How to Find Private Prison Stocks in Your Portfolio by Liz Angeles and Hannah Hummel, Morningstar Investing Center, Aug. 7, 2025
https://www.morningstar.com/sustainable-investing/how-find-private-prison-stocks-your-portfolio

In recent years, exposure to private prisons has become a concern to values-based investors seeking to exclude such securities from their portfolios.

In the United States, two publicly traded private prison companies dominate the market: The GEO Group GEO and CoreCivic CXW. Modern private prisons emerged in the 1980s as the prison population increased, partly because of the so-called war on drugs, and the US government began contracting with private companies. The predecessors of both companies became REITs to take advantage of related tax benefits in 2013 and converted to C corporations in 2021. Since then, they have maintained steady contracts with the Bureau of Prisons, US Marshals, and US Immigration and Customs Enforcement.

Aside from making direct purchases of these equities, investors may also be exposed to GEO and CoreCivic by owning index funds whose benchmarks contain these stocks. We highlight the four largest equity funds in our database that are exposed to both private prisons operators, the top 20 funds with the largest allocations to each stock, and, lastly, the top 20 US equity funds with no exposure to these securities.

Since the election of the new presidential administration, these stocks have rallied. But for many investors, including values-based investors, private prisons are a source of conflict. For conventional investors, they can also represent political and other risks.