For example, Vanguard is the biggest manager of index funds, and its $5.4 billion Small-Cap Index Fund (NAESX) is the largest fund owner of Smith & Wesson shares, according to Morningstar.

The fund, a common investment option in 401(k) plans, recently held 1.6 percent of Smith & Wesson’s outstanding shares. But that stock made up just 0.04 percent of the fund’s total assets, because the fund owns more than 1,000 stocks in the small-company index that it tracks.

In fact, with $2 trillion in assets, Vanguard owns stakes in nearly every publicly traded U.S. company. That’s also the case with other large fund companies offering index funds that own hundreds or even thousands of stocks. The more broadly diversified a fund is, the greater the likelihood you’ll find something in the portfolio that you dislike.

AVOIDING GUN STOCKS

So how might an investor avoid any links to gun makers in a portfolio?

If you prefer low-cost index investing but don’t want to invest in guns, choose funds that track large-company indexes. Smith & Wesson and Sturm Ruger aren’t big enough to be included in those large-cap indexes.

If you want active management, check the fund’s latest holdings online for any gun stocks. Chances are small that you’ll find any, but be aware that the manager could invest in them at some point, unless the fund has a specific mandate to avoid gun makers.

Or, better yet, invest in funds that explicitly avoid certain stocks based on moral criteria. Some larger fund companies, including Vanguard, offer funds that seek to invest based on social objectives. And dozens of smaller companies specialize in socially responsible investing, offering funds that screen out everything from gun- and tobacco-related stocks to companies that charge interest on loans. There are also lower-cost funds that track indexes of stocks limited to those deemed socially responsible.

If you’re a 401(k) investor and find that your plan doesn’t offer such options, ask your employer to consider adding them.

In the end, know that most mutual funds won’t make distinctions between which kinds of investments serve a greater moral good and which don’t.