NYC politicos call for divesting from gun companies:
“… Mayor Bill de Blasio and Public Advocate Letitia James have both called for further divestment of city pension funds from companies manufacturing assault weapons. “Today I call on all government pension funds in New York City and across the country to divest immediately from funds that include assault weapon manufacturers … Any private equity fund investing in these companies should stop immediately,” de Blasio said in a statement Friday …”
This strategy is going to fail for several reasons:
- Most company stock is held by institutional investors, not individuals. Mutual fund companies, banks, trusts, etc. are not interested in social issues. Their prime objective is to provide the highest rate of return for their investors. They look at corporate balance sheets not press conferences held by loudmouths pushing a political agenda.
- Any divestiture by public pension funds will be picked up by private entities interested in their bottom line.
- Individuals who directly hold shares in mutual funds which do invest in gun companies do not own sufficient shares to influence fund management either through shareholder proposal or divestiture.
- While there are some “socially responsible” funds that openly pursue an agenda, there are also funds that invest in “sin.” God bless capitalism.
- Gun stocks are going up because gun sales are going up. de Blasio and James are asking professional money managers to lose money on their investments. That raises potential ethical and legal questions for fund managers.