Genocide-free investing policy urged for Fidelity funds

Shareholders of 13 Fidelity funds will vote next week on a non-binding resolution that asks the funds' boards of trustees to establish a policy of so-called genocide-free investing.
JUL 09, 2009
Shareholders of 13 Fidelity funds will vote next week on a non-binding resolution that asks the funds' boards of trustees to establish a policy of so-called genocide-free investing. The resolution asks the boards to “institute procedures to prevent holding investments in companies that, in the judgment of the board, substantially contribute to genocide or crimes against humanity.” The resolution is part of a campaign coordinated by the Boston-based shareholder activist group Investors Against Genocide. The group has targeted Boston-based Fidelity in the past on this issue and is challenging the firm now because some of its funds have holdings in PetroChina, a Beijing-based oil company that does business in Sudan, where the government is implicated in genocidal violence in the Darfur region. Last year, similar resolutions garnered support from 20% to 31% of shareholders in 21 Fidelity funds, said Eric Cohen, chairman of Investors Against Genocide. A majority vote is needed to pass the resolution. “I wouldn't be surprised if we had very similar results within those kinds of ranges,” he said. “Anything above high single digits is a very significant message.” Fidelity is opposed to the resolution. “Fidelity seems to have decided they are not going to change their mind,” Mr. Cohen said. “It is astounding that they would oppose it in the face of millions of customers being upset with them [in the last vote].” Fidelity has posted a statement on its website that reads: “We are sensitive to the ongoing tragedy occurring in Darfur, and like others in the world we are repulsed by genocide and all other crimes against humanity. When it is appropriate to remain actively invested in a company we will do so, thus retaining the ability to oppose company practices that we do not condone. This may be the most viable way to bring constructive influence on world issues.” Regarding any actions the firm has taken to engage problem companies, company spokesman Vin Loporchio said: “We communicate directly with companies and we don't generally comment on holdings or individual communications of that type.” Investors Against Genocide has encouraged shareholder action with other mutual fund firms as well. Just last week, however, shareholders of 21 funds at The Vanguard Group Inc. of Malvern, Pa. voted on a genocide resolution, with an average of 89% of shareholders voting against the proposal. Vanguard had adopted a procedure that requires “regular reporting on portfolio companies whose direct involvement in crimes against humanity or patterns of egregious abuses of human rights would warrant engagement or potential divestment.” The practice had been in place on an ad hoc basis and was formalized by the board of trustees, Vanguard reported in March. This spring, Investors Against Genocide withdrew its proposal from the proxy ballot for New York-based TIAA-CREF's shareholder meeting after the institution announced a strategy to engage companies involved with the government of Sudan.

Latest News

SEC to lose Hester Peirce, deepening a commissioner crisis
SEC to lose Hester Peirce, deepening a commissioner crisis

The "Crypto Mom" departure would leave the SEC commission with just two members and no Democratic commissioners on the panel.

Florida B-D, RIA owner pitches bold long-term plan to sell to advisors
Florida B-D, RIA owner pitches bold long-term plan to sell to advisors

IFP Securities’ owner, Bill Hamm, has a long-term plan for the firm and its 279 financial advisors.

Fintech bytes: Vanilla, Wealth.com forge new estate planning partnerships
Fintech bytes: Vanilla, Wealth.com forge new estate planning partnerships

Meanwhile, a Osaic and Envestnet ink a new adaptive wealthtech partnership to better support the firm's 10,000-plus advisors, and RIA-focused VastAdvisor unveils native integrations with leading CRMs.

Fiduciary failure: Ex-advisor who sold practice fined after clients lost millions
Fiduciary failure: Ex-advisor who sold practice fined after clients lost millions

A former Alabama investment advisor and ex-Kestra rep has been permanently barred and penalized after clients he promised to protect got caught in a $2.6 million fraud.

Why the evolution of ETFs is changing the due diligence equation
Why the evolution of ETFs is changing the due diligence equation

As more active strategies get packaged into the ETF wrapper, advisors and investors have to look beyond expense ratios as the benchmark for value.

SPONSORED Are hedge funds the missing ingredient?

Wellington explores how multi strategy hedge funds may enhance diversification

SPONSORED Beyond wealth management: Why the future of advice is becoming more human

As technical expertise becomes increasingly commoditized, advisors who can integrate strategy, relationships, and specialized expertise into a cohesive client experience will define the next era of wealth management