Here's a statement of the obvious: The opinions expressed here are those of the participants, not those of the Mutual Fund Observer. We cannot vouch for the accuracy or appropriateness of any of it, though we do encourage civility and good humor.
"The monolithic media regurgitates everything he says."
Odd, I scan a lot of the "monolithic" media, and have never seen that picture before. Nor actually seen much coverage concerning David Hogg other than that generated by the Ingraham/Fox slander, and the actions springing from that. Ingraham shot off her loud mouth one time too many, and got pulled up short for that. About time someone had the balls to do that.
@Maurice I don't have to agree with his views about Vanguard and BlackRock to recognize that comparing him to Mussolini for having them is asinine and insulting.
All the talk about banning guns just make some people go buy more guns. I say buy Vanguard and Blackrock if we want to make money and not a political statement. Banning guns is not the answer to the violence in my opinion. Once the guns are gone then it will be something else that will be targeted to take away. If people are so concerned for the safety of children then why do we put up with abortion.
In a perhaps vain attempt to ignore all the ad hominem nonsense here, the reason why Blackrock and Vanguard are two of the largest owners of some gun manufacturers is simply that these are two of the largest index fund management companies. This was spelled out clearly in a part of the article that Maurice did not quote.
So if one takes Hogg's well intentioned but financially naive suggestion to heart, one must either not invest in index funds, or simply not invest in index funds from large companies. Rather than invest in IVV (ER 0.04%, AUM $143B) or VFIAX (ER 0.04% AUM $400B), you could invest in MSPIX (ER 0.33%, AUM $1.3B). Because of course Mainstay is so much smaller that you won't have nearly as much invested in guns for each investment dollar in their S&P 500 index fund. Oh, wait ...
As far as mainstream media are concerned, it's sad to see how far Alexander Hamilton's paper has sunk. This isn't anything new. Perhaps prescient, Billy Joel marginalized the NY Post in 1976, appreciating only "the give and take [of] the New York Times and the Daily News."
OJ might appreciate the fact that the article itself originated in Marketwatch, a site that I agree also had better days as cbs.marketwatch.com. The image, though decontextualized, is legit.
Thanks @Maurice for posting this topic. I usually get into trouble when I address one of these - but I’ll try.
Agree with the financial logic several have voiced. Especially as it pertains to index funds. On the other hand I think Hogg and his fellow classmates have every right to pursue this if they think they’re making a larger point (to the public). Call it overkill if you like. Although they won’t impact the gun industry in the way they hope to, they may help shape public opinion more in their direction through this boisterous (and some would say unreasonable) advocacy. I assume the people who run Blackrock and Vanguard are pretty bright and influential folks. I’ll further assume they care dearly about their public perception. So in the end they may be able to assist Hogg in his cause - even if not in exactly the way he hopes for.
My Lord, what an articulate, bright, and highly motivated group of teenagers we’ve seen emerge from this tragedy. I’ll forgive them any excesses - not being the one personally who had a semi-automatic weapon pointed at my head, or who lost a bunch of classmates. Wish I’d been half as capable at 17 or 18 as these kids are. And I wish all our schools in America were as good as this one appears to be. I don’t know much about it. Correct me if I’m wrong. But I get the sense this is a pretty educated and affluent populace that has taken more interest in developing a really great educational opportunity for their kids than average.
We invest to make money. Is money the MOST important thing in the world? Seems to me that question cuts to the heart of all of this. And pardon me, because I'm as guilty as the next guy for "going along to get along," particularly re: investing. It would be damn difficult to invest AT ALL if we insisted that every destination for our money were squeaky-clean. There are SO many ethical considerations. But we tend to look past most of it or all of it--- don't we? We take it all for granted, because this is just how the world works, eh?
Why the call for a "gun boycott" of Blackrock and Vanguard? It was stated above: they are the two biggest investors in those gun companies which were mentioned. Size matters. Money talks. A boycott needs to be declared publicly, or else it would be kind of silly. If something's being done as a protest, that needs to be made known. And of course, the other glaringly obvious consideration is that gun makers have either done nothing at all, or have, I'd be willing to bet, worked WITH the NRA to keep gun laws toothless and impotent.
So, the rational, ordinary people around the country have been reacting on the heels of tragedy after tragedy involving nut-jobs with guns. This includes gun owners and those who don't own one. Congress has refused to listen. To make it a State-by-State issue at this point is a game to keep us where we're at with this infernal issue. That's a pretext.
There is a further consideration I've heard nothing about: around about the time of the late '70s and early '80s, mental hospitals were emptied out in order to "mainstream" inmates/residents. Why the hell do ya think so many nutjobs are out and about, running around and shooting up schools and post offices and everywhere else??? I think that locking someone away in a mental hospital for life would be terribly wrong, if that were to be the goal. But if someone needs to be kept away from the rest of us for a short or longer period, then... to quote the Beatles, "let it be!"
*Edited to add: the bifurcation between economic issues and ethical living is a false dichotomy. I can't think of anything more connected to upright living than the way we use money, or the way tax money is used in our names. This includes the tax code itself. And right now, it's an abomination.
"Why the call for a "gun boycott" of Blackrock and Vanguard? It was stated above: they are the two biggest investors in those gun companies which were mentioned."
I understand the desire for a Howard Beale moment (we're mad as hell and we're not going to take this any more). But what action by these companies are you trying to drive? If I have a single $1M investment in VTFSX (Vanguard FTSE Social Index - excludes weapons stocks) and no other Vanguard funds, what's the message I'm sending when I sell this?
A little discussion about mutual fund structure in general might be helpful here. When one reads financial statements saying that Blackrock Inc. or The Vanguard Group owns so much of of AOBC, that doesn't mean they actually own the stock. The stock is owned not by the management companies but by the mutual funds. What is being reported as ownership is simply control. Perhaps a distinction without a difference, but we should understand what's going on here. From NASDAQ: "institutional holdings summary data encompasses the holdings ... from 13F filings." These filings report securities over which the mutual fund manager "exercises investment discretion". (SEC Form 13F FAQ)
With this in mind, do these ownership figures mean what you think:
- Do these managers really exercise discretion, or is that discretion vested more in the S&P Investment Committee that decides what goes into its indexes (should S&P be boycotted additionally or instead)?
- Should you be just selling funds that actually own the gun companies, or how wide a net should you cast (and does that dilute the message)?
- VPMCX is managed by PRIMCAP management company; does this mean that owning this fund is okay since Vanguard exercises no discretion (and I presume its holdings are not including on Vanguard's 13F)?
- The same Blackrock team that manages iShares S&P 500 Index also manages (exercises discretion over) many funds branded by Homestead, Nationwide, State Farm, etc.; if the object is to boycott the "products" of Blackrock, should all these funds also be sold off (since their portfolios are likely also counted toward's Blackrock's ownership figures)?
Blackrock is bigger than Homestead. IVV is bigger than HSTIX. Certainly you make a bigger noise by getting more owners to sell the former than the latter. But beyond noise, the question remains: to what end? So that Blackrock and Vanguard will get out of the index fund business?
This is different from boycotting advertisers of a program. There the objective is clear - get the advertisers to pull their advertising and in doing so get the program pulled or changed. Here, I don't know what the objective is.
@Ted Let me get this straight: A kid who watched his schoolmates get murdered in front of him by a hateful idiot who should never had access to a gun is a "punk" and like "Mussolini" for fighting via perfectly legal and acceptable civil disobedience to have stricter gun control? You're behaving like an insensitive jerk. You want this thread to end. Stop saying things like that.
@Lewis: He just signed a book deal, and I'm sure a movie isn't to far away. This kid and his sister are all about themselves, and have become the left-wing media poster children. Regards, Ted
Here’s how BlackRock tried to wash its hands of the issue in a statement to CNBC last week, “As a significant provider of index-based investments, we are required to replicate the holdings of particular indices. Third-party providers determine which companies are included in these indices.”
That’s a total cop-out and not even completely true. First, nowhere in the typical index-fund prospectus does it say a fund is required to replicate exactly the holdings of an index. In fact, most small-cap index funds use sampling techniques and do not invest in every company in the indexes they are tracking.
Second, to make its intentions all the more explicit, a BlackRock or a Vanguard could simply send a notice to shareholders that they are no longer investing in gun stocks in their index portfolios. Because of the sophisticated optimization techniques that passive managers already use, this would have no impact on the risk-return characteristics of the funds. Third, as some of the world’s largest asset managers, fund companies could require their third-party index providers to remove gun stocks.
If the fund companies refuse to divest for these (supposedly) technical reasons, they still cannot avoid the issue because there is something else they can do that could be more effective than divestment. As major shareholders, they can actively engage with the gun companies urging them to stop standing in the way of the consideration of common-sense gun regulations, to stop making certain types of guns, ammunition, and accessories, and to tighten its distribution oversight to ensure that retailers selling its products follow background checks and other applicable regulations.
I tend to agree with the thrust of what Hale wrote, but I think he overstated and may have even misstated his case.
I'm most in agreement about engagement. Fund companies (Vanguard in particular) have been slow to press businesses to improve their practices (e.g. producing safer products). Pressuring funds to push the companies they own would be good. Unfortunately, "more engagement" is not a message I hear in a blunt call to boycott.
Hale writes about "typical" index funds prospectuses. But Vanguard and Blackrock are not typical - that's the whole point of targeting them. He might have argued that since many index funds track by sampling, "surely" these giants could do the same (if they're not doing so already, a question he glossed over here). He'd have to address whether size matters, but at least that reasoning would be on the right path.
"Because of the sophisticated optimization techniques that passive managers already use, this would have no impact on the risk-return characteristics of the funds."
Curious, given that Hale has "said academic research has shown that stock exclusion tends to be a negative factor in performance" in contrast to using ESG screens. How do those sophisticated techniques recover the lost performance resulting from negative screening without simultaneously increasing risk?
---
There's another point to be made about ownership as it relates to engaging companies. It's the true owner that engages the company, that votes the proxies. It's not the company that manages the fund doing these things. So if one wants to press the company that controls the votes (as opposed to the company that decides what to buy), perhaps one really does divest of funds like VFTSX. Perhaps one does boycott Blackrock products, by not investing in its newly gun-free ESG funds.
Talk about shooting oneself in the foot. And without even using a gun
In Internet slang, a troll (/troʊl, trɒl/) is a person who sows discord on the Internet by starting quarrels or upsetting people, by posting inflammatory,[1] extraneous, or off-topic messages in an online community (such as a newsgroup, forum, chat room, or blog) with the intent of provoking readers into an emotional response[2] or of otherwise disrupting normal, on-topic discussion,[3] often for the troll's amusement.
@Maurice I think it is a relevant topic but you are Intentionally "provoking readers into an emotional response" by demanding public commitments to boycott from board members and comparing the lead activist in this campaign to a fascist dictator. That most certainly is troll-like behavior. In other words, your inflammatory comments are a distraction from a potentially interesting discussion.
I wish there was a concrete gesture that I could make to demonstrate my concern about gun violence. What I have in mind is what Dick's Sporting Goods has announced: they previously said they'd stop selling guns, then more recently said they'd destroy the guns that were in stock. I can't find the equivalent gesture to make with respect to my portfolio. Once I wrote to a fund manager to protest his ownership of a company that manufactures highway guardrails and which was reported to be acting in a way contrary to the safety of the driving public. I got no answer. To be truthful, I don't comb through my funds' holdings in search of objectionable companies; it would take too long and my protest would probably be fruitless.
Comments
Mussolini was human/ Hogg is human.
Mussolini was male/ Hogg is male
Mussolini had two arms and legs/Hogg has two arms and legs.
Therefore Hogg is like Mussolini. Makes about as much sense.
Odd, I scan a lot of the "monolithic" media, and have never seen that picture before. Nor actually seen much coverage concerning David Hogg other than that generated by the Ingraham/Fox slander, and the actions springing from that. Ingraham shot off her loud mouth one time too many, and got pulled up short for that. About time someone had the balls to do that.
So if one takes Hogg's well intentioned but financially naive suggestion to heart, one must either not invest in index funds, or simply not invest in index funds from large companies. Rather than invest in IVV (ER 0.04%, AUM $143B) or VFIAX (ER 0.04% AUM $400B), you could invest in MSPIX (ER 0.33%, AUM $1.3B). Because of course Mainstay is so much smaller that you won't have nearly as much invested in guns for each investment dollar in their S&P 500 index fund. Oh, wait ...
As far as mainstream media are concerned, it's sad to see how far Alexander Hamilton's paper has sunk. This isn't anything new. Perhaps prescient, Billy Joel marginalized the NY Post in 1976, appreciating only "the give and take [of] the New York Times and the Daily News."
OJ might appreciate the fact that the article itself originated in Marketwatch, a site that I agree also had better days as cbs.marketwatch.com. The image, though decontextualized, is legit.
Agree with the financial logic several have voiced. Especially as it pertains to index funds. On the other hand I think Hogg and his fellow classmates have every right to pursue this if they think they’re making a larger point (to the public). Call it overkill if you like. Although they won’t impact the gun industry in the way they hope to, they may help shape public opinion more in their direction through this boisterous (and some would say unreasonable) advocacy. I assume the people who run Blackrock and Vanguard are pretty bright and influential folks. I’ll further assume they care dearly about their public perception. So in the end they may be able to assist Hogg in his cause - even if not in exactly the way he hopes for.
My Lord, what an articulate, bright, and highly motivated group of teenagers we’ve seen emerge from this tragedy. I’ll forgive them any excesses - not being the one personally who had a semi-automatic weapon pointed at my head, or who lost a bunch of classmates. Wish I’d been half as capable at 17 or 18 as these kids are. And I wish all our schools in America were as good as this one appears to be. I don’t know much about it. Correct me if I’m wrong. But I get the sense this is a pretty educated and affluent populace that has taken more interest in developing a really great educational opportunity for their kids than average.
Why the call for a "gun boycott" of Blackrock and Vanguard? It was stated above: they are the two biggest investors in those gun companies which were mentioned. Size matters. Money talks. A boycott needs to be declared publicly, or else it would be kind of silly. If something's being done as a protest, that needs to be made known. And of course, the other glaringly obvious consideration is that gun makers have either done nothing at all, or have, I'd be willing to bet, worked WITH the NRA to keep gun laws toothless and impotent.
So, the rational, ordinary people around the country have been reacting on the heels of tragedy after tragedy involving nut-jobs with guns. This includes gun owners and those who don't own one. Congress has refused to listen. To make it a State-by-State issue at this point is a game to keep us where we're at with this infernal issue. That's a pretext.
There is a further consideration I've heard nothing about: around about the time of the late '70s and early '80s, mental hospitals were emptied out in order to "mainstream" inmates/residents. Why the hell do ya think so many nutjobs are out and about, running around and shooting up schools and post offices and everywhere else??? I think that locking someone away in a mental hospital for life would be terribly wrong, if that were to be the goal. But if someone needs to be kept away from the rest of us for a short or longer period, then... to quote the Beatles, "let it be!"
Ya can't make love to your money. Or if ya do, ya certainly need some help. Money is a tool, not a goal, agreed? Edward Arlington Robinson understood that:
https://www.poetryfoundation.org/poems/44982/richard-cory
*Edited to add: the bifurcation between economic issues and ethical living is a false dichotomy. I can't think of anything more connected to upright living than the way we use money, or the way tax money is used in our names. This includes the tax code itself. And right now, it's an abomination.
http://thefederalist.com/2018/03/01/take-two-weeks-truth-emerge-parkland-students-astroturfing/
I understand the desire for a Howard Beale moment (we're mad as hell and we're not going to take this any more). But what action by these companies are you trying to drive? If I have a single $1M investment in VTFSX (Vanguard FTSE Social Index - excludes weapons stocks) and no other Vanguard funds, what's the message I'm sending when I sell this?
A little discussion about mutual fund structure in general might be helpful here. When one reads financial statements saying that Blackrock Inc. or The Vanguard Group owns so much of of AOBC, that doesn't mean they actually own the stock. The stock is owned not by the management companies but by the mutual funds. What is being reported as ownership is simply control. Perhaps a distinction without a difference, but we should understand what's going on here.
From NASDAQ: "institutional holdings summary data encompasses the holdings ... from 13F filings." These filings report securities over which the mutual fund manager "exercises investment discretion". (SEC Form 13F FAQ)
With this in mind, do these ownership figures mean what you think:
- Do these managers really exercise discretion, or is that discretion vested more in the S&P Investment Committee that decides what goes into its indexes (should S&P be boycotted additionally or instead)?
- Should you be just selling funds that actually own the gun companies, or how wide a net should you cast (and does that dilute the message)?
- VPMCX is managed by PRIMCAP management company; does this mean that owning this fund is okay since Vanguard exercises no discretion (and I presume its holdings are not including on Vanguard's 13F)?
- The same Blackrock team that manages iShares S&P 500 Index also manages (exercises discretion over) many funds branded by Homestead, Nationwide, State Farm, etc.; if the object is to boycott the "products" of Blackrock, should all these funds also be sold off (since their portfolios are likely also counted toward's Blackrock's ownership figures)?
Blackrock is bigger than Homestead. IVV is bigger than HSTIX. Certainly you make a bigger noise by getting more owners to sell the former than the latter. But beyond noise, the question remains: to what end? So that Blackrock and Vanguard will get out of the index fund business?
This is different from boycotting advertisers of a program. There the objective is clear - get the advertisers to pull their advertising and in doing so get the program pulled or changed. Here, I don't know what the objective is.
Regards,
Ted
Regards,
Ted
https://google.com/search?source=hp&ei=PqnYWtXGJcKB5wKN-rv4AQ&q=laura+ingraham+book&oq=laura+ingraham+book&gs_l=psy-ab.3..0l5.960.11376.0.11596.28.19.3.5.5.0.230.1962.11j6j1.18.0....0...1c.1.64.psy-ab..2.26.2068.0..46j0i131k1j0i46k1j0i131i46k1j46i131k1j0i10k1j33i160k1.0.vYntPObKS_8
https://medium.com/the-esg-advisor/mutual-funds-that-own-gun-stocks-need-to-divest-or-engage-2196647257d7
An excerpt from Hale's article:
I'm most in agreement about engagement. Fund companies (Vanguard in particular) have been slow to press businesses to improve their practices (e.g. producing safer products). Pressuring funds to push the companies they own would be good. Unfortunately, "more engagement" is not a message I hear in a blunt call to boycott.
Hale writes about "typical" index funds prospectuses. But Vanguard and Blackrock are not typical - that's the whole point of targeting them. He might have argued that since many index funds track by sampling, "surely" these giants could do the same (if they're not doing so already, a question he glossed over here). He'd have to address whether size matters, but at least that reasoning would be on the right path.
"Because of the sophisticated optimization techniques that passive managers already use, this would have no impact on the risk-return characteristics of the funds."
Curious, given that Hale has "said academic research has shown that stock exclusion tends to be a negative factor in performance" in contrast to using ESG screens. How do those sophisticated techniques recover the lost performance resulting from negative screening without simultaneously increasing risk?
---
There's another point to be made about ownership as it relates to engaging companies. It's the true owner that engages the company, that votes the proxies. It's not the company that manages the fund doing these things. So if one wants to press the company that controls the votes (as opposed to the company that decides what to buy), perhaps one really does divest of funds like VFTSX. Perhaps one does boycott Blackrock products, by not investing in its newly gun-free ESG funds.
Talk about shooting oneself in the foot. And without even using a gun
Regards,
Ted
https://en.wikipedia.org/wiki/Internet_troll