Vanguard Opens Proxy Voting for Fund Investors

Vanguard has begun a pilot program testing a way of giving fund investors a say on how it votes at corporate AGMs.

Investors in two mutual funds and one exchange-traded fund (ETF) — all tracking US stock indexes — will be able to select options as to how the fund should vote at corporate AGMs between February 1 and June 30 this year.

“Exploring ways to provide investors with proxy voting choice is a continuation of Vanguard’s effort to give individuals the information and options they need to help ensure that their investment portfolios reflect their investment goals and preferences,” the company said in a statement.

Vanguard said it aimed to “identify the most efficient and effective mechanisms for enabling investors to express their views in the proxy voting process”.

The three funds included within the pilot are the $6.2 billion Vanguard ESG US Stock ETF, the $6.9 billion Vanguard S&P 500 Growth Index Fund, and the $3.8 billion Vanguard Russell 1000 Index.

Investors in these funds will be given access to four voting options for “certain of the funds’ largest holdings”, Vanguard said.

While Vanguard has not specified the companies that investors will be allowed to vote on, the three funds’ top 10 holdings include tech giants Apple, Microsoft, Amazon and Alphabet, as well as electric vehicle maker Tesla, financial services companies JP Morgan and Visa, and oil and gas group Exxon Mobil.

“By participating in this voluntary pilot, investors will be able to direct how the fund votes on ballot items for certain of the fund’s largest holdings, proportionate to their ownership in that fund,” the asset manager explained.

Vanguard’s general counsel and corporate secretary Anne Robinson said the company was “committed to listening and gathering feedback as we explore ways to further support our clients”.

In November last year, BlackRock announced a partnership with Proxymity, a digital investor communications platform, to allow some of its pooled fund investors in the UK to register their preferences on shareholder votes at company AGMs.