Socially responsible index funds?

[The White Coat Investor]

My wife and I can't be the only ones who are especially anxious to make sure we don't have any gun stocks in our portfolio this week... just cannot stomach having any personal connection to this industry & profiting off it. we are invested in Vanguard & Fidelity index funds and are just looking to change our total stock market funds to similar ones without the gun stocks. I looked around and it looks like Vanguard's VFTAX and Fidelity's FITLX are what we are looking for, can anyone confirm or deny? Obviously if they happen also to not contain tobacco, EtOH, or whatever else people think is equally immoral, that is fine.

Seems like it would be easier to just buy the total market and then short gun stocks. Although I have no idea why you think that will affect anything. You're probably better off just investing in an unbiased manner and then donating to charitable organizations or politicians that agree with your views.

[CordMcNally]

If weapons are a big concern then one consideration would be to look at defense contractors in the US and abroad. Lots of weapons (much bigger than handguns) are getting made and being sent to Ukraine. Remington, Daniel Defense, etc. aren't the ones making these.

[bovie]

My wife and I can't be the only ones who are especially anxious to make sure we don't have any gun stocks in our portfolio this week... just cannot stomach having any personal connection to this industry & profiting off it. we are invested in Vanguard & Fidelity index funds and are just looking to change our total stock market funds to similar ones without the gun stocks. I looked around and it looks like Vanguard's VFTAX and Fidelity's FITLX are what we are looking for, can anyone confirm or deny? Obviously if they happen also to not contain tobacco, EtOH, or whatever else people think is equally immoral, that is fine.

I would suggest separating your morals/social desires and your investing.

This will result in both more money and a larger potential impact on whatever perceived problem you want to try and fix.

Also, good luck finding a single fund that perfectly matches your morals—if there is even one stock in there that you “can’t abide,” then what’s the point?

[Random1]

It is supply and demand. For every buyer there has to be a seller and for every seller there has to be a buyer. If there are lot of sellers wanting to unload a stock but there are not enough buyers, the stock price will fall till there are sufficient buyers willing to buy at that price

This may not be necessarily true, for some one to unload a non ESG stock the person that is buying it may actually demand a premium not a discount. to buy something that others dont want to buy.

XOM which produces oil and gas, which for most is on the black list of ESG fund, dirty fossil fuels, they seem to be making alot of money now despite no one wanting to buy carbon polluting company. 31 million shares traded today, Even a few million green stock holders have no impact on the price. The price is more associated with fundamentals and forward predicted earnings.

[Lordosis]

Guns don't kill people. Apes with guns kill people!

[Hank]

There are 4 billion people in the world,

COVID-19, mass shootings, and the war in Ukraine all have been pretty bad. But we’re still up to almost 8 billion people on the face of this little blue sphere, not 4 billion.

[K82]

Of course iit is not the existence of guns, or the manufacturing of guns, that we are opposed to. That is all fine and good, weapons and war exist, it is a fact of life. It is the relentless efforts of the gun lobby to ensure that no reasonable gun control legislation will ever be passed specifically in this country to prevent the massacre of children at an elementary school. I am only responding because you asked - I did not intend this to be a political thread. I just want to know what funds to invest in. I don't to make money off of these children's deaths, end of story. I am not alone because these funds exist and actually perform just fine.

You may have to consider avoiding stock in company's that make knives as well, since they are responsible for 3X the number of homicides in the US as rifles (not all guns).

Also, you may want to consider avoiding stock in car companies, given the horrendous actions of a man running into parade goers with his car in Waukesha, WI last year. At least one child was killed in that tragic event.

Guns are not the problem, they are tools. Evil and/or mentally unstable people are the problem.

[afan]

I’m not sure not buying guns is the best answer. It’s good but basically is the status quo for many of us.

From what I hear the NRA actually supported gun control when the black panthers started forming militias.

Maybe the black panthers should come back. Also Militias of brown people carrying black flags with random Arabic letters and large rifles can ride down mainstreets every weekend.

Maybe instead of bringing rainbow flags to gay pride parades they should be bringing guns. Drag queens with guns. Big guns. Lots of them. Then march to the state legislature buildings.

I’m curious to see what would happen.

Interesting idea.

Of course, you will need to convince those people to carry guns. There is a lot of overlap with pacifists. Many would refuse to touch an instrument of violence, let alone march down the street holding one.

[PhotonsRGR8]

Long LMT XOM CVX OXY PM MO BTI DEO PENN MCD. Dumb luck but it seems to be working so far.

[Dusn]

I’m not sure not buying guns is the best answer. It’s good but basically is the status quo for many of us.

From what I hear the NRA actually supported gun control when the black panthers started forming militias.

Maybe the black panthers should come back. Also Militias of brown people carrying black flags with random Arabic letters and large rifles can ride down mainstreets every weekend.

Maybe instead of bringing rainbow flags to gay pride parades they should be bringing guns. Drag queens with guns. Big guns. Lots of them. Then march to the state legislature buildings.

I’m curious to see what would happen.

[afan]

afan
You forgot, do not vote for anyone that refuses to follow all of the steps outlined above. "Rules for thee and not for me. "

Right. One vote does not count for much, but of course support politicians who pursue your goals. One should care not at all how the politicians themselves live. Rather, what matters are the actions they take with regard to your issues.

Kamban

You are right that refusing to buy the stock of a company will have a tiny negative effect on the stock price. If lowering the stock price is the goal then boycotting the stock will have a minimal effect, lost in the noise, but in the desired direction.

Lowering the stock price will not make for fewer guns or cleaner air.

If the goal is to reduce the number of guns on the street, reduce climate change, or otherwise counteract what you believe to be harmful effects of the products, then boycott the products, not the stock.

Being a stockholder you can at least vote on shareholder resolutions. You may not have much influence but if you don't own the stock you have zero.

Lowering the stock price will not curtail lobbying. The companies could well conclude that they need to lobby more.

Just as lowering the stock price does not reduce production, reducing lobbying spending also does not reduce production.

Avoiding the stocks by holding an index fund that does not buy them but continuing to consume the products makes the situation worse.

Refusing to own the stock is popular because it is easy and makes one feel as if they have done something. In fact, it accomplishes nothing.

[xraygoggles]

If investing in funds that hold UnitedHealth Group, Amazon, and bank stocks makes you feel like you are being socially responsible, you just lost your virtue-signaling street cred.

Not to mention literally any other company on the public market - there is likely some shady biz going on in one way or another.

[Kamban]

How does someone not buying a stock, decrease the value of the company ? There are 4 billion people in the world, if someone doesn't want to buy a good company that makes money , some one else will but it and profit from it.

It is supply and demand. For every buyer there has to be a seller and for every seller there has to be a buyer. If there are lot of sellers wanting to unload a stock but there are not enough buyers, the stock price will fall till there are sufficient buyers willing to buy at that price.

Now, one buyer who does not want to buy a gun company stock won't make a difference in the stock price. But if there is a significant number like 20 or 50 million people who won't buy the stock, its demand will fall. Not all buyers are buy and hold forever investors.

It does not matter if there are 4 billion or 6 billion people in this world. The number of people who invest in stock market, especially those that include gun makers is a tiny fraction of that.

BTW, I am not taking a pro or anti gun lobby stance. I am just stating that if sufficient people don't want to buy the stock its price will fall and the company's book value will fall, even if it is doing great and earning a good income.

[Random1]

How does someone not buying a stock, decrease the value of the company ? There are 4 billion people in the world, if someone doesn't want to buy a good company that makes money , some one else will but it and profit from it. The idea that "social responsible" investors will avoid the stock in masses and drive down the price, I don't see any evidence towards this. If a gun manufacturer makes a lot of guns and profits, some one will buy it and profit from it, it just may not be the ESG investor. The ESG investor may actually lose money compared to the non ESG investor.

[Tim]

afan
You forgot, do not vote for anyone that refuses to follow all of the steps outlined above. "Rules for thee and not for me. "