Vanguard Put Gun Stocks in a Gun-Free Fund After Index Error
- Fund shop apologized to shareholders, called exposure ‘modest’
- Error raises questions about the rapid growth in ESG products
Photographer: Luke Sharrett/Bloomberg
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Vanguard Group Inc.’s biggest sustainable exchange-traded fund bought shares of gun maker Sturm Ruger & Co. Inc. and held them for more than a month, mimicking an error in the benchmark it tracks.
Vanguard US ESG Stock ETF says it tracks an index that doesn’t include weapons manufacturers, along with other companies that socially responsible investors prefer to avoid. Though the Sturm Ruger buy was temporary and small -- 219 shares worth about $9,000 -- it raises questions about the rapid growth of socially responsible investing in general and index strategies in particular.