For investors, war can be profitable. A new fund seeks to capitalize on rising demand for drones and ammunition — but is the right way to boost your savings? Shalzed investigates.
I was at home doing my taxes when Shalzed rang the doorbell. I buzzed him up. “Welcome,” I said as he came in the door.
“I wanted to. . .” he began. Then he noticed that I was working at my computer and asked if I was busy.
I smiled. “Just finishing up my taxes,” I told him.
He noticed a paper on my desk. “What’s that?” he asked, wrinkling his forehead.
“It’s the fact sheet for an investment a friend of mine recommended,” I replied. “I’m going to make a contribution to my retirement fund before I file, and I need to decide what to do with it.”
Shalzed picked up the paper. “A fund for drones and modern warfare?” he asked.
I shrugged. “With the current war in Iran, along with what’s been going on in Ukraine, defense spending is sure to go up,” I told him. “And now every military needs drones.”
Shalzed looked aghast. “You want to make money by investing in companies that build robots that kill people?” he asked.
I hadn’t really thought about that before, and suddenly I felt uncertain. “It’s just an investment,” I mumbled. Then I found myself inside the familiar black tunnel, and a moment later I was standing next to Shalzed in a large executive office. A middle aged man wearing a blue suit and blue tie was sitting behind a desk, staring at his computer. A name plaque on the desk said Matthew Bielski, CEO of Defiance ETFs. Behind him, a city skyline showed through a wall of glass.
“How can you encourage people to invest in companies that make weapons?” Shalzed asked.
Bielski shook his head in surprise. “Who are you?” he asked.
“I had been thinking of investing in your drone warfare fund,” I told him. “My friend is here to learn about human rights, and he has some questions.”
“Our funds have a solid track record of outperforming the market. I believe drone technology could be Wall Street’s next big winner.”
“But do you really want to profit from making machines that kill?” Shalzed asked.
Bielski frowned. “If it wasn’t for drones, Russia would have already taken over Ukraine.”
“What if drones are used for war crimes?” Shalzed asked.
“That’s the responsibility of whoever uses them, not us,” Bielski said.
A guy in his twenties carried a stack of papers into the office. “The DRNL documents are ready for you,” he told Bielski.
“Great,” Bielski said. “I’ll take care of it in a minute.”
“DRNL?” Shalzed asked.
“It’s a new, leveraged fund that gives twice the daily performance of companies making drones and their ammunition,” he said. Then he looked at me. “It’s for active, experienced traders,” he said.
I guess he could sense that I was a teacher with just a few thousand dollars in my IRA, not someone who played the stock market.
“So you’re hoping for more wars,” Shalzed said, pointing one of his long, blue fingers at Bielski. “Because every time there’s a war, you profit.”
The guy who brought the papers looked smug. “If they aren’t fighting a war, they’re arming for the next one,” he said.
Bielski clicked his tongue. “We don’t start wars,” he said. “The companies we buy stock in just give governments the tools they need to protect their citizens.”
“But buying the stock of companies that make weapons enables them to develop. Then you’re part of the whole war machine,” Shalzed said.
Bielski leaned back in his chair and rolled his eyes. “So just one question,” he began.
“What?” I asked, feeling uncomfortable with the silence.
“If you don’t like weapons, what do you think would be a better investment?”
“How about companies that make food?” Shalzed said quickly. “That’s something all people need.”
Bielski scoffed. “Do you really want to support factory farming? Or companies that make cheap processed food that’s a health disaster?”
“What about companies that make clothing?” Shalzed asked.
Bielski smiled. “Most of them operate sweatshops and many are accused of modern slavery.”
Shalzed wrinkled his forehead. “What about transportation? Trains, planes, and automobiles?”
“Ever heard of climate change?” Bielski asked. “Car companies are lobbying against rules requiring cars to be more efficient. Airplanes are one of the biggest polluters.”
Shalzed looked down.
“Well right now I just own an index fund,” I said.
Bielski grinned. “So congratulations, you already have weapons companies in your portfolio,” he said. “There are at least a dozen in the S&P 500.”
Suddenly I was in the tunnel, and a moment later back in my apartment. This time Shalzed was still with me. I turned to my computer. I don’t know why, but I felt it would be embarrassing for Shalzed to see how much money I made. But the tax program had timed out.
Shalzed picked up the fund’s fact sheet again. “So are you really going to buy stock in companies working to perfect drone warfare?” he asked.
I wasn’t sure. “The amount I’d invest is almost nothing compared to what companies are worth. It’s not going to make any difference,” I told him.
“If you see on the news that children were killed in a drone strike, do you want to feel like you had even a small part in that?” he asked. “When you see countries launching waves of drones, will it make you happy to think that means more orders?”
I swallowed. “I’m just trying to make my retirement account go up,” I said.
Shalzed turned towards the door, then stopped to glance at the drone fund fact sheet, still on my desk. “And do you want Earth fighting wars with even more advanced weapons by the time you retire?” he asked.
One story or question each Friday in your inbox
You'll receive an email each Friday, one week a story, a question the next.
All of Shalzed's emails are sent via Substack.