How To Invest In Mutual Funds That Don't Invest In Gun Companies
Investing in mutual funds, rather than trying to stock-pick, has made the market much more accessible to individual investors who can’t risk having most of their eggs in one basket.
The problem with larger funds is that when you put together a large enough list of massive corporations, there’s bound to be at least a few that you don’t agree with ethically or morally, and that you’d rather not support.
If you want to participate in the markets without supporting companies who do things that you find abhorrent, there are plenty of great options, and some useful tools to help you find them.
Most Americans are in favor of common-sense gun laws and the steps it takes to get there, and some firearms companies are actively lobbying politicians to act against the will of the people. You can support the second amendment without giving money to companies that are working with lobbyists to interfere and block gun safety studies.
Choosing to invest in socially responsible funds that exclude firearms manufacturers isn’t necessarily a critique on the second amendment, it’s a critique on the companies that profit from war and lobby against peace.
3 Gun-Free Mutual Funds
You don’t need gun companies in your portfolio. You don’t have to wonder if the next mass shooting is going to use a gun made by a company you own. You don’t have to wonder if your portfolio has brands that donate to politicians in order to keep gun laws lax.
You can make your voice heard by investing in mutual funds that exclude guns.
This is one of the largest investment companies, and in turn one of the largest investors in certain gun companies. It’s only recently that they started issuing funds that exclude gun manufacturers and retailers (including Walmart and Dick’s.)
A company like this is in a unique position when it comes to issues like this, since they can have a direct impact on outcomes due to their ability to influence companies, to make recommendations, and even to vote at shareholder meetings.
In a piece posted in April of 2018, CNBC said : “BlackRock told clients it was time to take action in this debate, saying it could use its position as one of the largest owners of publicly traded gun makers to vote against directors and go against management to support shareholder initiatives.“
Just bear in mind that while they offer gun-free investing solutions, they’re still a large shareholder of gun companies in their other funds. This gives them a seat at the table to put pressure on gun companies to act more responsibly, but it also means that they’re still profiting off of weapon sales as a whole.
Blackrock runs the iShares collection of ETFs, here are a couple that don’t invest in gun companies…
iShares ESG MSCI USA ETF
This is an ETF, so it’s generally less expensive to own compared to classic mutual funds. ESG stands for environmental, social, and governance. This fund aims to track an index of US companies who meet certain standards in terms of environmental stewardship, social responsibility, and equitable governance.
At the time of writing this, their management fee is a mere 0.15%, which highlights the aforementioned benefit of choosing an ETF. Also at the time writing this, the fund holds shares in companies like Microsoft, Apple, Amazon, Facebook, Alphabet (Google), Visa, others. Microsoft is their largest holding, at just over 4% of their portfolio, but there are over 300 companies in this fund.
iShares MSCI USA Small-Cap ESG
Here’s another iShares offering from Blackrock that focuses on small-cap companies. In addition to excluding gun companies, it’s also free of investments in tobacco. This fund tracks companies with positive ESG traits, and focuses on tracking an index of small cap companies, with over 800 different holdings at the time of writing this, and each of them have a weight of well under 1% of the portfolio.
Calvert Emerging Markets Equity Fund
The first two options we looked at were comprised of US companies, so if you’re looking for international exposure, this fund from Calvert tracks ESG companies in emerging markets around the world.
China, India, Taiwan, Korea and Brazil are the countries with the largest representations in this fund, with Russia, Mexico, Peru, Egypt and Turkey rounding out the bottom with under 2% each.
This fund manages 2 billion dollars in assets, and has an expense ratio of 1.18% at the time of writing.
Checking Your Existing Holdings and Finding More OptionsHere’s a useful tool for looking over your current holdings to ensure you aren’t invested in weapons, and another useful site that you can use to research investment opportunities.
This website allows you to enter a ticker symbol, a manager’s name, or search by fund name. The search results will tell you the exposure to firearms brands in that particular fund, so you can audit your existing holdings with this site, and also use it to help with the vetting process for future investments.
This project is similar to WeaponFreeFunds.org. You can find their list of funds here, to get a list of funds that you can sort by size, how well they rate in terms of ethical investing, the strategy and style of the fund, and more. You can also filter funds based on their exposure to gun companies.
We’re outlined a few of the more popular gun free funds above, but we strongly recommend you do your own research. You can find plenty of funds with 0 exposure to weapon companies. There are more options than ever, so no matter what your investment strategy is, you don’t need to own gun stocks.
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