From our former colleague Jackie Cook — index fund voting patterns may be an unhappy surprise to their investors.
[W]hile index funds offered by different companies were often nearly indistinguishable in fees and performance, the voting behavior of the funds was very different.
Vanguard and BlackRock, the two biggest fund managers, tended to side with management and vote against shareholder-sponsored resolutions more frequently than other big fund companies.
That seemed counterintuitive, because BlackRock’s chairman and chief executive, Larry Fink, has repeatedly called on other C.E.O.s to lead their companies toward “social responsibility” and greater “purpose.” Yet BlackRock had the worst voting record of the major index companies, Morningstar’s statistics showed.
Vanguard was close behind. The company is owned by the shareholders of its funds and therefore might be expected to side frequently with the shareholders of the American companies in which the funds invest. But, along with BlackRock, it consistently lagged other fund complexes on important issues.