Case Study: Developing a Custom Catholic Index to Scale a Small Firm
See how one Thematic client relied on our AI-powered platform to develop a financial product that reflects its values (and opens new doors).
Our client spent over 30 years guiding high-net-worth families in the upper midwest toward financial security. After early days at EF Hutton and managing almost $2 billion in assets at Fidelity, he had demonstrated expertise and innovation throughout his career. But a more personal endeavor brought him to Thematic.
The client founded an independent advisory that specializes in holistic strategies to help high-net-worth families – many of which are entering their second generation with the firm – build wealth through each stage of life. His clients’ Christian values often shape their financial decisions, so our client wanted to develop a new solution that avoided headline risk and offered more flexibility than existing financial products (like the Global X Catholic Values S&P 500 ETF (CATH)).
The Vision: A Catholic Values Index
The idea started with a simple yet ambitious goal: create a customized investment index that reflects the risk profile, the sector allocation, and the performance of the S&P 500 while adhering to the U.S. Conference of Catholic Bishops’ approved stock list.
The client envisioned a streamlined portfolio of 50 stocks, rather than the full 438 companies approved by the Bishops. This focused approach would not only simplify portfolio management but also eliminate ETF fees, allow for better tax-loss harvesting, and mirror the sector allocation of the broader market.
“I believe in diversification,” the client explains, “but not over-diversification. If you have 500 stocks in a portfolio, what are clients really paying you for?”
Armed with this vision, our client began building the framework himself using spreadsheets and a yellow legal pad. But he knew he needed more than just a good idea. He needed a way to validate and fine-tune his initial calculations to turn his concept into a professional-grade product. That’s when he turned to Thematic.
Partnering with Thematic
Thematic’s AI-driven indexing platform was the perfect match for his vision. Unlike traditional providers that can take months to build custom indices, Thematic specializes in speed and efficiency, allowing portfolio managers to test and refine their strategies in real time.
He came to the Thematic team with his index idea already sketched out, and Thematic helped turn his groundwork into a polished, actionable product in no time.
“They took my strategy and honed it,” the client recalls. “They backtested it, double-checked my homework, and ensured everything met my goals. It was really nice to have that level of precision and support.”
Thematic also brought powerful tools and expertise to the table, including:
Backtesting and benchmarking: Instant analysis confirmed that the new index could track its S&P 500 benchmark.
Automated updates and rebalancing: The platform integrated seamlessly with the Bishops’ approved stock list, ensuring any changes to the list would automatically update the index.
A custom symbol: Thematic provided the client with a proprietary ticker symbol, giving him an easy way to monitor his index and publish its performance on Bloomberg, Morningstar, and Reuters.
Perhaps most importantly, Thematic’s team offered hands-on support to make developing a values-based index less of a leap of faith. The client, who describes himself as “a tech luddite,” was impressed by the level of service.
“They walked me through every piece of technology,” he says. “If I didn’t know something, they took care of it. Their customer service has been fantastic.”
The result? An asset management product that grows the firm (and clients’ portfolios)
The result was exactly what the client envisioned: 50-stock Catholic values index that seeks to approximate the S&P 500’s performance while staying true to his clients’ beliefs. But the benefits went far beyond the numbers.
A differentiator for clients: His firm now has a tangible product to offer his clients, something that stands out in a crowded market. “Most advisors are selling themselves,” the client explains. “At the end of the day, that’s just trust. But with this index, I can offer something concrete. Clients want to see discipline—and discipline wins.”
A referral machine: The client also leverages the index as a marketing tool, embedding a Morningstar performance sheet via a QR code on business cards. “It’s a game-changer,” he says. “My clients can see exactly what I’m doing. It’s not just talk—it’s results.”
A license to grow: While the client initially designed the index for his own clients, he hopes to use it to scale his firm’s impact. By licensing the index to other firms or integrating it into separately managed accounts, he can extend its reach and develop an audited track record.
Looking ahead
For the client, the Catholic 50 Index represents more than a financial product—it’s a reflection of his firm’s commitment to meeting the needs of clients. It lets the firm show its work, rather than make broad claims. And with the potential to license the index to other firms, the index also gives our client a new revenue stream.
And the client praises Thematic’s role in the process: “Thematic took me from just a guy with an idea to someone with a robust offering. They’ve made everything easier, from refining my strategy to implementing it. I can’t recommend them enough.”
As he continues to integrate the index into his practice, the client is excited about what’s next—not just for his clients, but for the future of values-based investing.
This is just one of many examples we've seen where AI helps institutional investors develop new products. If you’d like to explore how Thematic can help your firm develop something new, improve workflows, or speed up discovery, we’d love to hear from you: hello@gothematic.com.
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