Politicians have done little in response to the deadly Florida school shooting that left 17 dead last week. Unfortunately for gun manufacturers, BlackRock, Inc. (NYSE: BLK) says investors may be taking matters into their own hands and taking a stand with their wallets.
According to BlackRock, the firm is meeting with gun makers, such as Sturm Ruger & Company Inc (RGR) and American Outdoor Brands Corp (AOBC), to discuss how the companies plan to respond to the latest school shooting. BlackRock spokesman Ed Sweeney says the company has been contacted by investors who no longer want their money invested in companies that produce firearms.
“We are working with clients who want to exclude from their portfolios weapons manufacturers or other companies that don’t align with their values,” Sweeney said, according to CNBC.
BlackRock controls the popular iShares family of exchange-traded funds, many of which track particular stock indices. The iShares S&P 500 Index ETF (IVV), for example, tracks the Standard & Poor’s 500 index. BlackRock typically does not sell individual stocks that are included in a particular index its funds are tracking. However, with more than $1.4 trillion in assets under management, BlackRock can certainly apply pressure to individual companies to placate concerned investors.
“We will be engaging with weapons manufacturers and distributors to understand their response to recent events,” BlackRock says in a statement.
Bloomberg reported earlier this week that one Florida state pension fund for teachers currently holds more than 40,000 shares of American Outdoors stock, the company which produced the AR-15 that was used in the recent massacre.
Ironically, gun stocks tend to trade higher during times in which the industry falls under political pressure. Gun enthusiasts tend to buy more products out of fear of gun control legislation. Since Donald Trump was elected president in November 2016, Sturm Ruger stock is down 23.9 percent and American Outdoors stock is down 64.1 percent.
“A Republican-dominated government that poses no threat of enacting new gun regulation has taken much of the urgency out of gun purchases in recent months,” Wedbush Securities analysts wrote following the Las Vegas mass shooting last year.
So far, it appears…
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