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Newtown Gun Backlash Hits Wall Street Via California Mega Funds

Tickers in this article: CAL DKS LO MO PM RGR SWHC WMT

CalPERS and CalSTRS are both small investors in Smith & Wesson, Sturm, Ruger, Cabela's, Dicks Sporting Goods and are large holders of Wal-Mart shares, according to Securities and Exchange filings compiled by Bloomberg, as of Sept. 30.

Both Lockyer and Duran of CalSTRS highlighted the challenge of locating investments in companies or industries prohibited by California investment policies, pointing to private equity assets such as the Freedom Group position taken by Cerberus as particularly hard to locate.

Maintaining compliance with existing bans also appears to be a challenge. According to Bloomberg data, CalPERS is currently an investor in the nation's four largest tobacco companies, Philip Morris (PM) , Altria(MO) , Lorillard(LO) and Reynolds American (RAI) . While the fund's combined stake is a negligible $5.65 million compared with $54 billion in common stock holdings, as of Sept. 30, the fund's total tobacco stake was nearly fourfold as of its Mar. 31 filings.

Pension investors may be just one set of Wall Street-tied movers in the firearm debate spawned by Friday's shooting. Decisions by Wal-Mart and Dicks Sporting Goods signal that corporations may follow suit, and it's too be seen how far support extends for a strengthened gun policy.

On Tuesday, the National Rifle Association of America said it would make "meaningful contributions to help make sure this never happens again," in reference to unspecified policy change in the wake of the shooting.

Sen. Dianne Feinstein, D-Calif, said on Tuesday she would work to revive an assault weapons ban in the 2013 congressional session.

After widely praised memorial speech on Sunday, President Barack Obama has appointed Vice President Joseph Biden Jr. to lead administration wide policy efforts to curb gun violence.

-- Written by Antoine Gara in New York