As I’ve written before, I’m not especially enthusiastic about socially responsible funds (a.k.a. SRI or ESG funds) in their most common form. It has always seemed to me that, if I wanted to influence a company’s behavior, conscientiously excluding that company from my portfolio — thereby giving up my right to vote on important issues facing that company, giving up my right to speak at that company’s shareholder meetings, and giving up my right to vote on membership of that company’s board of directors — is precisely the opposite of how I would go about it.
Voting gives you power. Right now, index funds have a lot of that power.
Last month I linked to an article by Boris Khentov, arguing that index funds should tell us how they’re voting their shares. This month, Morningstar’s John Rekenthaler takes that discussion further:
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