How to Invest in the Military-Industrial Complex

“Under Obama, the national defense strategy was focused primarily on terrorism, and that didn’t require a lot of new weapons,” Mr. Thompson said. “So demand for weapons was trending downward. But the moment Trump gets in, it’s all about China, which requires more weapons.”

One thing that won’t change is that this industry enables war-making and killing. That’s likely to give some investors pause.

None of the mutual funds of Calvert Research and Management own companies typically classified as military contractors, said John H. Streur, the firm’s chief executive. Calvert, an Eaton Vance subsidiary that emphasizes environmental, social and governance considerations, doesn’t oppose owning military contractors on principle, he said, because countries do have to protect themselves.

“We’d all prefer the world get rid of its weapons, but that’s not realistically going to happen,” he said. “In that context, one can get comfortable with the concept that it’s ethical to invest in some of these companies.”

For Calvert, a crucial distinction is the kinds of weapons a company makes.

“Cluster munitions or systems for the delivery of those are something we’d avoid,” he said. “They’re indiscriminate and unintentionally harm civilians. We’re also very against land mines, which don’t get picked up when war is over.”

Lockheed Martin, for example, makes weapons capable of delivering cluster bombs and thus is a company Calvert would shy from, Mr. Streur said. On top of this, it’s facing a federal lawsuit over violations of the False Claims Act, he said.

Lockheed Martin would not comment on whether the company makes weapons that are capable of delivering cluster bombs. In a written statement, Jarrod P. Agen, a Lockheed vice president, said the company “does not develop or produce cluster munitions, as defined in the 2008 Convention on Cluster Munitions.”