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Sustainalytics finds a quarter of ETFs, 15% of mutual funds have firearms exposure

An estimated 24% of exchange-traded funds and 15% of mutual funds are invested in firearms companies, said a report from Sustainalytics Thursday.

In an analysis of 5,500 ETFs and 51,600 mutual funds, the ESG research firm found 24% of ETFs and 15% of mutual funds are invested in at least one of 40 public companies involved in the firearms industry. The Vanguard Total World Stock ETF, for instance, holds investments in 21 firearms companies, representing 0.55% of the fund's total 11.7 billion in assets, the report said. (The Vanguard Total World Stock ETF tracks the FTSE Global All Cap index.)

Sustainalytics also looked at ETF and mutual fund exposure to companies that make or sell assault-style weapons to civilians, and found that more than 5% of ETFs and 2% of mutual funds hold at least one of 10 companies involved in manufacturing or selling assault weapons to civilians.

Additionally, several of those companies — Sturm Ruger & Co., American Outdoor Brands Corp., Vista Outdoor Inc. and Dick's Sporting Goods Inc. — underperformed the FTSE Global All Cap index over the past three years.

The average three-year total return for the four companies was -8.2%, about 29 percentage points below the benchmark, Sustainalytics said.

Dick's removed assault-style rifles from its flagship stores after the 2012 shooting at Sandy Hook Elementary School in Newtown, Conn. After the Parkland, Fla., high school shooting on Feb. 14, the company announced it would be removing assault-style rifles from its Field and Stream stores as well.

The report is available on Sustainalytics' website.