Mutual Funds And Gun Investments: Where Does Your Money Go?

Many people unknowingly invest in gun-related companies through their mutual funds. About 35% of U.S. stock mutual funds include investments in a maker or retailer of guns and ammunition, which equates to over $17 billion across more than 2,000 funds. Some of the largest mutual fund firms with the most invested in gun manufacturing include Vanguard, Fidelity, BlackRock/iShares, and Invesco/PowerShares. In the wake of mass shootings and growing concerns about social impact, human rights, and regulatory risks, consumers, investors, and lawmakers are increasingly pressuring companies and banks to cut ties with the gun industry and reevaluate their investments in gun manufacturers.

Mutual funds with the most gun and ammo holdings

Many consumers who are unwittingly funding companies that manufacture guns and bullets are demanding that corporations and banks re-examine their relationship with the gun industry. In response, several companies have cut ties with the National Rifle Association, and some retail stores have changed their policies to make purchasing guns more difficult.

According to Emily Laermer, a data reporter with Ignites, a publication of the Financial Times, the ten mutual fund firms that hold the most shares of the five major publicly-traded companies working in the firearm industry 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, and four percent of its gun-related shares are in actively managed funds.

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, and eighty-two percent of its gun-related shares are in actively managed funds.

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, and just .04 percent of its gun-related shares are in actively managed funds.

Dimensional Fund Advisors (DFA)

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, and 99.98 percent of its gun-related shares are in actively managed funds.

Teachers Insurance and Annuity Association (TIAA)

TIAA 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, and 84 percent of its gun-related shares are in actively managed funds.

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, and ninety-two percent of its gun-related shares are in actively managed funds.

Other mutual fund firms with significant investments in gun-related companies include First Eagle, Franklin Templeton, Delaware Funds by Macquarie, and State Street Global Advisors.

Gun stocks and mass shootings

The surge in gun stock prices after mass shootings is driven by panic buying from gun enthusiasts and advocates, who fear that the government will ban weapons or certain accessories or ammunition types in response to the tragedy. This fear is particularly pronounced when Democrats control the government, although there hasn't been a serious push to ban firearms since the 1994 federal Assault Weapons Ban, which expired in 2004. Some firearm accessories, such as bump stocks, have been banned after mass shooting incidents, such as the 2017 Las Vegas shooting, where 12 bump stocks were found in the hotel room of the shooter.

Gun control advocates have long accused gun manufacturers of profiting from flooding the country with deadly weapons, and while the manufacturers have largely avoided responsibility for mass shooting events, there have been some notable exceptions. For example, gunmaker Remington was forced to pay $73 million to the families of the Sandy Hook victims, as the shooter used a Remington-manufactured AR-15 rifle. Rather than trying to hold gunmakers accountable for individual deaths, advocates are now challenging the companies' marketing strategies, targeting young men and playing on their insecurities about masculinity. This strategy has proven effective in reducing cigarette and tobacco advertisements across media.

The issue of gun stocks and mass shootings is a complex one, with financial ties to gun violence being difficult to cut. However, there are efforts to create sustainable and gun-free investment options, with organisations like Gun Free Funds and Weapon Free Funds providing tools and resources to help individuals and businesses align their investments with their values. These organisations offer databases to search for mutual funds and exchange-traded funds (ETFs) to identify those that are invested in gun manufacturers and retailers, and provide information on sustainable and ethical investment options.

Gun-related companies and consumer influence

Gun-related companies and their consumer influence is a multifaceted issue that involves financial, social, and ethical considerations. From an investment perspective, scores of mutual funds have stakes totalling hundreds of millions of dollars in gun and ammunition companies, making them significant shareholders in the firearms industry. This financial involvement has drawn scrutiny due to concerns about social impact, human rights, reputation risk, and regulatory risks associated with investing in companies that produce weapons. As a result, there is a growing movement towards "weapon-free" or "gun-free" investing, where individuals seek to align their investments with their values by withdrawing financial support from companies that manufacture or sell guns.

The influence of gun-related companies on consumers is also notable, particularly through their advertising strategies. Gun manufacturers and retailers utilise various platforms, including social media, to promote the sale of their products. Social media platforms like YouTube, Twitter, and Facebook provide a vast reach and have been instrumental in connecting viewers to websites that sell firearms. Additionally, influencer marketing has become an increasingly important component of their advertising strategies, with influencers on YouTube and other platforms promoting gun culture and normalising gun ownership.

Gun-related companies also leverage celebrity endorsements and partnerships with influential organisations to enhance their consumer influence. For example, Glock has featured Chuck Norris as a spokesperson, while Sig Sauer has partnered with the National Rifle Association (NRA). These associations aim to create positive associations with their brands and increase consumer interest.

Furthermore, gun-related companies employ specific marketing tactics to target certain demographics. For instance, advertisements often include women to market handguns and pistols for personal protection, exploiting concerns about safety. Recreation and hunting themes are also prevalent in their advertising, appealing to those interested in shooting sports or outdoor pursuits. Military, patriotic, and law enforcement themes are commonly used to attract those who value these aspects of gun culture.

In addition to direct advertising, gun-related companies benefit from the normalisation of gun use in popular culture. The presence of firearms in movies, television shows, and video games contributes to the perception of guns as commonplace and even desirable. This normalisation can influence consumers' attitudes towards gun ownership and potentially increase demand for the products offered by gun-related companies.

Lastly, gun-related companies have a significant impact on consumer behaviour through their role in shaping gun culture and legislation. By funding and collaborating with organisations like the NRA, these companies influence public discourse and policy-making, often in favour of lax gun control regulations. This, in turn, can affect consumer access to firearms and shape societal attitudes towards gun ownership, self-protection, and personal freedom.

Mutual funds and gun safety

Mutual funds are an investment vehicle that pools money from many investors to purchase a diversified portfolio of assets. However, it has come to light that scores of mutual funds have invested in gun and ammunition companies, with stakes in the industry totaling hundreds of millions of dollars. This has raised concerns among investors who want their investments to align with their values and has sparked a discussion about the role of mutual funds in promoting gun safety.

Many investors are unaware that they may be inadvertently investing in gun-related companies through their mutual funds. According to a tally by the nonprofit advocacy group Goodbye Gun Stocks, about 35% of U.S. stock mutual funds include investments in makers or retailers of guns and ammunition, totaling more than $17 billion across over 2,000 funds. This includes investments in major gun manufacturers like Sturm Ruger, Vista Outdoor, and American Outdoor Brands (formerly known as Smith & Wesson), as well as ammunition manufacturers like Olin, and retailers like Sportsman's Warehouse.

In response to the growing concern over gun violence and the role of the gun industry, some mutual fund firms have started to reevaluate their investments. After the mass shooting in Parkland, Florida, companies like BlackRock and State Street acknowledged their role in financing gun manufacturers and pledged to open conversations with these companies. BlackRock, for example, stated that they would engage with weapons manufacturers to understand their response to recent events and work with clients who want to exclude weapons manufacturers from their portfolios.

However, despite the growing wave of socially responsible investing, some mutual fund companies have continued to invest in gun manufacturers. For example, American Funds' Smallcap World Fund, managed by investing giant Capital Group, became the largest single owner of Smith & Wesson's parent company, American Outdoor Brands, in 2019. This investment raised criticism as it came at a time of rising gun violence and mass shootings across the United States.

To address this issue, websites like Gun Free Funds and Weapon Free Funds have emerged to help investors identify and avoid weapon investments. These websites provide databases that allow users to search for mutual funds and exchange-traded funds (ETFs) to find sustainable, weapon-free portfolios. They also offer resources and toolkits to help investors align their investments with their values and cut financial ties to gun violence and militarism.

Mutual fund firms with the most gun manufacturing investments

Many mutual fund firms have investments in gun manufacturing, and consumers are often unaware that their savings are being invested in firearm manufacturers and retailers.

The ten mutual fund firms with the most investments in gun-related companies include:

Vanguard

Vanguard manages a total of $4.509 trillion in mutual fund and ETF assets. 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 stocks, with four percent in actively managed funds. A spokesperson for Vanguard has stated that a "modest subset" of the firm's stocks are in firearm stocks, and investors can screen funds if they are concerned.

Fidelity

Fidelity manages a total of $1.55 trillion in mutual fund and ETF assets. 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 stocks, with eighty-two percent in actively managed funds.

BlackRock/iShares

BlackRock/iShares is the world's largest asset manager, with a total of $1.678 trillion in mutual fund and ETF assets under management. 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 stocks, with just 0.04 percent in actively managed funds. BlackRock has stated that it will offer clients "a choice of products that exclude firearms manufacturers and/or retailers if clients choose to do so."

Dimensional Fund Advisors (DFA)

DFA manages a total of $422 billion in mutual fund and ETF assets. 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 stocks, with 99.98 percent in actively managed funds.

Teachers Insurance and Annuity Association (TIAA)

TIAA manages a total of $137 billion in mutual fund assets. 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 stocks, with 84 percent in actively managed funds.

Invesco/PowerShares

Invesco/PowerShares manages a total of $320 billion in mutual fund and ETF assets. 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 stocks, with ninety-two percent in actively managed funds.

First Eagle

First Eagle manages a total of $86 billion in mutual fund assets. 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 stocks, with all of the shares in actively managed funds.

Franklin Templeton

Franklin Templeton manages a total of $389 billion in mutual fund and ETF assets. 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 stocks, with 99.9 percent in actively managed funds.

Delaware Funds by Macquarie

Delaware Funds by Macquarie manages a total of $52 billion in mutual fund assets. 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 stocks, with all of the shares in actively managed funds.

State Street Global Advisors (SSGA)

SSGA manages a total of $686 billion in mutual fund and ETF assets. 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 stocks, with none of the shares in actively managed funds. A spokesperson for SSGA has stated that the company will be "engaging with weapons manufacturers and distributors to seek greater transparency...on ways that they will support the safe and responsible use of their products."

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