Corporate statement
Vanguard to expand proxy voting choice to additional funds in 2024
December 05, 2023
Following the conclusion of our initial pilot program earlier this year, Vanguard will expand our proxy choice program by introducing proxy voting choices to investors in additional funds in early 2024.
As a part of our voluntary, opt-in program, investors in select equity index funds can choose to participate in the proxy voting process more directly and express how the fund should vote their proportionate holdings on matters raised at portfolio company shareholder meetings. These matters may include the election of the company’s directors, the ratification of the company’s independent auditor, and votes on executive compensation. There may also be proposals submitted by company management and other shareholders on a wide variety of matters.
In early 2024, millions of eligible investors in five equity index funds will receive an invitation to select a proxy voting policy via a secure website. Investors in the following funds, which represent over $100 billion in combined assets under management1, will be able to choose from four different proxy voting policy options that direct how the fund votes, proportionate to the investor’s ownership of the fund:
- Vanguard S&P 500 Growth Index Fund
- Vanguard Russell 1000 Index Fund
- Vanguard ESG U.S. Stock ETF
- Vanguard Mega Cap Index Fund*
- Vanguard Dividend Appreciation Index Fund*
Expanding proxy voting choices to more investors is a continuation of Vanguard’s effort to give individuals the information and the options they need to help ensure that their investment portfolios reflect their investment goals and preferences. We recognize that our investors have diverse perspectives, and we are committed to further engagement and exploration in this area to ensure our clients’ needs are met.
Frequently asked questions
What is this proxy choice program?
As a company that pioneered indexing and one with a long track record of reducing barriers to investing and empowering investors everywhere to achieve their financial goals, Vanguard is testing ways to give our investors choices to participate more directly in the proxy voting process. Through this expanded program, investors in select equity index funds will be able to choose from four proxy voting policies that will direct how the fund votes at company shareholder meetings, proportionate to their ownership of the fund.
Why is Vanguard offering proxy voting choices for investors?
We recognize that Vanguard investors have diverse perspectives, and a growing number of investors have expressed an interest in participating more directly in the proxy voting process. We are committed to exploring all available options so our investors’ portfolios can reflect their investment goals and preferences.
What is Vanguard hoping to learn from this expanded program?
This expanded program will allow Vanguard to further test our approach, gauge client demand, and gather direct client and stakeholder feedback to understand the best way to help investors reflect their investment goals and preferences in proxy voting.
1 As of October 31, 2023.
*Funds added to Vanguard’s proxy voting pilot program in 2024
Important information:
All investing is subject to risk, including the possible loss of the money you invest.
For more information about Vanguard funds, visit vanguard.com to obtain a prospectus or, if available, a summary prospectus. Investment objectives, risks, charges, expenses, and other important information about a fund are contained in the prospectus; read and consider it carefully before investing.
Vanguard ETF Shares are not redeemable with the issuing Fund other than in very large aggregations worth millions of dollars. Instead, investors must buy and sell Vanguard ETF Shares in the secondary market and hold those shares in a brokerage account. In doing so, the investor may incur brokerage commissions and may pay more than net asset value when buying and receive less than net asset value when selling.
ESG funds are subject to ESG investment risk, which is the chance that the stocks or bonds screened by the index provider or advisor, as applicable, for ESG criteria generally will underperform the market as a whole or, in the aggregate, will trail returns of other funds screened for ESG criteria. The index provider or advisor's assessment of a company, based on the company's level of involvement in a particular industry or their own ESG criteria, may differ from that of other funds or an investor's assessment of such company. As a result, the companies deemed eligible by the index provider or advisor may not reflect the beliefs and values of any particular investor and may not exhibit positive or favorable ESG characteristics. The evaluation of companies for ESG screening or integration is dependent on the timely and accurate reporting of ESG data by the companies. Successful application of the screens will depend on the index provider or advisor's proper identification and analysis of ESG data. The advisor may not be successful in assessing and identifying companies that have or will have a positive impact or support a given position. In some circumstances, companies could ultimately have a negative or no impact or support of a given position.
