Weekly Observations for 3/9/2018 — Guns and Portfolios

Following the horrific school shooting in Florida a couple of weeks ago, I’ve received a number of calls and emails from clients inquiring about our investment position in gun producers. So I thought I’d address this topic in today’s observations.

—  On gun producers, the short answer is that we do not have any exposure to gun producers in any of our investment strategies. But I will admit that this is somewhat by chance since I have not historically screened out these stocks specifically, except in our Socially Responsible (SR) strategies. Regardless, it felt good to give concerned clients this answer.

—  I manage an “SR” version of each of our investment strategies for clients that request the use of social responsibility screens for their portfolios. But recently, clients are increasingly asking that we avoid certain types of investments, even if they haven’t opted for the broad “socially responsible” version of our work.

—  I am making a couple of observations, prompted by all of your inquiries these past weeks. First, socially responsible investing is moving from a small subset of portfolios to becoming a priority for an increasingly large number of investors. Second, I launched the “SR” versions of our strategies back in 2014, backed by research demonstrating that applying social responsibility screens to a stock portfolio not only doesn’t hurt performance, it can actually enhance performance. The long-term thinking required in “doing the right thing”, incidentally, leads to better outcomes for shareholders — no surprise!

—  Looking forward, I will be evaluating a merger of the standard and socially responsible versions of our various investment strategies, seeking a unified approach as a firm that invests responsibly and simultaneously seeks the best outcomes as investors, neighbors, community members, people of faith, and caretakers.

What do you think? Is the concept of social responsibility expressed through investment something you’ve thought about? What aspects are important to you — social issues, environmental matters, equality, governance, faith-based, or other issues? I would love to know your thoughts and feedback as we continue to develop and refine this aspect of our portfolios.