What are in my investments?

Mark Bateman - April 15, 2016

Frequently, negative screening issues, often referred to as “divestment issues”, are the topics that spark the first question a client will ask about values-based investing.  In my discussions with big and small investors over the years, they often have much more clarity about the things they don’t like, than the things they do like.  Whether it’s wanting to divest from fossil fuels, or animal testing, or firearms,  they know  they don’t want it in their portfolio.

And the question investors will ask will be, “What’s my exposure?”  Or, “How much of that do I own?”  For the equity investor with a stock portfolio, with a list of companies involved in the issue, or in a fairly concentrated portfolio with just a few names to research, it can be easy to answer.  For the mutual fund investor, it’s much more difficult.  (ENSOGO Analytics can answer these questions for you.)

As a starting point, it may be helpful to think about what exposure an S&P 500 investment would have to frequent negative screening issues.  Below, I’ve used the iShares Core S&P 500 ETF (IVV) to profile such exposure.

In each case, the percentage displayed is the percentage of the investment in companies involved in the issue area.

Adult Entertainment                      12.5%

Companies with involvement in the production or distribution of adult-themed media (including print, movie, and television), sexually explicit internet operations, adult software and video games (including those rated mature and adult only), and sexually explicit live performances.

Alcohol                                                 17.1%

Companies with involvement in the manufacturing, branding, or distribution of alcoholic products for consumption; suppliers making consumable ingredients and non-consumable products for the alcohol industry; and companies involved in the retail sale of alcohol.

Animal Testing                                  13.2%

Companies with animal testing facilities as identified by the U.S. Department of Agriculture or People for the Ethical Treatment of Animals (PETA) that conduct pharmaceutical or non-pharmaceutical testing.

Firearms                                              0.8%

Companies with involvement in the manufacture of firearms or ammunition for non-military markets, as well as companies that engage in the retail sale of firearms or ammunition.

Fossil Fuels                                         5.9%

Companies within oil and coal industries according to industry classification information, including exploration, drilling, production, refining, drilling services and equipment, and mining.

Gambling                                             2.0%

Companies with involvement in the operation of gaming operations, the manufacture of gaming equipment, or the operation of online gaming services.

Military Weapons                            3.8%

Companies with involvement in the manufacture of conventional weapons (including full weapons systems, landmines, and cluster munitions) and nuclear weapons (including weapons systems) for military markets.

Nuclear Power                                  4.0%

Companies that are owners and operators of active nuclear power plants, as well as plants currently undergoing decommissioning.

Predatory Lending                           3.7%

Companies that offer predatory financial services in the marketplace, including high interest short-term loans, fee check cashing services, and pawn brokering.

Tobacco                                               8.7%

Companies with involvement in the manufacture, branding, or distribution of tobacco products, as well as suppliers of non-tobacco components intended primarily for use in the tobacco industry, and retail sellers of tobacco products.


Investors may find it helpful to understand what a benchmark index like the S&P 500 has as a basis for thinking about their own investments.  These issues offer a start to a conversation that may deepen their understanding and comfort in their own investments, as well as offering you as their advisor a better understanding of what’s important to them.