dollar as the world’s reserve currency and, at the same time, to gradually replace the dollar with gold on its balance sheets.

The big question is: who is replacing these purchases of US debt? The Federal Reserve? For how long? We don’t know. This helps explain why US government bond yields have not fallen and have even risen in the longer maturities: there are fewer and fewer structural buyers, and not just China. What is the result? Just look at these two charts: gold and the dollar against the euro.

Source: Bloomberg

Gold has risen 64%, while the dollar, against a basket of international currencies, has fallen 9%.

And this is not just a problem for the United States. This image shows public spending as a percentage of GDP around the world. Dark brown represents countries with public spending above 40%, lighter brown between 30% and 40%. Most of Europe spends more than 40% and the United States more than 30% and rising. At the beginning of the 20th century, it was between 0% and 10%.

Source: IMF

I have nothing against public spending as long as it makes sense, but these levels imply high taxes and increased debt. Does it make sense? Well, that’s what investors are worried about.  

What does all this smell like? Growing uncertainty about the US public accounts, where debt interest payments already exceed defense spending. As a result, there is a gradual loss of confidence in the dollar.

This brings us back to the world of commodities, and in particular precious metals such as gold and silver. Why are they rising so sharply? For me, there are two fundamental reasons:

• Less supply and the same or growing demand.
  • Since the commodities crisis caused by overcapacity generated as a result of the Chinese supercycle, many of these companies have canceled projects.
  • Environmental regulations that impose many obstacles to production.

Silver, for example, is used in various industries such as electronics, solar energy, automotive, and jewelry, so demand remains strong.

• Protection. We have seen that one of the uncertainties is future inflation.
  • We have already seen that raw materials have begun to rise sharply, and if I had to bet, this will continue in the near future.  
  • The growing deficit is inflationary if there is full employment. The unemployment rate in the United States is 4.4%, which implies full employment.

With regard to gold, there has been a significant increase in purchases by central banks globally. According to a survey by the World Gold Council, 95% of central banks expect to increase their gold reserves over the next twelve months. This trend invites reflection: what are the major institutional players anticipating?

This behavior fits with a macroeconomic scenario such as the one described above. In this context, it is reasonable to consider whether it is advisable to seek protection against inflation. In our opinion, the answer is yes, provided that a prudent and diversified approach is taken.

There are different ways to gain exposure to this type of protection: direct investment in gold, silver, or other commodities, as well as investment in companies linked to these sectors. However, it is important to note that not all of these companies behave in the same way.

For example, gold producers tend to benefit from rises in the price of the metal, as a significant portion of their costs are fixed, which generates an operating leverage effect and increased margins. On the other hand, developers do not yet produce gold, but they have identified deposits and are working to bring them into production; these are companies with greater volatility, but also with high potential for appreciation. Finally, royalty companies provide financing for mining projects in exchange for a contractual right to a portion of the economic value of production, allowing them to operate with very low costs and structurally high margins.

Beyond raw materials, investing in companies with real assets is also an effective tool for protecting against inflation. Keeping capital tied up in an inflationary environment implies a progressive loss of purchasing power, commonly known as the “invisible tax” on savings.

Therefore, investing prudently and in a well-diversified manner is not a matter of opportunity, but of preserving wealth. If the goal is to maintain the same consumption capacity in the future as today, postponing investment has a cost. In this sense, tomorrow may be too late to start investing.

[1] Remember that bond prices move inversely to interest rates.

More and more Catholic investors and religious institutions are asking how they can place their assets at the service of their mission without compromising their values. The good news is that this is now possible through ethical investing, socially responsible investing, and, more specifically, faith-based investing rooted in Catholic teaching.

Is it right for a Catholic to invest money?

The Church clearly teaches that investing is lawful and legitimate. We are stewards — not absolute owners — of the goods entrusted to us. This Christian understanding of prudent stewardship calls us to manage resources with responsibility and generosity.

Investing allows capital to contribute to economic and social development by supporting productive activities that generate employment, innovation, and prosperity. However, the key question is not whether one invests, but how one invests. Catholic responsible investing cannot finance activities that undermine human life, human dignity, the family, or the care of creation.

Principles of faith-based investing

Catholic values investing is built upon four fundamental pillars:

1. Respect for human life, from conception to natural death.
2. Defense of human dignity, avoiding any form of exploitation or abuse.
3. Protection of the family as the fundamental cell of society.
4. Care for creation, promoting sustainable and responsible development.

These principles, grounded in the Social Teaching of the Church, provide a stable ethical framework and a moral roadmap that remains consistent over time.

Ethical investing and socially responsible investing from a Catholic perspective

Socially responsible investing has gained popularity in recent years, but Catholic investing goes a step further. It is not enough to assess environmental, social, and governance factors alone; a Christian anthropology that places the human person at the center of society and the economy is essential.

Catholic ethical investing combines two inseparable dimensions:

• Exclusion of wrongdoing, avoiding sectors such as abortion, pornography, indiscriminate weapons, or research involving human embryos.
• Promotion of the good, investing in companies that actively contribute to the common good through just and responsible practices that do not conflict with Catholic moral teaching.

How can you know if a company aligns with Catholic values?

One of the greatest challenges for Catholic investors is access to reliable and transparent information. Many companies conceal practices contrary to Christian values behind complex structures or ambiguous corporate responsibility policies.

For this reason, it is essential to rely on a stock screening tool that allows for a thorough analysis of a company’s real activities. This is where professional investing tools become indispensable, making it possible to apply a rigorous ethical filter without sacrificing financial analysis.

Altum Explorer and professional investing tools

Altum Explorer is a professional Catholic investing tool created to evaluate thousands of publicly listed companies worldwide. Its methodology is based on the Altum Investment Guidelines, fully aligned with the Social Teaching of the Church.

Through this Catholic stock screener, investors can:

• Identify companies that are incompatible with Catholic values.
• Build customized Catholic investment portfolios.pu
• Compare ethically coherent alternatives.
• Make informed decisions using professional standards.

This makes Altum Explorer a key ally for Catholic investment advisors, Catholic investment funds, and institutional investors seeking both coherence and technical excellence.

Profitability and coherence are not opposites

One of the most common misconceptions is that faith-based investing requires sacrificing financial returns. Experience shows that it is entirely possible to build solid and competitive portfolios by applying clear ethical criteria.

Purposeful investing does not renounce financial performance; rather, it integrates it within a broader vision of integral human development. Coherence fosters trust, stability, and a long-term perspective.

Bearing witness through financial decisions

Investing according to Catholic values is a concrete way of integrating faith into everyday life. Every financial decision has a real impact on society. Aligning faith and finance is a way of living the Christian vocation within the economic sphere.

Ultimately, Catholic investing is not a trend, but a coherent response to the call to live the faith in every dimension of life — including financial decisions.