BlackRock Opens up Proxy Voting to Index Clients
Investment giant BlackRock announced a significant expansion of its initiative to provide clients invested in its index funds with the capabilities to control their own proxy voting choices, opening up the program to nearly half of the firm’s nearly $5 trillion in index equity AUM, and unveiling plans to expand the initiative further.
The announcement follows the introduction of the BlackRock Voting Choice program last year, beginning with certain institutional clients, including pension funds, insurance companies and corporations, in certain accounts managed in the US and UK. The expanded program now opens up voting choices for more institutional pooled funds in the UK, as well as to Canadian and Irish pooled funds.
Following the expansion, 47% of BlackRock’s $4.9 trillion in index equity assets are eligible to participate in the program, with voting choice available to 100% of US pension plans, and 80% of Europe and UK index equity assets, other than ETFs.
Sandy Boss, Global Head of BlackRock Investment Stewardship, said:
“Our clients have a range of investment horizons, risk preferences and financial needs. We understand that some clients are seeking increased customization, including the opportunity to align their voting with their unique investment philosophies or their views. We are therefore pleased to provide our clients with voting choice options that are the broadest available today.”
BlackRock stated that the expansion of the voting choice initiative comes in response to growing client interest. Since the program initially launched earlier this year, clients representing $120 billion of elected to vote their own preferences in addition to $420 in client AUM who already controlled their own voting.
The program offers investors several voting options, including giving institutional clients the ability to apply their own stewardship preferences (targeted at large with their own voting expertise and infrastructure), a hybrid approach enabling clients to vote their preferences on specific categories, sectors or markets, or allowing clients to follow off-the-shelf voting policies from third-party proxy advisers. Additionally, clients may continue to allow BlackRock to continue exercising voting rights on their behalf.
In a newly released white paper, BlackRock also outlined its ambition to continue rolling out voting choice to all investors, including individual investors in index funds. The firm also said that it is currently working to expand the offering to more European investors, and will look to grow it further to cover additional investor types in more countries.
Salim Ramji, Global Head of iShares and Index Investments, BlackRock commented:
“Following years of work on technology and regulatory barriers, nearly half of our clients’ index equity assets – including pension funds representing more than 60 million people – have easy and efficient options to vote their preferences. While BlackRock’s Voting Choice program is an industry first, we see it as just a beginning. Our ambition is to make voting choice convenient and efficient for all investors, and we are working with policymakers and industry participants around the world to extend voting choice for our clients.”
Click here to view the BlackRock white paper, It’s All About Choice.