Vanguard's Anti-Gun Investment: Funds For A Safer Future

The Vanguard Total Stock Market ETF, iShares Russell 2000 ETF, and Schwab U.S. Broad Market ETF are among the major funds that invest in gun stocks. While these funds are passive investors in gun stocks, with the shares being members of certain indexes tracking the economy, the scrutiny on Wall Street's largest exchange-traded funds has led to discussions about the extent of their investments in gun manufacturers. With concerns about social impact, human rights, and regulatory risks, investors are increasingly seeking sustainable and weapon-free portfolios. As a result, some pension funds and institutions are reevaluating their investments in gun makers, and platforms like Gun Free Funds and Weapon Free Funds offer tools to help investors identify and move their money out of weapon-related investments.

Vanguard 500 Index Fund

The Vanguard 500 Index Fund is an open-end mutual fund that offers investors exposure to the performance of the S&P 500 Index, a broad-based index of 500 large US companies across diverse sectors. The fund aims to provide investors with a diversified portfolio of stocks that mirror the index's performance.

However, it's important to note that this particular fund has come under scrutiny for its investments in certain industries, including the gun industry. According to sources, the Vanguard 500 Index Fund is invested in civilian firearm manufacturers and retailers, with an exposure of 0.1% to 0.4%. This has resulted in a grade of 'D' by Gun Free Funds, indicating that the fund does not align with the values of those seeking to avoid investments in the gun industry.

The fund's breakdown shows investments in gun manufacturers and retailers like Northrop Grumman Corp, as well as investments in military weapons, earning it a 'D' grade in this category as well. Additionally, the fund has investments in military contractors, ranging from 2.5% to 4% of its portfolio.

While the Vanguard 500 Index Fund provides exposure to a wide range of US companies, its investments in the gun industry and military weapons may be a concern for investors who prioritize aligning their investments with their values. It's always important to conduct thorough research and due diligence before making any investment decisions.

For investors seeking to avoid supporting the gun industry, there may be other Vanguard funds or alternative investment options that better align with their values and preferences. It is worth noting that Vanguard offers a wide range of funds with different investment strategies and focuses, so investors have a variety of options to choose from.

Vanguard Developed Markets Index Fund

The Vanguard Developed Markets Index Fund is an exchange-traded fund (ETF) that has been assigned a grade of C for its investments in the gun industry. The fund's exposure to the gun industry is below the threshold of 0.1%, with 0.03% ($52.46 million) invested in gun manufacturer and major gun retailer stocks.

The fund's investments in gun retailers and manufacturers include SNT Motiv Ordinary Shares. The fund also has investments in military arms manufacturers and services companies, including nuclear weapon manufacturers and servicers, although the details of these investments are not provided.

In addition to its investments in the gun industry, the Vanguard Developed Markets Index Fund also has investments in coal, oil, and natural gas energy and utility companies, as well as related financial companies. The fund also has investments in deforestation-risk agricultural commodities and related financial companies and consumer brands.

The fund's sustainability report card, provided by As You Sow's Invest Your Values, grades mutual funds on environmental and social issues, including climate change, gender equality, and weapon investments. The fund's performance data is provided by Morningstar.com.

Overall, the Vanguard Developed Markets Index Fund's exposure to the gun industry is relatively low, with investments in civilian firearm manufacturers and retailers making up only a small portion of its portfolio. However, it is important to note that the fund also has investments in military weapons and other controversial industries, which may be a consideration for potential investors.

Vanguard Total Stock Market ETF

The Vanguard Total Stock Market ETF (VTI) is an exchange-traded fund that offers investors broad exposure to the US equity market. The fund aims to track the performance of the CRSP US Total Market Index, which includes large, mid, and small-cap stocks, covering approximately 99.5% of the investable US stock market.

While the Vanguard Total Stock Market ETF provides diverse investment opportunities, it is important to note that it has investments in the gun industry. According to Gun Free Funds, the fund is invested in civilian firearm manufacturers and major gun retailers, with exposure above the threshold of 0.1% and below 0.4%. This has earned the fund a grade of D from Gun Free Funds in terms of gun investments.

As of July 31, 2024, the Vanguard Total Stock Market ETF had approximately 0.73% or $12.13 billion invested in gun manufacturer and major gun retailer stocks. This includes investments in companies such as Northrop Grumman Corp, Dick's Sporting Goods Inc., and Academy Sports and Outdoors Inc. Ordinary Shares.

For investors who are particularly conscious about aligning their investments with their values, the fund's exposure to the gun industry may be a significant consideration. It is worth noting that Gun Free Funds provides resources to help investors make informed decisions and take action, such as asking employers about adding gun-free options to retirement plans and finding sustainable funds that are gun-free.

Additionally, the Vanguard Total Stock Market ETF has investments in other areas that may be of interest to socially responsible investors. These include investments in coal, oil, and natural gas energy companies, deforestation-risk agricultural commodities, prison operators, military arms manufacturers, tobacco companies, and more.

Investments in civilian firearm manufacturers

Some Vanguard funds have exposure to civilian firearm manufacturers, although the percentage of their investments in this area is relatively small. For example, the Vanguard 500 Index Fund (VOO) has a grade of D, with 0.78% ($9.36 billion) of its portfolio invested in gun manufacturer and major gun retailer stocks. Similarly, the Vanguard Total Stock Market Index Fund (VTI) has a grade of D, with 0.73% ($12.13 billion) invested in these stocks. The Vanguard 500 Index Admiral (VFIAX) is another fund with investments in civilian firearm manufacturers, although it primarily focuses on military weapons and contractors.

Other funds with exposure to civilian firearm manufacturers include the iShares MSCI ACWI ETF (ACWI), with 0.51% ($94.02 million) invested in gun-related stocks, and the American Funds Investment Company of America® (RICFX), with 0.39% ($567.86 million) invested in the same. These funds have also been assigned grades of C and D, respectively, by Gun Free Funds.

It is important to note that these funds' investments in civilian firearm manufacturers represent a small proportion of their total portfolios. Investors seeking to avoid funding the gun industry can consider other funds with no exposure to this sector or explore sustainable and socially responsible investment options.

Military weapon investments

Investing in companies involved in producing military weapons is a risky business. There are many concerns about social impact, human rights, reputation risk, and regulatory risks. Weapon-free investing has been a common component of sustainable investing for decades. Despite global calls for restraint and nuclear disarmament, investor-owned companies are involved in developing, maintaining, and stockpiling nuclear weapons. Some arms producers also manufacture internationally banned weapons, such as cluster munitions, anti-personnel landmines, incendiary weapons, and depleted uranium.

Vanguard 500 Index Fund is a fund that has investments in military weapons. It earns a D grade for these investments, which include military contractors, manufacturers/servicers of nuclear armaments, and controversial weapons manufacturers. The fund is also invested in civilian firearm manufacturers and retailers.

The Vanguard Total Stock Market ETF is another fund with investments in gun stocks, including American Outdoor Brands and Sturm, Ruger & Co. However, these gun stocks tend to comprise a very small fraction of the entire fund, less than 1%.

Vanguard Developed Markets Index Fund is another fund with exposure to gun manufacturers and retailers, although it is invested below the threshold of 0.1% and is assigned a grade of C.

For investors who want to avoid investing in the gun industry, there are sustainable and weapon-free fund options available. These funds are designed for people who want to align their investments with their values and ensure their money is making a positive impact.

Frequently asked questions