Why Public Pension Funds Are Slow to Divest From Gun Manufacturers

Gun sales in the U.S. are on track to reach a record high in 2016. After each new mass shooting comes a surge in share prices for gun manufacturers. With mass shootings now more reliable than the weather in the U.S., managers of mutual funds, hedge funds, and public pensions have invested heavily in companies that make weapons and ammunition. Soaring gun sales since 2009 make weapons companies a sound investment.

The wisdom of markets notwithstanding, many leaders have questioned the morality of investing in these companies in light of recent, severe mass shootings. Some leaders have called specifically for public and private divestment in guns and ammo manufacturers. Private funds aren’t listening: Since President Obama’s inauguration in 2009, mutual-fund investments in the top two publicly traded gun companies have grown from $30 million to more than $500 million. More than 150 mutual funds own shares in Smith & Wesson Holding Corp., according to Reuters: up three-fold since the end of 2008.