How to Find Private Prison Stocks in 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.

Such entities are subject to political risk because their fortunes frequently depend on the administration in power. For example, the current administration plans to double immigration detention space to hold 100,000 people by contracting private prison operators. But the previous administration declared that private facilities “consistently underperform in comparison to resources and services provided by government facilities.” Democratic Sen. Ron Wyden of Oregon has claimed: “Private prisons make our communities less safe by focusing on shareholder profits and doing nothing for rehabilitating people to become productive citizens after they have served their sentence.”

In 2018, the New York State Common Retirement Fund divested its holdings in private prisons. Meanwhile, teachers began pushing their retirement plans to divest.

They may also incur human rights risk. Morningstar Sustainalytics gives both GEO Group and CoreCivic “medium” risk ratings on environmental, social and governance criteria but raises concerns about human rights risks. For example, federal and state investigations raised concerns about chronic understaffing, verbal abuse and physical assault of inmates, inadequate provision of medical and psychiatric services, and drug trafficking at CoreCivic facilities, according to Sustainalytics. Some raised concerns about accurate disclosure of key safety metrics at CoreCivic-operated properties. In a recent ESG Risk Rating Report, for example, Sustainalytics related that “in January 2020, an audit by the Tennessee comptroller at the Trousdale Turner Correctional Center identified issues in data reporting of inmate deaths, assaults, and officers’ use of force.” Sustainalytics’ ESG Risk Rating Report for GEO Group indicates that the company has faced similar allegations of human rights violations, particularly regarding “medical negligence” and “sexual assault.”

In the past decade, both CoreCivic and GEO Group have faced lawsuits alleging the operators sanctioned the use of forced labor in their facilities. In 2021, a Washington federal court instructed GEO Group to dispense $17.3 million to “10,000 immigrant detainees that the company had paid USD 1 a day to perform tasks such as cooking and cleaning,” according to Sustainalytics. In 2022, Delaware canceled its contract with GEO Group over reported “inmate mistreatment” at its George W. Hill Correctional Facility.

Morningstar doesn’t officially cover the two stocks. Our quantitative ratings have a fair value of $17.49 for CoreCivic, versus its current stock price of $19.60, and $17.00 for Geo, versus its current stock price of $22.88.

Private Prison Stocks Soar in 2025

The GEO Group and CoreCivic are the country’s two largest operators of private prisons, “collectively managing over half of the private prison contracts in the United States with combined revenues of $3.5 billion as of 2015,” according to The Sentencing Project.

In the months leading up to the 2024 presidential election, CoreCivic’s stock performance dipped into negative territory. Since the election, however, both stocks have rallied, outperforming the broader US equity market. Performance for The GEO Group, in particular, jumped over 100% in early November and is up almost 140% this month against a January 2024 baseline.

Longer term, they have lagged the market. Over the past 15 years, GEO Group has returned 10.29% on an annualized basis, versus 14.03% for the Morningstar US Market Index. CoreCivic has returned 4.77%.

Investing in Private Prisons May Pose Multifaceted Risks to Investors

As a mutual fund investor, you may wonder whether any of your funds are invested in private prisons.

While funds with ESG objectives are commonly constructed using screens for controversial weapons manufacturers and fossil fuel companies, private prisons—profit from mass incarceration—represent a newer focus of investor attention.

A number of clients wish to remove private prison stocks from their portfolios, according to Lisa Cooper, founder and CEO of Figure 8 Investment Strategies, which practices sustainable investing. In Cooper’s experience, ESG-conscious clients have expressed concern that private prison operators profited from mass deportations carried out by ICE. These totaled nearly 20,000 in June of this year alone, according to data published by NBC News. Profits may rise further after the new budget law passed last month allocated $45 billion to grow ICE’s detention network.

For investors keen to minimize ESG risk, owning stocks like The GEO Group and CoreCivic may expose them to companies at risk of committing human rights abuses, points out Cooper. From a traditional risk perspective, Cooper adds, private prison companies “face a great deal of operating risk, both on a regulatory and financing front.” When asked if there is a trade-off between owning prison-free investments and achieving competitive market performance, Cooper says: “You should not have to give up anything to do social investment over the longer term.”

Here’s how to find out whether your funds are invested in these companies and some things you can do about it. We first highlight the four largest US equity funds that contain both The GEO Group and CoreCivic. Next, we show the top 20 funds with allocations to each stock. Then, we highlight the 20 largest US equity funds that do not have exposure to these companies. We conclude by spotlighting a screening tool that allows users to search from thousands of US equity funds for exposure to private prisons stocks.

All remaining data in this story was sourced from Morningstar Direct.

The Top Four US Equity Funds Exposed to GEO Group and CoreCivic

As of June 30, of the 25 largest funds in Morningstar’s database, four investment vehicles held both The GEO Group and CoreCivic:

1. Vanguard Total Stock Mkt Idx Inv VTSMX
2. Vanguard Small Cap Index Inv NAESX
3. Vanguard Extended Market Index Investor VEXMX
4. Fidelity Total Market Index FSKAX

The benchmarks most closely aligned with the strategies of these passively managed funds are, respectively:

1. CRSP US Small Cap TR USD
2. S&P Completion TR USD
3. DJ US Total Stock Market TR USD
4. CRSP US Total Market TR USD

The Top 20 US Equity Funds With No Exposure to The GEO Group and CoreCivic

GEO Group and CoreCivic are both mid-cap stocks. Below are the largest funds with no exposure to these companies. These funds are mostly big-cap specialists.

For those seeking to consider a broader range of prison-related stocks, shareholder advocacy nonprofit As You Sow publishes a Prison-Free Funds tool that grades 3,000 US equity funds. By entering a fund’s name or ticker symbol in the tool’s search bar, a user can see a prison industrial complex grade for a fund, as well as a dollar amount and a percentage of assets flagged for exposure to private prisons. The companies include those directly involved in the prison industry, as well as companies involved in the “militarization of borders and the policing of immigration,” according to As You Sow. The company-level research is provided by the American Friends Service Committee.