The school shooting in Parkland, Florida, in February is prompting some fund companies to review the exposure to civilian gunmakers in their mutual funds and exchange-traded funds (ETFs). A new study suggests that, if eliminating firearms manufacturers from various funds is the end goal, there is work to be done. A new report from Sustainalytics indicates that "24% of the world’s 5,550 ETFs and 15% of 51,600 mutual funds are invested in firearms companies" and that "70% of the 40 publicly traded companies in the firearms industry cater to the civilian market."

Institutional and retail investors are inquiring to fund managers and ETF sponsors about exposure to civilian firearm makers. Some ETF sponsors are moving swiftly in response. For example, iShares, the world's largest ETF issuer, introduced the iShares MSCI USA Small-Cap ESG Optimized ETF (ESML) earlier this month. While it is positioned as a broad environmental, social and governance (ESG) fund, the iShares MSCI USA Small-Cap ESG Optimized ETF does not hold shares of publicly traded gunmakers, many of which are classified as small-cap stocks. (See also: New iShares ETFs Will Exclude Gun Makers, Retailers.)

The Sustainalytics study focused on 40 public companies that are makers of civilian firearms, as well as retailers of those products and related fare. "Of the 40 companies in our database, six manufacturers and four retailers market assault weapons to civilian customers," according to the study. "Screening the Bloomberg universe of investable funds to identify points of investment exposure to these 10 companies, we found that more than 5% of all ETFs (299 of 5,496) and 2% of all mutual funds (1,045 of 50,127) hold at least one of these 10 companies."

In addition to BlackRock, Inc. (BLK), the parent of iShares, Vanguard is also taking a proactive approach to its funds' civilian firearms exposure. Vanguard is the second largest U.S. ETF issuer behind iShares. "Vanguard spokeswoman Carolyn Wegemann said most of its funds do not directly invest in top gunmakers, and that it has been meeting with those firms and distributors to discuss their risk-mitigation plans," reports Reuters.

The Vanguard Total World Stock Market ETF (VT), which tracks the FTSE Global All Cap Index, features exposure to 21 firearms makers or retailers, according to Sustainalytics, but those stocks combine for just 0.55% of the ETF's weight. Two major sporting goods retailers that sell guns and two U.S.-based gunmakers have lagged the FTSE Global All Cap Index over the past three years, accoding to Sustainalytics data. VT had $11.8 billion in assets under management at the end of the first quarter. (For more, see: Sen. Warren Asks Funds to Demand Gun Industry Change.)