How to make sure your 401(k) isn’t supporting the gun industry

These tips will make you more mindful of your investments
By Amy Wilkinson  Published on 05/08/2018 at 11:00 AM EDT

You’ve marched in solidarity with the survivors of the Parkland shooting. You’ve donated to non-profit advocacy groups, like Everytown for Gun Safety. You’ve called your congressmen and women to demand they support gun reform. Basically, you’ve done everything to help ensure #NotOneMore school joins the ranks of the more than 100 that have experienced a school shooting since Sandy Hook in 2012.

Except…have you checked your 401(k) recently? Because without knowing, you could actually be supporting firearm companies and their lobby group, the National Rifle Association (NRA), simply by socking away a few dollars every month for retirement.

Just think back to your first day on the job and the gobs of paperwork you filled out in HR. One of those slips likely asked for your 401(k) elections—what percentage of your paycheck you want diverted into a 401(k) retirement fund and which portfolio (a collection of mutual funds, which typically contain stocks, bonds, and money market investments) you want that percentage invested in. Many of these portfolios are geared toward a specific goal—such as reducing your risk as you get older—which takes a lot of the guesswork out of investing. But it can also take a lot of the mindfulness out of investing too. (Think fast: Can you name even one company’s stock in your 401(k)?) And if you don’t know what businesses you’re investing in (whether Starbucks or Smith & Wesson), you certainly don’t know what ideologies and values you’re investing in either.

So how do you go about ridding your 401(k) of firearms? First you need to decide to what extent you want to divest your portfolio. For instance, are you content with eliminating just gun manufacturers from the mix? Or would you prefer to also target big gun sellers? What about companies who take ad money from the NRA? Once you’ve figured out your comfort zone, you’ll need to do a little research (or at lot of research, as the case may be) into your portfolio. Start by logging into your account and finding your portfolio’s name (this writer’s, for instance, is “Vanguard Target 2045”). From there, you can take a few investigatory routes.

The easiest is to plug your portfolio’s name into the website Goodbye Gun Stocks, which will tell you which gun and gun-related stocks your 401(k) invests in. The results include both manufacturers (such as Ruger) and retailers (such as Cabela’s). Goodbye Gun Stocks also recommends alternate portfolios to reduce your exposure to firearms companies. The downsides are that the data is from 2016, meaning some of it may be out-of-date, and that the site analyzes only a portion of the overall portfolio’s billions of dollars. (You may get a disclaimer along the lines of “We analyzed 0.14% of this fund’s $12.04B net assets, and here’s what we know…”) For further research, the site does link to the fund’s quarterly SEC filings (but that archive can be kind of intimidating to the financial layperson).

Another (albeit, more tedious) option is to look into your fund on an investment research site, like Morningstar. You’ll have to drill down a few levels in order to get the information you want, since your fund will be made up of separate smaller funds, which will, in turn, be made up of stocks and bonds. But you should eventually land on a list of companies that compose each of those smaller funds. You can also try contacting customer service at your 401(k) provider to receive more detailed information.

A final option, according to Money magazine, is to turn your investing focus toward an ESG fund, which picks companies based on their environmental, social, and governance impact. But while socially responsible investing can have many upsides, these types of funds do charge high fees, which can really eat into your investment over time.

Whichever route you ultimately choose, you’ll likely need to weigh all the pluses and minuses before deciding what’s right for you and your 401(k).   

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