State Street to offer
proxy voting choices to retail investors
May 22, 2023 6:27 PM EDT
The ticker and
logo for State Street Corporation is displayed on a screen at the
post where it's traded on the floor of the New York Stock Exchange
(NYSE) in New York City, U.S., June 30, 2016. REUTERS/Brendan
May 22 (Reuters) - State Street Corp (STT.N) will
offer retail fund investors proxy voting choices, the firm said on
Monday, moving ahead of rivals with a strategy that could blunt
criticism of index funds' environmental, social and governance (ESG)
By the end of 2024, the firm's asset-management arm, State Street
Global Advisors, aims to allow investors in $1.5 trillion worth of its
index equity assets to influence how their proxy votes will be cast at
corporate annual meetings.
Investors in products including exchange-traded funds will chose among
various voting policies offered by Institutional Shareholder Services.
While they will not be able to control how votes are cast on
individual directors or other specific ballot items, the guidance
broadens an earlier effort State Street created to give institutional
investors more say.
Other big index fund providers BlackRock Inc (BLK.N) and
Vanguard Group are also moving to give their clients more control,
though not yet to as many individual investors.
Together the three firms manage some $20 trillion. Their influential
votes have drawn much criticism, both from activists urging them to
push portfolio companies harder on issues such as climate change or
workforce diversity and, this year, from right-wing U.S. politicians
who say the
firms focus too much on ESG matters.
Giving away voting rights could blunt the criticism and distinguish
State Street products. Voting choices will be "yet another innovation
that amplifies our ongoing mission to democratize investing," said
Yie-Hsin Hung, CEO of State Street Global Advisors.
State Street aims to offer individual voting for funds including the
SPDR S&P Dividend ETF (SDY.P),
and targets November for certain products.
Investors in funds including one of the firm's best-known, the SPDR
S&P 500 ETF (SPY.P),
will not have access to the voting option because of their unit
investment trust structure, a State Street representative said.
Reporting by Ross Kerber in Iowa City; Editing by Jacqueline Wong
© 2023 Reuters.