Vanguard Funds: Ethical Investing And Weapons Manufacturers

Vanguard is one of the world's largest investment management companies, and it offers a wide range of funds that cater to different investor needs and preferences. While Vanguard funds cover a diverse array of asset classes and sectors, some people may be curious about whether these funds invest in weapons manufacturers. This is an important consideration for investors who want to align their investments with their values and avoid supporting industries that may conflict with their ethical standards.

Vanguard 500 Index Fund

The Vanguard 500 Index Fund is an open-end mutual fund with a grade of D for its investments in military weapons and civilian firearms. The fund has investments in military contractors, including the largest international arms manufacturers and military contractors, as well as companies involved with controversial weapons such as cluster munitions, landmines, white phosphorus, and depleted uranium. The fund also has investments in civilian firearm manufacturers and retailers, including gun manufacturers and major gun retailers.

According to data as of 31 July 2024, the Vanguard 500 Index Fund is invested in military contractors above the threshold of 2.5% and below the threshold of 4%. The fund's largest holdings in military weapon companies include Honeywell International Inc. and Lockheed Martin Corp.

In addition to its investments in weapons manufacturers, the Vanguard 500 Index Fund also has investments in coal, oil, and natural gas energy companies, deforestation-risk agricultural commodities, prison operators, tobacco and e-cigarette manufacturers, and entertainment companies that promote tobacco use.

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 Vanguard 500 Index Fund's investments in weapons and firearms have earned it a D grade, indicating that investors seeking to align their investments with their values may wish to consider alternative options.

For individuals looking to make a change and move their money, there are options to find socially responsible funds that are weapon-free. Additionally, individuals can ask their employers about adding weapon-free options to their retirement plans.

Vanguard Total Stock Market Index Fund

The Vanguard Total Stock Market Index Fund is an open-end mutual fund that has investments in civilian firearm manufacturers and military weapon contractors. The fund is invested in civilian firearm manufacturers above the threshold of 0.1% and below 0.4%. It receives a grade of D for its investments in civilian firearms. The fund's largest investments in gun manufacturers and retailers include Northrop Grumman Corp, Dick's Sporting Goods Inc, and Academy Sports and Outdoors Inc Ordinary Shares.

The Vanguard Total Stock Market Index Fund also has investments in military contractors, with exposure above 2.5% and below 4%. It receives a grade of D for these investments. The fund's largest investments in military contractors include Honeywell International Inc and Lockheed Martin Corp. These companies are involved in the manufacturing and servicing of nuclear armaments and delivery systems, as well as controversial weapons such as cluster munitions, landmines, white phosphorus, and depleted uranium.

In addition to its investments in the weapons industry, the Vanguard Total Stock Market Index Fund also has investments in coal, oil, and natural gas energy companies, deforestation-risk agricultural commodities, and the prison industry, including private prison operators. The fund is also invested in tobacco and e-cigarette manufacturers and entertainment companies that promote tobacco use.

The Vanguard Total Stock Market Index Fund's performance data can be found on Morningstar.com. Investors who want to avoid supporting the weapons industry can use tools provided by Gun Free Funds and Weapon Free Funds to find sustainable and ethical investment options. These tools allow investors to align their investments with their values and support positive change in corporations.

Vanguard Total World Stock Index Fund

The Vanguard Total World Stock Index Fund is an exchange-traded fund (ETF) that has been assigned a grade of D for its investments in military weapons. The fund has investments in military contractors that exceed a threshold of 2.5% and are below a threshold of 4%.

The fund's investments include the following:

• Military contractors, including the largest international arms manufacturers and military contractors.
• Manufacturers and servicers of nuclear armaments and delivery systems.
• Manufacturers involved with cluster munitions, landmines, white phosphorus, and depleted uranium.
• Civilian firearm manufacturers and retailers, including companies that produce handguns, assault rifles, and ammunition.

In addition to weapons manufacturing, the fund also has investments in the following areas:

• Coal, oil, and natural gas energy and utility companies, as well as related financial companies.
• Companies involved in deforestation-risk agricultural commodities, along with related financial companies and consumer brands.
• Prison and borders industry, including private prison operators.
• Tobacco and e-cigarette manufacturers, as well as tobacco-promoting entertainment companies.

Vanguard Small Cap Index I

The Vanguard Small Cap Index I fund is an open-ended mutual fund with a significant exposure to the weapons manufacturing industry. According to Gun Free Funds, as of November 30, 2023, the fund has a military weapon grade of F, indicating that it is invested in military contractors above the threshold of 4%. This includes investments in the largest international arms manufacturers and military contractors, as well as companies involved with controversial weapons such as cluster munitions, landmines, white phosphorus, and depleted uranium.

The fund's largest holdings in the weapons manufacturing industry include Booz Allen Hamilton Holding Corp Class A, Howmet Aerospace Inc, Huntington Ingalls Industries Inc, and Curtiss-Wright Corp. These companies are involved in the production and servicing of military weapons, including nuclear armaments and delivery systems.

In addition to its investments in military weapons, the Vanguard Small Cap Index I fund also has exposure to civilian firearm manufacturers and retailers. This includes companies raking in billions from handgun, assault rifle, and ammunition sales, such as Dick's Sporting Goods Inc, Academy Sports and Outdoors Inc, Vista Outdoor Inc, and Sturm Ruger & Co Inc.

The fund's sustainability report card, provided by As You Sow's Invest Your Values, also highlights other areas of concern beyond weapons manufacturing. These include investments in fossil fuels, deforestation-risk agricultural commodities, prison operators, tobacco, and e-cigarette manufacturers.

Overall, the Vanguard Small Cap Index I fund has a significant exposure to the weapons manufacturing industry, with investments in both military contractors and civilian firearm companies. This information can help investors make informed decisions if they are looking to align their investments with their values and avoid supporting the weapons industry.

Vanguard Total Stock Market ETF

The Vanguard Total Stock Market ETF (VTI) is an exchange-traded fund that has been assigned a grade of D for its investments in civilian firearm manufacturers and gun retailers. The fund is invested in civilian firearm manufacturers above the threshold of 0.1% and below 0.4%. As of 31 August 2024, the Vanguard Total Stock Market ETF was 0.74% ($12.45 billion) invested in gun manufacturer and major gun retailer stocks.

Gun Free Funds provides a breakdown of the fund's exposure to each civilian firearm category. The fund's largest investments in gun manufacturers and major gun retailers include Northrop Grumman Corp, Dick's Sporting Goods Inc, and Academy Sports and Outdoors Inc Ordinary Shares.

The Vanguard Total Stock Market ETF has also been identified as one of the major funds invested in gun stocks, including American Outdoor Brands (formerly Smith & Wesson) and Sturm, Ruger & Co. However, it is important to note that the gun stocks comprise a very small fraction of the entire fund, less than 1% of the entire portfolio.

In addition to its investments in the firearms industry, the Vanguard Total Stock Market ETF has also been criticised for its investments in coal, oil, and natural gas companies, deforestation-risk agricultural commodities, prison operators, tobacco and e-cigarette manufacturers, and military arms manufacturers.

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