Report Card: Investment Fund Managers' Proxy Voting Behavior

[Cocoa Beach Bum]

Earlier this month, a group called the Committee to Unleash Prosperity published an interesting report: Politics Over Pensions: The 1st Annual Report Card on Investment Fund Managers & Proxy Voting Behavior. The WSJ summarized it in a brief editorial published on May 15, 2023, which included the following table:

Code: Select all

RANK	FUND FAMILY		       SCORE  GRADE
1	Dimensional			9.5	A
2	Vanguard			9.2	A
3	T. Rowe Price			8.7	A
4	Fidelity			8.7	A
5	BlackRock			6.8	C
6	JP Morgan			6.3	C
7	AXA Equitable Life		5.3	C
8	SunAmerica			5.0	C
9	AllianceBernstein		5.0	C
10	Geode				4.9	D
11	BNY Mellon			4.8	D
12	Goldman Sachs			4.7	D
13	State Street			4.6	D
14	TIAA-CREF			4.6	D
15	PGIM				4.4	D
16	Jennison Associates		4.3	D
17	Wellington			4.2	D
18	SEI				4.1	D
19	RBC				4.0	D
20	Franklin Templeton		4.0	D
21	Capital Group			3.9	D
22	Charles Schwab			3.1	D
23	Invesco Capital			3.0	D
24	Voya Investment Mgmt		2.8	F
25	Invesco Advisers		2.6	F
26	Columbia Threadneedle		2.3	F
27	Allspring Global		2.3	F
28	Thrivent			1.9	F
29	UBS				1.8	F
30	MFS				1.5	F
31	American Century		1.3	F
32	ProFund Advisors		1.1	F
33	Guggenheim			1.1	F
34	First Trust Advisors		1.1	F
35	Invesco Perpetual Select Trust	0.9	F-
36	Deutsche Bank			0.5	F-
37	Swisscanto			0.4	F-
38	Northern Trust			0.4	F-
39	Storebrand Asset Mgmt		0.3	F-
40	BNP Paribas			0.0	F-

I think most will find this report offers useful guidance on fund manager selection, regardless of which end of the ESG spectrum one falls. At one end, choose from the four grade "A" fund managers, at the other end, choose from the six grade "F-" fund managers.

Here is what the report says about "proxy advisors":

The ESG agenda has also found loyal handmaidens in the proxy advisory industry, which is dominated by ISS and Glass Lewis. These two groups are frequently hired by mutual fund and ETF families, as well as public pensions and endowments, to make recommendations on shareholder proposals. Both routinely recommend that companies and fund families support measures such as implementing net zero emissions goals and personnel targets that amount to de facto quotas based on race, sex, and ethnicity.

State attorneys general have raised questions as to whether these two firms have “acted contrary to the financial interests of their clients.” Our review of their 2022 voting recommendations on ESG oriented proposals reveals that Glass Lewis earned an implied grade of D and ISS an F-.

[Gaston]

Interesting. I notice that of the four “A” firms, only one is a public company.