One of the most common questions Catholic investors ask is whether faith-aligned funds actually keep up with the broader market. The fear is that screening for values comes at a real cost in returns, and that you're essentially paying a tithe through underperformance.

Let's actually look at the data. Here's a 10-year performance comparison of major Catholic mutual funds and ETFs against the S&P 500 benchmark, with context on why each fund performed the way it did.

The Benchmark

The S&P 500 has returned approximately 12 to 13 percent annualized over the 10-year period ending early 2026. This includes dividend reinvestment and represents roughly the experience of holding VOO or SPY continuously for a decade. It's the baseline we're measuring against.

Some context: 10-year returns reflect a period with notable bull market stretches (2016 to 2019, 2020 recovery, 2023 to 2025), one major bear market (2022), and the COVID drawdown and recovery (2020). It's a reasonably representative cycle.

The Catholic Fund Lineup

We'll compare these funds and ETFs:

SPDR Bloomberg SASB Catholic Values ETF (CATH)
Ave Maria Rising Dividend (AVEDX)
Ave Maria Growth Fund (AVEGX)
Ave Maria Value Fund (AVEMX)
Ave Maria World Equity Fund (AVEWX)
Knights of Columbus Catholic Values funds (institutional, various)
Aquinas Small Cap Fund (historical, closed)

Some of these don't have a full 10 years of history (CATH launched April 2016) but we can still draw meaningful conclusions.

CATH: The Cleanest Comparison

CATH is the most direct comparison to the S&P 500 because it's passive, market-cap weighted, and tracks an index that's effectively the S&P 500 minus specific Catholic exclusions.

10-year (approximated since CATH launched April 2016, so slightly less than 10 years): approximately 12 to 13 percent annualized.

Gap vs S&P 500: approximately 0 to 50 basis points per year. Very small.

CATH has essentially kept pace with the S&P 500 over its operating life. The narrow exclusions (weapons manufacturers, certain healthcare companies, adult entertainment) don't meaningfully drag performance because the excluded companies aren't large enough to significantly shift the portfolio. Over a decade, CATH's tracking error versus the S&P 500 has stayed modest.

The honest conclusion: if you want broad Catholic exposure without meaningful performance impact, CATH has delivered. You give up a few basis points per year for the screening and you get a fund that looks and behaves almost like an S&P 500 index fund.

Ave Maria Rising Dividend (AVEDX)

10-year annualized return: approximately 10 to 12 percent.

Gap vs S&P 500: approximately 100 to 250 basis points per year of underperformance.

AVEDX lagged the S&P 500 over the decade, but the gap isn't unique to the Catholic screening. Dividend-focused funds in general lagged the S&P 500 during this period because mega-cap tech (which tends to have low current yields) drove market returns. A comparable non-Catholic dividend fund like VYM (Vanguard High Dividend Yield) returned similarly.

So the real question is: how much of AVEDX's underperformance is due to Catholic screening, and how much is due to the dividend tilt?

Answer: mostly the dividend tilt. If you compared AVEDX to VYM rather than to the S&P 500, the gap would be minimal (within 50 basis points per year). Catholic screening added a small drag, but the dividend focus was the bigger factor.

Ave Maria Growth Fund (AVEGX)

10-year annualized return: approximately 11 to 13 percent.

Gap vs S&P 500: approximately 0 to 200 basis points per year, depending on measurement window.

AVEGX is more growth-oriented and its performance has been closer to the S&P 500 over the decade. In some measurement windows it has slightly beaten the S&P 500, and in others it has lagged modestly. The fund's active management has added or subtracted value depending on the period.

The expense ratio (around 0.90 to 1.00 percent) is a persistent drag that requires the underlying stock selection to beat the benchmark by more than a percentage point just to break even. Over 10 years, that's a high bar and AVEGX has not consistently cleared it, but it's been in the neighborhood.

Ave Maria Value Fund (AVEMX)

10-year annualized return: approximately 9 to 11 percent.

Gap vs S&P 500: approximately 150 to 350 basis points per year of underperformance.

Value funds as a category have lagged the S&P 500 substantially over the past decade. Growth has dominated, and value-style investing has had a tough stretch. AVEMX's Catholic screening didn't cause the underperformance; the value tilt did.

If you compared AVEMX to a non-Catholic value benchmark like the Russell 1000 Value, the gap would be much smaller. The Catholic screening itself has been approximately neutral over the period.

Ave Maria World Equity (AVEWX)

10-year annualized return: approximately 7 to 9 percent in USD.

Gap vs S&P 500: approximately 400 to 500 basis points per year of underperformance.

AVEWX's large gap vs the S&P 500 is almost entirely due to its international exposure. International developed markets and emerging markets have significantly underperformed US large caps over the past decade. Any global equity fund, Catholic or not, has lagged the S&P 500 meaningfully during this period.

Comparing AVEWX to a non-Catholic global fund like VTIAX or VXUS would show a much smaller performance gap. The Catholic screening isn't the culprit.

The Underlying Lesson

Here's what the Catholic mutual fund performance data actually shows. Catholic screening itself has been roughly neutral to mildly negative for performance over the past decade. The bigger drivers of fund-level performance have been style factors (growth vs value), geographic exposure (US vs international), and expense ratios.

If you hold a Catholic US growth fund, you'll track close to the S&P 500. If you hold a Catholic value fund, you'll lag the S&P 500, but so will non-Catholic value funds. If you hold a Catholic international fund, you'll lag the S&P 500, but so will non-Catholic international funds.

The Catholic label is not the primary explanation for performance differences. Investment style and asset class exposure explain most of the variance.

What About Expense Ratios

This is where Catholic funds have a real, consistent drag. Active Catholic mutual funds typically charge 0.80 to 1.30 percent per year. Passive alternatives (CATH at 0.29 percent, VOO at 0.03 percent) charge much less.

Over 10 years, a 1 percent expense ratio drag compounds to about 10 percent in cumulative underperformance versus a cheaper alternative. That's real money. On a 100,000 dollar starting investment, that's roughly 12,000 to 15,000 dollars of foregone returns.

So even if Catholic screening itself is approximately neutral, paying actively managed mutual fund fees for it adds real cost. This is why many Catholic investors are increasingly using CATH (0.29 percent) as their core holding rather than expensive Catholic mutual funds.

The Best-Performing Catholic Options Over 10 Years

Ranked by approximate 10-year annualized return:

CATH ETF: approximately 12 to 13 percent. Best risk-adjusted performance because low cost and minimal tracking error.
Ave Maria Growth (AVEGX): approximately 11 to 13 percent. Strong stock picking has partially offset expense ratio drag.
Knights of Columbus Catholic Values Large Cap Growth (institutional): approximately 11 to 12 percent. Mostly available through Catholic institutional channels.
Ave Maria Rising Dividend (AVEDX): approximately 10 to 12 percent. Held up reasonably given its dividend tilt.
Ave Maria Value (AVEMX): approximately 9 to 11 percent. Lagged due to value headwinds.
Ave Maria World Equity (AVEWX): approximately 7 to 9 percent. Lagged due to international exposure.

Building a Portfolio That Actually Keeps Up

If you're a Catholic investor worried about underperformance, here's the honest advice based on the data:

Use CATH as your core US equity holding. It tracks the S&P 500 closely and costs little. The screening is modest but present. Over 10 years, you'll be within a few percent of the broader market.

Consider whether you really need active management. Active Catholic mutual funds can add value, but they have to overcome a 0.80 to 1.00 percent fee headwind. Some have done it, most haven't. Most investors would be better served by cheap passive Catholic exposure (CATH) than by paying up for active management in hopes of outperformance.

Accept international underperformance as a feature, not a bug. If you hold Catholic international funds, they'll lag the S&P 500 because the S&P 500 has outperformed international markets for a decade. That could reverse. International exposure is diversification, not return enhancement.

Use low-cost alternatives where they exist. For fixed income, consider IBD (0.51 percent) over more expensive Catholic bond funds. For international, think hard about whether the Catholic screening cost premium over cheap ESG alternatives is worth it.

The Psychology of Lag

Here's something worth addressing. If you decide to be a Catholic investor and hold Catholic-aligned funds, you need to accept that in some years your portfolio will lag the S&P 500 meaningfully. Not every year, but some years.

The key question is whether you can hold through those lag periods without abandoning your approach. Investors who panic-sell during underperformance and switch to broad market funds end up with worse long-term outcomes than investors who stay committed to their framework through ups and downs.

If you can't handle watching your Catholic portfolio lag the market by 5 to 10 percent in a given year, you probably shouldn't be using values-based investing. You'll make worse decisions by chasing performance. Pick your framework, pick your funds, and stay committed.

Bottom Line

Catholic mutual fund performance over the past decade has been reasonable but not spectacular compared to the S&P 500. The underperformance is mostly explained by fees and style factors rather than by Catholic screening itself. CATH has tracked the S&P 500 closely enough that most Catholic investors can get broad-market-like exposure with minimal return impact.

For investors who want active management, the Ave Maria and Knights of Columbus funds offer viable options, but you have to accept that expense ratios will drag performance over long periods. The practical answer for most Catholic investors is: use CATH as your core, add specialty exposures (dividend, value, international) with cost-aware selection, and don't expect to beat the broader market. That's a reasonable outcome for investing with your values, and the 10-year data supports it as a workable strategy.

Catholic Mutual Fund Performance vs S&P 500: 10-Year Comparison