Market Extra: Some Sturm Ruger shareholders are seeking a ‘human rights impact assessment’ of the gun maker. Does your ETF hold the stock?

0
15

Sturm, Ruger & Co., a gun maker whose institutional shareholders include BlackRock and Vanguard Group, will host its annual meeting next week at which it faces a shareholder proposal to require a “human rights impact assessment.”

The proposal, calling for Sturm Ruger to conduct and publish a third-party review of the company’s policies, practices and products, was filed last month by a group that includes nonprofit Catholic health system CommonSpirit Health, the Episcopal Church and the School Sisters of Notre Dame Cooperative Investment Fund. According to the filing, the assessment would also produce recommendations “for improving the human rights impacts of its policies, practices and products.”

This week some Sturm Ruger shareholders reiterated their call for fellow investors to support the proposal “as our nation once again tries to process the unimaginable — a massacre at an elementary school” where 19 children, many under the age of 10, and two adults were gunned down by an 18-year old man, the Interfaith Center on Corporate Responsibility announced May 25. That was the day after the mass shooting at the elementary school in Uvalde, Texas.

The ICCR is a coalition of about 300 shareholder advocacy groups, including CommonSpirit Health.

Asset management giants BlackRock and Vanguard are Sturm Ruger’s top two institutional shareholders, and both firms have exchange-traded funds that hold shares of the gun maker, according to FactSet.

Neither BlackRock nor Vanguard would say whether they support the shareholder proposal for a human rights impact assessment.

“As a policy, we don’t preview our proxy voting decisions,” a spokesperson for BlackRock said in an email Friday. A spokesperson for Vanguard Group said Friday in an email that, “as a matter of company policy, Vanguard does not comment on the portfolio companies our funds invest in, nor do we signal our votes ahead of any shareholder meeting.” 

The iShares Core S&P Small Cap ETF IJR, +2.33%, the iShares Russell 2000 ETF IWM, +2.69% and iShares U.S. Aerospace & Defense ETF ITA, +2.09% held shares of Sturm Ruger as recently as May 26, BlackRock’s website shows. Fund data on Vanguard’s website show the Vanguard Total Stock Market ETF VTI, +2.53% and the Vanguard Small-Cap Value ETF VBR, +2.07% each owned the gun maker’s stock at the end of April.

The human rights impact assessment proposal is supported by proxy advisories ISS and Glass Lewis, the ICCR, said in its announcement. Sturm Ruger’s board has recommended voting against the proposal, according to its proxy statement.

Sturm Ruger has “led the industry on gun safety initiatives and has demonstrated a deep respect for human rights, which renders the proposal unnecessary,” the gun maker says in the document. “The outcome that proponents advocate and actually seek will harm the company, destroy shareholder value, and undermine the Second Amendment rights of the company’s customers.”

Sturm Ruger chief executive officer Christopher Killoy could not be reached by phone and did not respond to an email Friday seeking additional comment on the gun maker’s position on the proposal.

The U.S. has seen more than 200 mass shootings this year, according to the ICCR’s announcement, which cited the Gun Violence Archive. “Gun violence is now the leading cause of death for children and teens in our country,” the ICCR said.

Earlier this month a gunman opened fire with a rifle at a supermarket in a predominantly Black neighborhood in Buffalo, New York, a mass shooting described by police as racially motivated, according to the Associated Press. In April, a mass shooter opened fire in a Brooklyn subway.

Sturm Ruger’s annual stockholder meeting will be held virtually on June 1. Shares of the company RGR, -0.15% slipped a bit more than 0.1% Friday and gained about 5.1% for the week, FactSet data show.

Vanguard and BlackRock are also top institutional shareholders of gun maker Smith & Wesson Brands Inc., according to FactSet.

The iShares Russell 2000 ETF and iShares U.S. Aerospace & Defense ETF held shares of the company on May 26, fund data on BlackRock’s website show. Holdings of the Vanguard Total Stock Market ETF and the Vanguard Small-Cap Value ETF included Smith & Wesson shares at the end of April, according to data on Vanguard’s website.

Shares of Smith & Wesson SWBI, +0.53% rose 0.5% Friday, bringing their weekly gain to 8.6%, FactSet data show.

Both Sturm Ruger and Smith & Wesson are part of the Russell 2000 index RUT, which consists of U.S. small-cap companies, according to a membership list from a FTSE Russell report dated June 28, 2021.

Read: Sturm Ruger, Smith & Wesson, three more gunmakers are subject of House probe

BlackRock also has ETFs focused on environmental, social and governance criteria that exclude civilian firearm companies.

As part of their index screening, the iShares ESG Aware MSCI USA ETF ESGU, +2.54% and the iShares ESG Aware MSCI USA Small-cap ETF ESML, +2.39% each exclude companies involved with “controversial weapons” as well as “producers and retailers of civilian firearms,” according to their prospectuses.

Shares of the iShares ESG Aware MSCI USA Small-cap ETF have dropped 13% this year through Friday, faring better than the iShares Russell 2000 ETF’s drop of almost 16%.

This article was originally published by Marketwatch.com. Read the original article here.

Previous articleApple is a standout as 29 of 30 components contribute to Dow’s 300-point advance
Next articleImmersion files complaint against Meta, alleging patent infringement

LEAVE A REPLY

Please enter your comment!
Please enter your name here