At the end of July the Wall Street giant announced that the Global Catholic Ethical Balanced Fund will close down in September.
The fund was meant to attract Catholic investors as it ensures the respect of Catholic principles.
The fund was created last May to emulate the success of sharia-compliant investment schemes, that are in line with the principles of Islamic Law.
But things did not turn out as anticipated and instead of the expected 30 million dollars the fund attracted just 4.4 million.
Hence, due to "reduced prospects of attracting new investment into the sub-fund", the choice was made to close it. Afterall the results had not been all that exciting even for those who had chosen the "Catholic way" to invest.
The fund's value had only risen by 7% over the course of the year and according to the latest three months perspective study released by JPMorgan it had delivered less satisfying results than the average of that kind.
According to the Financial Times, the fund’s genesis was sparked by a suggestion from ,among others, Gruppo Re, an Italian company that provides management and financial services to the Catholic church.
Investments in bonds and equities by the fund, were analysed to determine their suitability and adherence to Catholic beliefs in consultation with an advisory body composed of “high-ranking” representatives of the Roman Catholic church and chaired by a member from Gruppo Re. The fund manager declined to comment on the identity of these representatives.
The "Catholicity" of the fund's investments was evaluated in collaboration with ECPI,an Italian sustainability research company which also guarantees the exclusion of controversial sectors like the military industry, pornography, gambling, tobacco and alchol, contraceptives and nuclear energy from the investment options .
The Global Catholic Ethical Balanced Fund invested largely in companies like Pepsi, the mineral giant BHP Billiton and the luxury giant LVMH.
The launch of the fund was even advertised in Catholic newspapers. JPMorgan how ever is one of the protagonists of the financial explosion that significantly contributed to the economic crisis and this did raise many doubts in the Italian Catholic world.
"Is it right (and Catholic) to support a company that created an Indian reservation for ethical economy, but at the same time in the everyday business keeps speculating with Credit default swaps? And perhaps fights regulations to stop banks gambling with people's savings?" asked the monthly PIME magazine Mondo e Missione ( World and Mission).
With the fund closing down these questions have been answered in a way.