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: Harvard expert warns of potential harm to index investing, as Republican bill takes on woke fund managers

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MarketWatch
By Victor Reklaitis

Senators and legal experts tussled Tuesday over the merits of a Republican bill that aims to reduce the voting power of the three index-investing giants BlackRock, Vanguard and State Street.

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Republican Sen. Dan Sullivan of Alaska introduced the Investor Democracy is Expected (INDEX) Act last month, and so far a dozen other senators from his party have signed on as co-sponsors of the measure.

The legislation would require investment advisers for passively managed funds with more than 1% of a public companys voting shares to cast their ballots in accordance with the instructions of fund investors, rather than vote on company issues as the adviser wishes.

The impetus for this legislation was due to my ongoing frustrations with many of Americas largest banks and insurance companies that undertook policies to start blackballing oil and gas investment development in Alaska, Sullivan said, as he spoke at a Senate Banking Committee hearing on the voting process for index funds.

Why were they doing this? Well, I found out these financial institutions do this in part because of pressure from their largest shareholders the big three investment advisers and their index funds.

Continue read on marketwatch.com

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