WASHINGTON, Feb 5 (Reuters) - Barack Obama might seem an unlikely investor in the firearms industry. But the U.S. president, a fierce advocate for gun regulation, has money in a pension fund that holds stock in gun and ammunition companies.

Although Obama's stake is minuscule, worth no more than $30, it reflects a much larger surge of investment.

The president is among millions of Americans buying into gun companies - often unwittingly - as mutual funds have increased such holdings to record levels, according to a Reuters analysis of institutional investment in firearms companies.

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Since Obama was elected in 2009, mutual funds have raised their stakes to about $510 million from $30 million in the nation's two largest gun manufacturers with publicly traded shares, Smith & Wesson Corp and Sturm, Ruger & Co . That means such stocks are now common in retirement and college savings plans.

The influx has helped to boost both companies' shares by more than 750 percent during the Obama presidency; each now has a market value of about $1 billion.

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12 PHOTOS Social reactions to Obama gun control speech See Gallery Obama and other gun control advocates own stock in firearms makers Thank you, @POTUS, for taking a crucial step forward on gun violence. Our next president has to build on that progress—not rip it away. -H This is a dangerous level of executive overreach, & the country will not stand for it. https://t.co/YgNrG94tjg https://t.co/eMCSSSp3Rh Presidential Candidate Bernie Sanders on President Obama's executive actions @NBCDFW https://t.co/mGllswtasI Statement from @RepKayGranger on President Obama's actions on gun control @NBCDFW https://t.co/mVTMgwmNCE Barack Obama begins crying during WhiteHouse talk referring to the 20 slaughtered 1st graders in Newtown. The tears started & wouldn't stop. I don't care who you are, where you're from, what you did, as long as you agree 1000% to Obama's brilliant and passionate gun control speech Whether you agree with his policy or not you can't deny Obama has sincere compassion. Congress should take note and learn compassion I am proud every day working for President Obama, but especially today #StopGunViolence Tears or not, Obama's gun law has zero chance of passing. This is gonna keep happening. Wonder if that's part of his frustration/fury. Wonder if Republicans will greet President Obama's executive orders on guns with #thoughtsandprayers So Obama just blamed variously the NRA, the voters, Congress, and the Constitution for gun violence. Funny, never criminals or terrorists. Cruz: "Those exec. orders are not worth the paper they're printed on bc when you live by the pen, you die by the pen & my pen has an eraser" Up Next See Gallery Discover More Like This HIDE CAPTION SHOW CAPTION of SEE ALL BACK TO SLIDE

Beyond mutual funds, such investments also are held in the portfolios of hedge funds and public pension plans, which are harder to track.

The White House declined to comment on Obama's holdings in the Illinois General Assembly's pension plan, which he earned while serving in that state's senate. The president has disclosed between $50,000 and $100,000 in the plan.

Other indirect investors in firearms companies include advocates for gun regulation in the U.S. Congress and several parents of children who attended Sandy Hook Elementary School in Connecticut - site of the 2012 massacre of 20 students and six staff members.

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Fund managers are drawn to the stocks by surging sales. Buyers are arming themselves, analysts said, in response to mass shootings and calls for tougher gun laws.

By the end of 2015, more than 150 mutual funds owned Smith & Wesson shares, up from 53 at the end of 2008, and nearly 130 held stock in Ruger, up from 52, according to data from Morningstar Inc.

It would have taken investors "minimal due diligence" to see massive profit potential in Ruger stock when Obama was first elected, said Ruger Chief Executive Mike Fifer. Shares hit a low of $4.50 the Friday after that Tuesday election; the stock was changing hands today at $61.61.

The New York Democrat could not be reached for comment.

As a federal retirement benefit, members of the U.S. Congress can participate in a Thrift Savings Plan, which offers an investment option - the S Fund - that holds stock in firearms companies.

Financial disclosures show that S Fund investors include Senator Dick Durbin of Illinois, the second-ranking Senate Democrat and a leading advocate for stricter background checks for gun buyers. Durbin disclosed an S Fund investment of about $115,000.

Durbin's office declined to comment.

Some members of Congress welcome the investment option.

"I'm just grateful the fund managers are investing in something that's making money," said Representative Kevin Cramer, a North Dakota Republican who opposes gun restrictions and has a small investment in the S fund.

'GOOD FOR BUSINESS'

For all the debate, Obama has made no progress in passing tougher gun laws. Measures such as universal background checks have withered in Congress, where the number of anti-gun control Republicans has grown.

Calls for tighter controls have been met with bursts of gun sales, according to U.S. background-check data on gun purchasers. Gun store owners attribute the extra sales to consumers who fear the president will make it harder to buy arms.

"Let's just say he's been good for business," Jack Lesher, manager of Chuck's Firearms in Atlanta, said of Obama.

Gun sales jumped again recently after the president blasted congressional inaction on gun control and vowed to use executive powers to expand background checks for buyers and bolster licensing requirements for dealers. His announcement followed yet another mass shooting, on Dec. 2 in San Bernardino, California, where a couple pledging allegiance to Islamic State killed 14 people.

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For the week that ended Dec. 20, firearms background checks - a proxy for guns sales - totaled 839,109, the second-highest week since 1998. Only the week after the Sandy Hook shootings was higher, according to the Federal Bureau of Investigation.

Vista's main factories have churned out bullets 24 hours, seven days a week for at least two years, Vista Chief Financial Officer Stephen Nolan told investors in November.

Now the industry is ready for an election-year surge.

"The politics of gun control could stay in the headlines, which we believe could lead to a record year," wrote Chris Krueger, senior research analyst at Lake Street Capital Markets, in a note to investors in January.

Ruger is boosting inventories to prepare, after learning a costly lesson going into the last presidential election. Demand peaked that year, based on the number of FBI background checks sought for new gun purchases. The surge followed Obama's re-election and the Sandy Hook shooting.

"When we went into late 2011, we got cleaned out of inventory  even though we increased production dramatically," company CEO Fifer told investors during a November conference call.

The company, he said, "probably left money on the table."

(Additional reporting by Jeff Mason in Washington. Editing by Jason Szep and Brian Thevenot)