People have been surprised to learn that the single biggest investor in America’s gun manufacturers is investment giant Blackrock, a firm which is among the loudest voices on Wall Street in favor of social responsibility.
It turns out Blackrock owns a 16.18% position in Sturm Ruger, a 15.26% stake in Vista Outdoor, and an 8.3% position in Smith and Wesson.
None of those $597 million in shares are held in actively managed funds, according to Blackrock, but rather are passive funds in third-party indexes, where Blackrock does not decide what stocks are included.
Blackrock has long preached the Social Justice mantra, stressing the value of ESG and socially conscious capitalism, as it has lectured gunmakers on how they should do more to keep their products from being misused. After the Parkland shooting, Blackrock said, “The recent tragedy in Florida has driven home for BlackRock the terrible toll from gun violence in America. We believe that this event requires response and action from a wide range of entities across both the public and private sectors.”
However there is no evidence any of the companies they are invested in have taken any steps in response to their statements, and Blackrock seems unconcerned if they have. In 2020, Blackrock voted to reelect all seven of Smith and Wesson’s directors. Blackrock also opposed an effort by Catholic nuns to force Smith and Wesson to adopt a human rights policy, an opposition which proved crucial to killing the proposal.
It is likely no coincidence big Wall Street investors have seen the market tsunami that is civilian demand for firearms of late and entered a position to profit from it, and the fact there is little ability to pass gun control. While many would attribute the inability to get new gun control proposals passed to the NRA, or to grassroots voters, it would not be surprising to find deep pocketed Wall Street investors who are heavily invested in gun manufacture and sales (of which Blackrock is only one) would make a few calls themselves to oppose any proposal likely to diminish availability or sales of firearms. And it would not be surprising if their calls held far more sway with politicians, given their political contributions, than any call from the NRA or any independent citizen.
In fact I assume their positions were only taken up after internal research confirmed there would be no new firearms laws passed in the near future which would affect their business. And once they took their position, they added their political weight to that side, making it only more certain that gun control would remain stymied.
Indeed, if the decision makers of government ever were to decide to restrict firearms ownership in any meaningful way, I would bet the first predictive event you would see would be these companies exiting their positions en masse, months before the push to pass those laws began.
And I should make clear, this article is not taking any position on firearms ownership or the political debates over it. Rather it is designed to show you that the economic terrain, particularly that around the most wealthy and powerful investors, is one of the key forces underlying everything you see. And nobody else will point that out to you.
