I received an email from Vanguard asking me to vote on some proxy proposals. As a responsible shareholder I read the proxy statement and I cast my votes. I’m recording my votes here for future reference. I’m not trying to influence your votes. I trust you will read the materials and make your own decisions.
I also own Vanguard ETFs in other brokerage accounts. I expect to receive similar voting invitations shortly.
Board of Trustees
The first proposal is a list of 12 trustees. Trustees are ultimately responsible for the funds. However, these same 12 people serve as trustees on all 195 Vanguard funds. It would be a good challenge for any one of them to write down the names of all 195 funds they are responsible for. It’s just impossible for them to be involved very much at any particular fund except the very high level policies.
The board has the current Vanguard CEO as the chair. Presumably the recently announced successor CEO will become chair as well. While I’d like to see an independent board member serve as the chair, if only as a matter of gesture, I don’t know how much difference it makes in practice.
I have nothing against any of the trustees. I voted for all of them.
Proposal 2: Manager of Managers Arrangement
This proposal applies to some actively managed funds. Although I don’t own any of the funds affected I would vote for it if I did.
Proposal 3: Manager of Manages With Vanguard Subsidiary
This one says Vanguard wants to be allowed to take a fund or a part of a fund in house. It’s a good backup for 3rd party managers. I voted for it.
Proposal 4: Investment Objective of the REIT Index Fund
This says Vanguard wants to be able to expand the REIT index fund to include other real estate related investments. It will also change the index the fund follows. The new index will include additional 3% of these other real estate related investments. 3% doesn’t sound like big deal one way or the other. I don’t understand why they can’t leave good enough alone.
Although I don’t own the REIT Index Fund I would’ve voted against it if I did.
Proposal 5: Reclassify the REIT Index Fund as Nondiversified
This will reclassify the Vanguard REIT Index Fund as nondiversified. Diversified and nondiversified have legal definitions. If the fund’s index becomes nondiversified the fund will have to follow if it still wants to match the index.
Although I don’t own the REIT Index Fund I would’ve voted for it if I did.
Proposal 6: Service Agreement for Institutional Index Fund
I’m not an institution. Even the minimum for one fund is lowered from $100 million to $5 million, it still has nothing to do with me. I guess it’s OK?
Proposal 7: Genocide-Free Investing
I think it’s very hard to judge which company contributes to genocide to what extent. Index funds should just follow the index. Actively managed funds should let the managers decide.
I voted against this proposal as the trustees recommended.
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