In response to the increased frequency of violent mass shootings, some are beginning to question investments associated with gun manufacturers. With socially responsible ETFs, investors may find a way to invest conscientiously.
“Investors have many choices now to make a positive impact on society and to align their investment with their personal values,” Linda Zhang, chief executive of Purview Investments, which offers ESG ETF managed portfolios, told Bloomberg. “The time is really to act now, there are no excuses not to if you strongly believe in these principles.”
For instance, the iShares MSCI KLD 400 Social ETF (NYSEArca: DSI) is one of the oldest and largest socially responsible ETF themed investments out there. The ETF explicitly avoids companies involved in “civilian firearms.”
“Investors have the choice,” said Martin Kremenstein, head of ETFs at Nuveen, which runs eight ESG funds, all of which exclude companies that earn 50% of their revenue, or more than $100 million, selling civilian firearms. “They have enough opportunity to buy the product out there. If there’s something they care about, they can make that decision.”
Investors can fill out their equity portfolio with Nuveen’s U.S. ESG-related ETFs, such as the NuShares ESG Large-Cap Value ETF (BATS: NULV), NuShares ESG Large-Cap Growth ETF (BATS: NULG), NuShares ESG Mid-Cap Value ETF (BATS: NUMV), NuShares ESG Mid-Cap Growth ETF (BATS: NUMG) and NuShares ESG Small-Cap ETF (BATS: NUSC), among others, which screen companies of various market capitalization and asset categories for environmental, social and governance principles.
These types of socially responsible or ESG-reated ETF themes all include some kind of screen that specifically avoid companies with controversial practices or industries that may cause significant social harm, such as gun manufacturers.
However, investors don’t seem to be biting. According to Bloomberg data, since 17 people were gunned down in America’s latest mass killing, just $82 million of the $22 billion that’s flowed into ETFs went to the 50 or so products that put money to work in accordance with environmental, social and governance or ESG principles. The amount of inflows is less than what these funds absorbed in the week immediately preceding the atrocity.
For more information on socially responsible investments, visit our socially responsible ETFs category.