Group billed as advocate for Main Street takes on fund giants
“I’m worried about not just how they vote but how they engage companies and how they use their economic power in the political arena,” said Bernard Sharfman, who leads the coalition’s advisory council. Sharfman is a former law professor and an associate fellow at the R Street Institute, a free market think tank.
The fund giants have hit back, saying the point of their voting and engagement is to protect their clients’ investments. BlackRock, Vanguard, State Street, and similar firms have ramped up these efforts as their influence has grown with the rise of passive investing. Investments in passively managed index funds and exchange-traded funds have climbed from $1.8 trillion globally a decade ago to $8.1 trillion today, according to recent research by Morningstar Inc.
“You have this incredible situation where you have all this voting power concentrated in the hands of a few mutual fund advisers,” Sharfman told Bloomberg Law. The coalition, announced May 22, said it wants those who invest in mutual funds via a 401(k) retirement savings plan to have more say in how managers vote their shares.
