Clients Want Out of Gun-Related Stocks? Here's Some Advice

News August 09, 2019 at 04:52 PM
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The horror of the last week, with three mass shootings in eight days in the United States, has woken many investors to wonder about what's in their portfolio. Do they own companies that manufacture or sell guns and ammunition?

"Since Parkland [Stoneman Douglas High School, where 17 people were killed in a shooting on Feb. 14, 2018], we've had more advisors asking about how to find gun stocks in portfolios, because it's not easy to ferret them out, and look for alternatives," Jon Hale, global head of sustainable research at Morningstar, told ThinkAdvisor. "[It's one reason] why environmental, social and governance funds keep building [assets] quarter after quarter."

In a recent Morningstar paper, Gun Stocks in Fund Portfolios, Revisited, Hale explained how much gun-stock exposure investors may have through index investing. He dissected small-cap indexes to determine how to "take action to mitigate that exposure or eliminate it altogether."

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