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These mutual fund firms have the most invested in gun manufacturing

You could be invested in gun-related companies without your knowledge.

National Rifle Association members visit exhibitor booths at the 146th NRA Annual Meetings & Exhibits on April 28, 2017 in Atlanta, Georgia. CREDIT: Zach D Roberts/NurPhoto via Getty Images
National Rifle Association members visit exhibitor booths at the 146th NRA Annual Meetings & Exhibits on April 28, 2017 in Atlanta, Georgia. CREDIT: Zach D Roberts/NurPhoto via Getty Images

Since the mass shooting in Parkland, Florida, corporations and banks have begun to reexamine their relationship to the gun industry. Over two dozen companies have cut ties with the National Rifle Association, multiple retail stores have changed their policies to make it harder to purchase guns, and at least one bank has said it’s considering its role in the financing of gun manufacturing. 

The activity has largely been driven by consumers, who continue to flood these companies with messages on social media, launch boycotts, and otherwise persuade major corporations that it is financially advantageous for them to back away from the gun industry.

But many of those same consumers may also be unwittingly funding companies that manufacture guns and bullets.

Emily Laermer, a data reporter with Ignites, a publication of the Financial Times, compiled a list of the ten mutual fund firms that hold the most shares of the five major publicly-traded companies working in the firearm industry. Those companies include gun manufacturers Sturm Ruger, Vista Outdoor, and American Outdoor Brands (which owns Smith & Wesson); Olin, which owns Winchester, one of the largest commercial ammunition manufacturers; and Sportsman’s Warehouse, a retailer that sells hunting and shooting gear. 

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Together, these ten firms manage ten trillion dollars in mutual fund and exchange-traded fund (ETF) assets, and hold a combined 89 million shares in gun-related companies. Half of these shares are in funds that are actively managed, while the other half are in passive funds that track an index and don’t have management teams making investment decisions. 

In some cases, a very small percentage of the fund is invested in gun-related stocks. For example, one fund managed by Vanguard has just .001 percent of its portfolio in these companies. But others hold more, like Invesco/PowerShares which oversees a fund with over 3.5 percent of its portfolio in gun-related stocks. 

In the two weeks since the Parkland shooting, two of these firms — BlackRock and State Street — have acknowledged their role in financing these manufacturers, and have said they plan to open conversations with gun manufacturers, although they have not detailed what actions they may take.

“We will be engaging with weapons manufacturers and distributors to understand their response to recent events,” a BlackRock spokesman said in a statement, adding that his firm is working with individual clients who want to exclude from their portfolios “weapons manufacturers or other companies that don’t align with their values.”

Other funds have just begun to consider their role in response to pushback from clients and lawmakers, including Sen. Elizabeth Warren (D-MA). On Tuesday, the senator sent letters to nine major investment firms that are the largest stakeholders in gun manufacturers, urging them to use their financial clout to reduce gun violence.

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“Your company is in a powerful position,” she wrote. “You have reaped significant benefits from your investment in gun manufacturers, but have done little to reduce the violence and murders caused by their products. I encourage you take action to ensure that the gun companies in which you invest are taking steps to reduce gun violence.”

As Ignites noted, gun stocks typically perform well after mass shootings, but in the weeks since Parkland, their values have sunk. That change could indicate that a larger shift across the country when it comes to guns.

CREDIT: Diana Ofosu/Emily Laermer
CREDIT: Diana Ofosu/Emily Laermer

The ten firms with the most invested in gun-related companies include:

Vanguard

Vanguard manages a total of $4.509 trillion in mutual fund and ETF assets. In total, the firm has 19.4 million shares of gun-related stocks in 27 different funds. Eighteen percent of its funds have exposure to gun-related stock.

Four percent of Vanguard’s gun-related shares are in actively managed funds.

John Woerth, a spokesperson for the firm, told ThinkProgress that a “modest subset” of Vanguard stocks are in firearm stocks, and investors can screen funds if they are concerned. He also said that the firm privately engages with companies on issues like guns.

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“In instances where societal issues intersect with investment risk (e.g., climate risk and board diversity), we have engaged companies,” he said. “We will follow this approach with gun manufacturers. Specifically, we believe that boards and managements of gun manufacturers should disclose and mitigate the risks associated with gun violence and the ongoing national debate on gun safety and control.”

Fidelity

Fidelity manages a total of $1.55 trillion in mutual fund and ETF assets. In total, the firm has 15.6 million shares of gun-related stocks in 55 different funds. Sixteen percent of its funds have exposure to gun-related stock.

Eighty-two percent of Fidelity’s gun-related shares are in actively managed funds.

A representative was not immediately available to comment.

BlackRock/iShares

BlackRock/iShares, the world’s largest asset manager, manages a total of $1.678 trillion in mutual fund and ETF assets. In total, the firm has 11.7 million shares of gun-related stocks in 29 different funds. Six percent of its funds have exposure to gun-related stock.

Just .04 percent of BlackRock’s gun-related shares are in actively managed funds.

Representatives for BlackRock said they issued a client update Friday saying that the shooting in Parkland “requires response and action from a wide range of entities across both the public and private sectors.” The report outlines how the firm will offer clients “a choice of products that exclude firearms manufacturers and/or retailers if clients choose to do so,” and how the firm plans to engage with firearms manufacturers.

“We have already had constructive discussions with some, and we are continuing to pursue our engagement with them all,” the client update said. Representatives declined to comment further.

Dimensional Fund Advisors

DFA manages a total of $422 billion in mutual fund and ETF assets. In total, the firm has 10.6 million shares of gun-related stocks in 23 different funds. Twenty-seven percent of its funds have exposure to gun-related stock.

Almost all — 99.98 percent — of DFA’s gun-related shares are in actively managed funds.

A representative did not immediately respond to a request for comment.

TIAA

The Teachers Insurance and Annuity Association manages a total of $137 billion in mutual fund assets. In total, the firm has 10.3 million shares of gun-related stocks in 12 different funds. Thirty-two percent of its funds have exposure to gun-related stock.

A vast majority, 84 percent, of TIAA’s gun-related shares are in actively managed funds.

A representative did not immediately respond to a request for comment.

Invesco/PowerShares

Invesco/PowerShares manages a total of $320 billion in mutual fund and ETF assets. In total, the firm has 6.1 million shares of gun-related stocks in 13 different funds. Five percent of its funds have exposure to gun-related stock.

Ninety-two percent of Invesco/PowerShares’ gun-related shares are in actively managed funds.

A representative was not immediately available to comment.

First Eagle

First Eagle manages a total of $86 billion in mutual fund assets. In total, the firm has 5.4 million shares of gun-related stocks in three different funds. Forty-three percent of its funds have exposure to gun-related stock.

All of First Eagle’s gun-related shares are in actively managed funds.

A representative was not immediately available to comment.

Franklin Templeton

Franklin Templeton manages a total of $389 billion in mutual fund and ETF assets. In total, the firm has 4.2 million shares of gun-related stocks in three different funds. Two percent of its funds have exposure to gun-related stock.

Almost all — 99.9 percent — of Franklin Templeton’s gun-related shares are in actively managed funds.

A representative was not immediately available to comment.

Delaware Funds by Macquarie

Delaware Funds by Macquarie manages a total of $52 billion in mutual fund assets. In total, the firm has 2.9 million shares of gun-related stocks in three different funds. Six percent of its funds have exposure to gun-related stock.

All of Delaware Funds by Macquarie’s gun-related shares are in actively managed funds.

A representative was not immediately available to comment.

State Street Global Advisors

SSGA manages a total of $686 billion in mutual fund and ETF assets. In total, the firm has 2.8 million shares of gun-related stocks in 16 different funds. Ten percent of its funds have exposure to gun-related stock.

None of SSGA’s gun-related shares are in actively managed funds.

“We will be engaging with weapons manufacturers and distributors to seek greater transparency from them on ways that they will support the safe and responsible use of their products,” a spokesperson said. “And we will also seek to ensure that any shareholder resources used to influence legislation and regulations or fund other advocacy efforts is consistent with the company’s public views.”

All of the data included is from the firms most recent filing, on Dec. 31, 2017. This story will be updated as more firms respond.