Invesco PowerShares ETFs cast the highest percentage of proxy votes against management proposals, according to a Proxy Governance study commissioned by the IRRC Institute on proxy-voting of the seven largest exchange-traded fund sponsors.
Also, Invesco PowerShares ETFs and ProFunds ProShares ETFs supported every shareholder proposal on corporate governance and corporate compensation examined in the study, the most consistent in favor of such proposals of any ETFs.
Invesco PowerShares voted against 66.7% of management proposals examined in the study, while ProFunds ProShares voted against 33.3% of them.
The study examined the proxy voting and policies of at least one major fund, and in most cases several funds, of each of the seven largest ETF companies on 21 proposals at 21 corporations for the year ended June 30, 2008.
The seven sponsors together held 87% of the $535.5 billion in U.S. ETF assets as of last Dec. 31, with BGI accounting for a 48% share of the total, the study said. Barclays on June 11 agreed to sell its BGI asset management business, including iShares, to BlackRock for $13.5 billion.
Rydex ETFs were the most likely of the ETFs analyzed to vote in support of management proposals and against shareholder proposals, the 30-page study said. Rydex supported all management proposals examined in the study and all the shareholders proposals on compensation. It supported only 14.3% of shareholder proposals on governance.
iShares and Vanguard Group ETFs voted against management in only 16.7% of their proposals and voted against all shareholder proposals on compensation. BGI supported 71.4% of shareholder proposals on governance, while Vanguard supported 28.6% of shareholder proposals on governance.
SSgA and WisdomTree voted against management on 33.3% and 40% of management proposals, respectively. On shareholder proposals, SSgA voted for 50% of proposals on compensation and 57.1% of proposals on governance, while WisdomTree voted 33.3% and 83.3%, respectively, in support of the shareholder proposals.
Lance Berg, BGI spokesman, who hadn't seen the study, said generally, “We vote in the best long-term economic interests of shareholders.”
John S. Woerth, Vanguard principal-public relations, said, “Without seeing the study, it would be difficult for me to comment.” He noted Vanguard's proxy-voting policies, which include a statement that the “overarching objective in voting is … to support proposals and director nominees that maximize the value of a fund's investments — and those of fund shareholders — over the long term.”
Other spokesmen for the EFTs sponsors in the study either couldn't be reached or were unable to respond.