Investing Blog Roundup: Index Funds’ Voting Power (And What to Do About It?)

As I’ve written before, I’m not especially enthusiastic about socially responsible funds (a.k.a. SRI or ESG funds) in their most common form. It has always seemed to me that, if I wanted to influence a company’s behavior, conscientiously excluding that company from my portfolio — thereby giving up my right to vote on important issues facing that company, giving up my right to speak at that company’s shareholder meetings, and giving up my right to vote on membership of that company’s board of directors — is precisely the opposite of how I would go about it.

Voting gives you power. Right now, index funds have a lot of that power.

Last month I linked to an article by Boris Khentov, arguing that index funds should tell us how they’re voting their shares. This month, Morningstar’s John Rekenthaler takes that discussion further:

• Index Funds Have Too Much Voting Power from John Rekenthaler (requires free Morningstar account)
• 3 Solutions for Index Fund Voting from John Rekenthaler (also requires free Morningstar account)

Recommended Reading

• Nearly All COVID Deaths in US Are Now Among Unvaccinated from Carla Johnson and Mike Stobbe
• Don’t Choose 2021 Advance Child Tax Credit Opt-Out from Harry Sit
• Getting the Goalpost to Stop Moving from Morgan Housel
• How the 1 Percent’s Savings Buried the Middle Class in Debt from Rebecca Stropoli
• The Valid and Not-So-Valid Reasons for Rejecting Annuities from Joe Tomlinson
• Some 401(k) Plans May Start Offering Cryptocurrency as an Investment Option. Here’s Why That’s a Bad Idea. from Michelle Singletary
• The CFP Board Has Given Up on Protecting the Public from Unscrupulous Advisors from Allan Roth (requires free financial-planning.com account)

Thanks for reading!