March 1, 2018 / 3:12 PM / in 7 months

Breakingviews - Cox: How to rid your portfolio of assault weapons

NEW YORK (Reuters Breakingviews) - The day after the massacre of 17 students and teachers at Marjory Stoneman Douglas High on Feb. 14, Breakingviews published a column highlighting Wall Street’s role in supporting the companies that produce what has become the preferred weapon of American mass murderers.

The barrels and hand guards of AR-15 rifles are displayed for sale at the Guntoberfest gun show in Oaks, Pennsylvania, U.S., October 6, 2017. REUTERS/Joshua Roberts

Since then, many readers have asked how they could ensure their investment portfolios were not helping companies such as American Outdoor Brands, whose Smith & Wesson M&P15 .223 semi-automatic was used in the killing at the Florida high school, to manufacture such weapons.

Herewith, a handy tear sheet of 15 questions investors can use when confronting their brokers, mutual-fund managers, financial advisers or 401(k) providers on the matter.

1. Do I own any shares in companies that make weapons like the AR-15 semi-automatic used in the shootings at Stoneman Douglas, Sandy Hook Elementary School, Las Vegas Mandalay Bay, Sutherland Springs church or Orlando Pulse nightclub?

2. Do I own stock in Vista Outdoor, American Outdoor Brands or Sturm Ruger? 

3. Dick’s Sporting Goods said it will no longer sell assault-style rifles at any of its stores. Do I own stock in any other retailers that continue to sell such products?

4. Do I own shares of banks that help finance the manufacturers of AR-15s and other high-velocity semi-automatic weapons that are readily available to consumers?

5. Do I own shares of banks, credit-card issuers or payments processors involved in the sale of semi-automatic weapons to consumers?

6. Do I own any shares of the aforementioned through a fund that tracks a stock market index like the Russell 2000?

7. Do any of the investment funds in my portfolio own other securities, such as bonds, notes, warrants or loans to companies that produce AR-15s?

8. If the answer to any of the above questions is yes, please tell me what you are doing to ensure these companies are aligned with the best practices of corporate social responsibility.

9. If I own shares of American Outdoor Brands or Sturm Ruger in my portfolio or through an index fund, will you be voting in favor of shareholder resolutions requesting that their boards of directors issue a report by Feb. 9, 2019 on the companies’ activities related to gun-safety measures and the mitigation of harm associated with gun products? Please explain your decision. 

10. Will you be asking these companies to reconsider their investments in manufacturing tactical assault weapons or the work they do for weapons producers? Please explain your decision.

11. Will you be asking these companies to reduce their funding to the National Rifle Association given its refusal to consider legislative changes, such as a ban on high-capacity magazines and assault weapons or universal background checks, which could reduce the frequency or lethality of mass shootings in American schools, churches, cinemas and concerts? Please explain your decision.

12. Will you be asking these companies to consider investing in smart-gun technology that could reduce the incidence of suicide, accidental discharge or homicides with stolen weapons? Please explain your decision.

13. If these companies do not consider changes such as those enumerated here, will you withdraw financial support for them? Please explain your decision.

14. If the answer is “we can’t because they are part of an index that we follow,” then will you ask the compilers of those indexes to consider ejecting them or creating alternatives?

Finally, here is an extra question for use by those who count BlackRock as an investment manager:

15. Please tell me how you are ensuring that these companies make “a positive contribution to society,” in line with Chief Executive Larry Fink’s January letter to the managers of companies in which BlackRock invests. As Fink wrote, “Companies must benefit all of their stakeholders, including shareholders, employees, customers, and the communities in which they operate.” How you are making good on this promise?

Breakingviews

Reuters Breakingviews is the world's leading source of agenda-setting financial insight. As the Reuters brand for financial commentary, we dissect the big business and economic stories as they break around the world every day. A global team of about 30 correspondents in New York, London, Hong Kong and other major cities provides expert analysis in real time.


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