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Fund Adviser Proxy Votes Align with Fund Interests

By Paul Schott Stevens

September 24, 2018

A key assertion in “Cracking the Proxy Racket” (The Wall Street Journal's Review & Outlook, September 18) is that asset managers vote “in block” to support recommendations set forth by advisory firms like Glass Lewis and Institutional Shareholder Services (ISS). Such statements ought to be tested against actual data.

A decade’s worth of research shows that fund advisers vote proxies diligently, in line with their fiduciary duty to the fund and its shareholders. Preliminary tabulations of regulatory filings for 2017 bear that out. Fund advisers’ votes tend to align with ISS on noncontroversial and uncontested issues (e.g., auditor ratification). In contrast, on shareholder social and environmental proxies, funds voted “yes” 25.7 percent of the time—a far cry from ISS’s support for 56.5 percent. And with shareholder proposals on board structure, funds voted in favor 48.8 percent of the time, versus ISS’s “yes” recommendation on 80.9 percent.

Asset management is vibrant and diverse, and asset managers’ votes on proxy issues underscore this diversity. Advisers march to the interests of their client—the fund—not those of corporate management, activists, nor proxy advisors.

Paul Schott Stevens is president and CEO of ICI.

Permalink: https://www.ici.org/viewpoints/view_18_proxy_wsj

TOPICS: Fund GovernanceFund RegulationIndex FundMutual FundProxy VotingShareholder

Pointing Fingers at Index Funds Won’t Explain Market Volatility

By Shelly Antoniewicz

February 14, 2018

With all the recent volatility in the US stock market, two questions are frequently being asked:

  • Are fund investors fleeing the stock market?
  • Are index funds causing market turbulence?

The short answer to both questions is no.

Experience and research show that investor flows to and from mutual funds and exchange-traded funds (ETFs) tend to track market returns. ...

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TOPICS: Equity InvestingExchange-Traded FundsFederal ReserveFinancial MarketsFinancial StabilityIndex FundInterest RateInvestor ResearchMutual FundTrading

2017 Annual Report to Members: A Message from the Chairman

By William F. “Ted” Truscott

November 13, 2017

This letter by ICI Chairman Ted Truscott was released in our 2017 Annual Report to Members.

Every day, I’m reminded that each of us in the fund industry is driven to deliver ever-greater value for our fees and keep improving service to fund shareholders. Investors are demanding more from every asset manager—and the resulting competition drives us to innovate, find new efficiencies, and offer even better solutions for investors’ needs.

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TOPICS: Financial MarketsFinancial StabilityFund RegulationGlobalGovernment AffairsICI GlobalIndex FundInternationalInvestor ResearchMutual FundPolicy ResearchRetirement PolicyShareholder

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