Morningstar introduces tags for Christian & Catholic funds, maps faith investing landscape

Investment research and ratings firm Morningstar has just introduced tags for Christian and Jewish funds for the first time, and has mapped the global faith-based investment landscape. Its report contains some interesting findings, writes Susie Weldon.

Faith-based investors represent a small but growing segment of the global investor landscape, according to investment tracker Morningstar's new report, Faith-Based Investing: Global Landscape, which comes as it has just introduced new tags to identify Christian, Catholic and Jewish funds for the first time.

The report says the global universe of faith-based funds accounts for roughly $169bn of assets under management (AUM), with 853 active funds across the US, Middle East, Asia, and Europe as of April 30, 2026.

However, it points out that the number of faith-based funds is tiny compared to the potential market: 'The number of adherents to Christianity and Islam alone numbers over four billion people; thus, the total addressable market is enormous, yet the funds explicitly built to serve them remain a fraction of that potential.'

And there are notable gaps, particularly for Christian and Catholic investors. 'Coverage skews heavily toward broad, generalist equity strategies, with only a handful of fixed-income, specialist equity or alternative products, and passive options remain limited,' the report says.

In addition, on average, faith-based funds are more expensive than their nonreligious counterparts, which the report says reflects 'lower levels of competition, particularly from passive alternatives, which have been growing quickly over the past few years'.

Majority are Shariah-compliant funds

To map the global religious investor landscape, Morningstar used information gathered from prospectuses to identify funds whose investment policy explicitly aligns with the principles of religious institutions, or which derive their investment principles in accordance with religious institutions.

'Of these 853 funds, 650 were Shariah, 114 were nondenominational Christian, 87 were Catholic funds, and one was a Jewish fund,' the report says.

Total AUM (USD) in religious strategies

Difficulty in identifying faith funds

Until now, apart from Sharia-compliant funds, which have been tagged since 2011, faith-aligned funds have been hard to identify on investment-tracking websites such as Morningstar.

That was a key complaint of delegates to the second Mensuram Bonam conference in London two years ago and Morningstar has now taken steps to address this, introducing tags for Catholic, Christian and Jewish funds in the US from April this year, and in Europe, Asia and Africa from July 2026.

That's good news for these faith-based investors. But Morningstar points out that a key issue for Christian investors is that the market remains highly segmented, with little standardisation or coordination between faith-based investors, and divergent views on both exclusion and execution.

One reason why there are three times more Shariah funds than Christian funds is that attempts to standardise the Shariah market began relatively early, with the establishment of the Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI) in 1990 and Malaysia's Islamic Fund and Wealth Management Blueprint in 2017. In addition, there is widespread agreement around exclusions.

Meanwhile, equivalent frameworks for Christian and Catholic indexes were not

developed until the 2010s and there are divergent views on both exclusion and execution, as can be seen by the graphic below.

Hard exclusions by faith

No single authority

As the report says: 'There is no single authority or approach to constructing a personalised portfolio such that it fits an interpretation of doctrine.'

As a result, faith-based investing is not a single coherent strategy class, but rather 'a collection of heterogeneous frameworks that vary systematically in strictness, interpretability, and implementation structure'.

Even within the same faith tradition, different approaches can lead to markedly different portfolios. For example, French Catholic bishops have tended to be more supportive of nuclear energy, whereas German Catholic bishops have often taken a more restrictive stance.

The report warns that investors 'should not assume a shared label implies a shared set of exclusions'. It adds: 'Indeed, political and doctrinal differences, combined with a lack of standardisation, drive notable divergences between regions – European funds tilt away from energy and toward growth under stronger environmental, social, and governance integration, while US funds retain meaningful energy and defense exposure.'

This is a fascinating report with a great deal of useful information. You can download it from Morningstar's website here.