Divesting gun stocks

Have a question about your personal investments? No matter how simple or complex, you can ask it here.
Locked
gluskap
Posts: 62
Joined: Mon Nov 13, 2017 2:07 pm

Divesting gun stocks

Post by gluskap » Wed Apr 18, 2018 6:23 pm

Lately I've been reading a lot about the movement by the Parkland student survivors and I really want to support them. One of their more outspoken leaders David Hogg has suggested a boycott of Vanguard and Black Rock which are two of the biggest investors in gun manufacturers. Now most of my investments are in Vanguard and I have no intention of leaving them. But Vanguard does have 359 out of its 388 funds that don't invest in any gun manufacturer stocks.

The Vanguard fund that I am mostly invested in is VTSAX. According to Goodbyegunstocks.com 0.45% of this fund is in gun stocks. Another fund that is similar in composition and earnings is VFTSX. VFTSX has an expense ratio of 0.25% versus the 0.05% of VTSAX. Based on last 5 years of returns though VFTSX had a higher return and higher dividends. But based on 15 year returns then VTSAX had higher returns.

Just curious as to people's thoughts on this issue. Is it worth switching? Are there any other Vanguard funds that don't invest in gun stocks that you might recommend over VFTSX?

Dominic
Posts: 203
Joined: Sat Jul 02, 2016 11:36 am

Re: Divesting gun stocks

Post by Dominic » Wed Apr 18, 2018 6:29 pm

This is 1/200th of your US stock portfolio. I wouldn't pay extra to play with such a marginal amount of my holdings.

Obviously this is a personal decision, but I don't think that 0.45% is that big of an ethical concern.

TheAncientOne
Posts: 140
Joined: Wed Jul 19, 2017 8:53 pm

Re: Divesting gun stocks

Post by TheAncientOne » Wed Apr 18, 2018 6:33 pm

If you have strong political views about not investing in a given industry or company, then don't buy index funds. You can pretty much replicate what an index fund does by picking 15 stocks at random (minus those that offend your sensibilities).

redstar
Posts: 42
Joined: Thu Jul 13, 2017 11:15 pm

Re: Divesting gun stocks

Post by redstar » Wed Apr 18, 2018 6:35 pm

I would be a supporter of socially-responsible investing, but I can't find any evidence that divestment (or impact investing for that matter) actually discourages the traits in companies they purport to. Is there research that shows a successful divestment campaign?

https://www.newyorker.com/business/curr ... tment-work

letsgobobby
Posts: 11648
Joined: Fri Sep 18, 2009 1:10 am

Re: Divesting gun stocks

Post by letsgobobby » Wed Apr 18, 2018 6:42 pm

Maybe someone will invent a gun stocks inverse index ETF.

User avatar
DanMahowny
Posts: 533
Joined: Sun Aug 06, 2017 8:25 pm

Re: Divesting gun stocks

Post by DanMahowny » Wed Apr 18, 2018 6:48 pm

I invest to make money. That's all.
Funding secured

User avatar
jhfenton
Posts: 3347
Joined: Sat Feb 07, 2015 11:17 am
Location: Ohio

Re: Divesting gun stocks

Post by jhfenton » Wed Apr 18, 2018 6:54 pm

I don't buy gun stocks to support gun manufacturers. I don't buy any stocks to support any particular companies.

I invest in broad index funds to fund our retirement and fund the things that I really want to do and support in retirement, whether that be buying guns or traveling the world learning every language I can (or almost certainly both).

Besides, I have never seen any evidence that boycotting particular stocks has any influence whatsoever on those companies business or policies.
Last edited by jhfenton on Wed Apr 18, 2018 6:55 pm, edited 1 time in total.

TN_Boy
Posts: 535
Joined: Sat Jan 17, 2009 12:51 pm

Re: Divesting gun stocks

Post by TN_Boy » Wed Apr 18, 2018 6:55 pm

TheAncientOne wrote:
Wed Apr 18, 2018 6:33 pm
If you have strong political views about not investing in a given industry or company, then don't buy index funds. You can pretty much replicate what an index fund does by picking 15 stocks at random (minus those that offend your sensibilities).
I do not think picking 15 random stocks is at all equal to having an investment in a total market index fund, or a S&P 500 fund. Could you defend that claim?

golfCaddy
Posts: 722
Joined: Wed Jan 10, 2018 10:02 pm

Re: Divesting gun stocks

Post by golfCaddy » Wed Apr 18, 2018 6:57 pm

Looking at that Web site, 0.4% is in Walmart and 0.01% is in Dick's. Both of those companies make the vast majority of their revenues and profits in non-gun sales. If you exclude those two companies, your gun exposure is only 0.05%. Then, if your portfolio is 1/3 international stocks, 1/3 domestic stocks, and 1/3 bonds, civilian gun sales might account for a couple hundredths of a percent of your portfolio's return.

02nz
Posts: 528
Joined: Wed Feb 21, 2018 3:17 pm

Re: Divesting gun stocks

Post by 02nz » Wed Apr 18, 2018 7:01 pm

I personally don't think divesting really works. It might make you feel better about not "profiting" from those companies' activities. But you're not changing their bottom line by a dime. Changing who you do business with can change that bottom line. Now of course, if you're not already buying guns then there's nothing to change. But I'd still say you're better off putting the effort toward changing the politics (difficult as that may be!) rather than trying to get rid of a minuscule portion of your portfolio.
Last edited by 02nz on Wed Apr 18, 2018 7:01 pm, edited 1 time in total.

TN_Boy
Posts: 535
Joined: Sat Jan 17, 2009 12:51 pm

Re: Divesting gun stocks

Post by TN_Boy » Wed Apr 18, 2018 7:01 pm

gluskap wrote:
Wed Apr 18, 2018 6:23 pm
Lately I've been reading a lot about the movement by the Parkland student survivors and I really want to support them. One of their more outspoken leaders David Hogg has suggested a boycott of Vanguard and Black Rock which are two of the biggest investors in gun manufacturers. Now most of my investments are in Vanguard and I have no intention of leaving them. But Vanguard does have 359 out of its 388 funds that don't invest in any gun manufacturer stocks.

The Vanguard fund that I am mostly invested in is VTSAX. According to Goodbyegunstocks.com 0.45% of this fund is in gun stocks. Another fund that is similar in composition and earnings is VFTSX. VFTSX has an expense ratio of 0.25% versus the 0.05% of VTSAX. Based on last 5 years of returns though VFTSX had a higher return and higher dividends. But based on 15 year returns then VTSAX had higher returns.

Just curious as to people's thoughts on this issue. Is it worth switching? Are there any other Vanguard funds that don't invest in gun stocks that you might recommend over VFTSX?
You might want to search for threads on socially-responsible investing -- we've had a few on this forum. I don't think the type of company being avoided matters much to the answers you'd get.

I think socially-responsible investing is likely to (slightly) damage your personal financial situation, and potentially complicate your investing life. I do not think it will affect the causes you support. If you are in favor of gun restrictions, I think you would have more impact via political activity on your part.

User avatar
LadyGeek
Site Admin
Posts: 48632
Joined: Sat Dec 20, 2008 5:34 pm
Location: Philadelphia
Contact:

Re: Divesting gun stocks

Post by LadyGeek » Wed Apr 18, 2018 7:33 pm

Several off-topic posts have been removed. This thread has run its course and is locked (controversial, political call to action). See: Non-actionable (Trolling) Topics
If readers can't do anything with the content of a topic other than argue about it, it does not belong here. Examples include:
  • US or world economic, political, tax, health care and climate policies
  • conspiracy theories of any type
  • discussions of the crimes, shortcomings or stupidity of other people, whether they be political figures, celebrities, CEOs, Fed chairmen, subprime mortgage borrowers, lottery winners, federal "bailout" recipients, poor people, rich people, etc. Of course, you are welcome to talk about the stupid financial things you have done.
We have previously removed similar discussions. This thread is left visible as a reminder of forum policy.

Please do not start another thread on this topic.
Wiki To some, the glass is half full. To others, the glass is half empty. To an engineer, it's twice the size it needs to be.

Locked