Photo : George Frey/Getty Images

If you’re worried about your exposure to gun stocks, Morningstar has a new report about how to find out whether your funds are invested in these companies and some things you can do about it. (And read our general piece about divesting.)




You’ll want to avoid exposure to American Outdoor Brands (AOBC), Sturm Ruger (RGR) and Vista Outdoor (VSTO), all three of which make “versions” of the AR-15, per the report. To avoid them, ask these three questions about your portfolio.

Do You Own Small-Cap Stocks?

If you own a mutual fund composed of some small-cap stocks, you may have﻿ exposure to gun stocks: all publicly traded gunmakers are all small-cap stocks, according to Morningstar.




The report found that “approximately two out of every three dollars invested in small-cap funds have exposure to guns,” spread across 264 funds. Of the big companies that produce and/or sell arms, “American Outdoor Brands is owned by 197 funds, Sturm Ruger by 252 funds, and Vista Outdoor by 234 funds.”

The funds that don’t have exposure are mostly actively managed.

How to Divest from Gun Stocks In the aftermath of another mass shooting in America, you may wonder what you can do about the gun… Read more

Do You Own Small-Cap Stocks in an Index Fund?

“If you get your small-cap exposure through an index fund, you are sure to be invested in at least one of the gunmakers and probably all three, depending on the index your fund attempts to replicate,” the report reads.


The report pulled some data on which funds have exposure. Exhibit 1 shows “the gun stock exposures of total-market and extended-market indexes with assets of more than $1 billion.”


Exhibit 2 shows “the gun stock exposures of small-cap index funds with assets of more than $1 billion.”




Do You Own an Actively Managed Small-Cap Fund?

If you have actively managed funds with exposure to small-cap funds, then you have a better chance of not being invested in gun stocks, and the only way to avoid gun stocks is through actively managed funds. “That’s because, compared with index funds, actively managed funds hold far fewer names in their portfolios, all of which a given portfolio manager believes will outperform the market,” reads the report. “With thousands of small companies from which to choose, only some managers are likely to select any of the gun stocks for their portfolios.”


You can check this list to see if your fund is invested in guns. Here are some funds not invested in gun stocks:


Again, divesting from gun stocks is not likely to change the companies’ behavior. “Given the de minimus impact on investment returns, most index investors can rest easy knowing they are not invested in guns in a material way,” reads the report. But if it’s important to you, it’s possible to do.

