NY Times: You Might Be Giving Gun Companies Money, Even If You Don't Own a Gun

Published February, 2018

By Landon Thomas Jr. and Stephen Grocer from New York Times

You probably are a gun owner.

You might not actually possess a gun. But if you have a pension or a 401(k) or an investment in index funds, there’s a good chance that, directly or indirectly, you own shares of one or more gun manufacturers.

Like it or not, that means that your financial incentives are at least partly aligned with those of gunmakers. And in general, the more guns they sell, the more money their shareholders — in other words, you — make.

Here is how individual investors, including people whose only investments are through their retirement plans, are financially connected to the gun industry — even if they don’t realize it.

Pension Funds
A number of state pension funds own shares in the gun makers. For example, pension funds for public employees in Florida, Texas, Wisconsin and Ohio all have stakes of less than 1 percent in American Outdoor Brands, formerly known as Smith & Wesson, which is the manufacturer of the AR-15-style semiautomatic rifle that has been used in a number of recent mass shootings.

TIAA, which oversees retirement investments for educators and teachers, has small stakes in American Outdoor Brands and two other publicly traded gun companies. The pension fund for teachers in New York State also has very small positions in the gun companies Sturm Ruger and Vista Outdoor.

The investments represent slivers of the pension funds’ overall assets, but they nonetheless are generating debate. New Jersey lawmakers last week moved to cut off investments in gunmakers by the state pension plan.

Index Funds
Exchange-traded index funds, which are designed to track the performance of various market indexes, are all the rage these days. They hold the shares of every company in whatever index they’re tracking. These indexes include the Russell 2000 index for small companies and the Standard & Poor’s Aerospace & Defense Select Industry index.

That means these investment firms own the stocks, not because they see investment value in them, but because they are part of a broad stock index.

Two of the world’s biggest asset managers, the index giants BlackRock and Vanguard, are now among the top shareholders of three publicly traded gun companies: Sturm Ruger, American Outdoor Brands and Vista Outdoor.

BlackRock has an 11 percent stake in American Outdoor Brands, while Vanguard’s stake is 8 percent. For Sturm Ruger, BlackRock owns 17 percent while Vanguard has 9.5 percent.

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