They are likely to do so.
In recent years, large asset managers like BlackRock have offered investors the opportunity to invest in alternative funds that don’t have exposure to gun stocks. This is part of a wider movement of investors who prefer to own companies with managers of environmental, social and governance (ESG) issues.
But most passive investors who put some retirement savings in targeted funds do have exposure to these companies.
If you own a small-cap index fund or an extended-market index fund, you may have some exposure to these stocks, albeit a very small one. Sturm Ruger’s weight in Russell 2000 is only 0.05%, while Smith & Wesson’s weight is 0.03%.
If you have money to invest in a target date 401(k) fund, you may also have some exposure to these stocks.
For Walmart and Dick’s Sporting Goods, gun sales account for less than 5% of total revenue, according to Morningstar Sustainalytics.
Since a mass shooting at a Walmart in El Paso, Texas, in 2019, the company has stopped selling handguns and only sells firearms for hunting. It hasn’t sold assault rifles since 2015. Customers must be at least 21 years old to purchase firearms in Walmart stores.
How to find out if you own a gun manufacturer or retailer
Is it worth stripping?
As a shareholder, can I have an influence?
BlackRock and Vanguard own large percentages of shares in the two publicly traded U.S. gun makers, which means they have a lot of sway over the company’s future. They will be able to exercise that power in a proxy vote on June 1.
Strum Ruger shareholders will vote on a proposal from CommonSpirit Health that would require the company to conduct a third-party assessment of the human rights impact of its products. The resolution is intended for the company to admit to misuse of its weapons and to “take concrete steps to remedy the adverse effects.”
Sturm Ruger recommends shareholders vote against the proposal.
“Despite the insignificant ownership of company stock, proponents are using the proxy system to advance their gun control agenda through legislation and other means,” Stroomrug wrote in a letter to shareholders.