Mass shootings in Dayton, Ohio and El Paso, Texas have sent the country reeling. It’s reignited the debate about gun control reform, and left some investors asking: ‘Am I investing in gun stocks?’
Most investors invest by placing their money in mutual funds and exchange-traded funds (ETFs) and adopting a “set it and forget it” strategy. These funds are sometimes invested in hundreds of different stocks. As a result, most people don’t actually know how much exposure their portfolio might have to firearm stocks.
According to a report from ThinkProgress, the world’s largest and most well-known fund firms offer numerous funds that hold positions in publicly-traded firearm companies, like Smith & Wesson-parent American Outdoor Brands (AOBC); Sturm, Ruger & Co. (RGR); and Olin (OLN). So unless you’ve thoroughly screened the prospectuses of your funds and ETFs, you may be unknowingly invested in firearm stocks.
For investors who don’t want that exposure, there’s good news. Not only can you check your individual portfolios, but most firms also offer funds that are firearm free. It’s worth noting that funds are comprised of hundreds of stocks, meaning that if your fund does have exposure to firearms, it represents a very small percentage of your investments.
Investors can quickly and easily check a website like Weapon Free Funds to check the risk that their fund is exposed to firearm stocks.
You can also head over to Yahoo Finance, and enter the ticker of the fund into the “Search” bar. Clicking on a tab like “Holdings” will show you the sectors that the fund is invested in, and how heavily. Firearm stocks fall under Industrials, so if your fund is heavily exposed to that sector, there is a chance that a gun stock might be in your portfolio. The holdings tab will also show the top 10 stocks of the fund. But, these funds hold much more than 10 stocks.
For a complete breakdown, you’ll have to dig further and head over to each fund manager’s website to see all of the stocks held. Fund manager’s also provide prospectuses to investors so they can have a more thorough look at what they are invested in.
Socially conscious investing is hot
Firearms aren’t the only stocks that socially conscious investors say they don’t want to be exposed to. There is a growing movement for ESG (environmental, social, and governance) investing — or investing in ways that are mindful of issues around climate, social justice, and corporate governance.
“Increasingly, clients are looking for options to invest in ways that reflect their values,” said a spokesman for BlackRock, the world’s largest asset manager. “As a leading ETF provider, we’ve responded by offering funds that screen out companies involved in firearms producers and retailers, controversial weapons, and tobacco (as well as other industries depending on the strategy) while at the same time seeking to deliver competitive market returns.”
In recent years, ESG funds have grown, as investors seek out portfolios that align with their personal beliefs.
“Due to increased demand for these types of funds, assets invested globally in our sustainable ETF lineup have nearly doubled in the past year,” the BlackRock spokesman added.
And BlackRock isn’t alone. Most asset managers provide clients with an array of ESG funds, including funds that are carbon-free companies for the climate conscious and funds with companies with a track record of good employee relations.
For a list of socially responsible funds, you can check Charles Schwab’s “Socially Conscious Funds List”.
Kristin Myers is a reporter at Yahoo Finance. Follow her on Twitter.