Investor relations week: proposals for more transparency in voting, how passivity restricts bear markets and the “mega trend” of climate change


– The the Wall Street newspaper (paywall) reported that the SEC has proposed developing rules that would require fund managers to disclose more information about how they use their voting power. The agency’s new proposal would require asset managers to more clearly categorize votes in SEC files to help investors more easily identify and compare fund voting patterns. According to the proposal, reports should be filed in a format that is easier to analyze. It would also require more disclosure on the effect of securities lending by funds.

– Growth in passive investing has isolated the US stock market from a prolonged bear market, according to a study by brokerage StoneX, reported the Financial Time (paying). The success of passive strategies has boosted large caps and growth stocks, while hurting the performance of stocks and small caps, said Vincent Deluard, the company’s global macro strategist. “A preponderance of evidence suggests that the rise in liabilities played a major role in the stock market bubble of the past decade,” he said.

– Climate change ‘is a mega-trend which, if you take advantage of it and get ahead, [is] is going to be an alpha generator for the next 30 or 40 years, ”Christopher Ailman, chief investment officer of CalSTRS, told CNBC. “If you don’t pay attention to it, it will be alpha negative and you will be stuck with a low beta return.”

– Reuters reported that FedEx Corp shareholders approved CEO Fred Smith’s $ 54 million compensation plan at company AGM despite Teamsters union scrutiny for reinstating a cash bonus and additional stock options. FedEx has asked investors to back its executive compensation in an additional securities repository, explaining that the board’s compensation committee makes “real-time decisions, based on the best available information.”

– Canada’s second largest pension fund, the Caisse de dépôt et placement du Québec, has announced that it will abandon all of its oil production assets, valued at C $ 3.9 billion ($ 3.08 billion), d ‘by the end of 2022 and will reduce carbon intensity by 60% by 2030, according to Reuters. La Caisse said it would be the first institutional investor in Canada to pull out of oil producing assets.

– CNN has announced that General Motors CEO Mary Barra will become the first female president of the Business Roundtable, starting in January. Barra pledged to continue “to help advance policies that provide greater economic growth and opportunity for all Americans.” She will replace Walmart CEO Doug McMillon.

– Reuters reported that a group of global private equity and pension fund companies that together manage more than $ 4 billion in assets have joined forces to standardize reporting on the ESG performance of portfolio companies. The group, led by Carlyle Group and CalPERS, will track data on greenhouse gas emissions, renewables, board diversity and other metrics of companies in their portfolio. Researchers from the Boston Consulting Group will aggregate the data into an anonymized repository, and member companies plan to meet once a year to assess data from previous years and build on the initial metrics.

– Zoom Video Communications and Five9, a call center software provider, withdrew their $ 15 billion merger following a prolonged decline in Zoom’s share price, Bloomberg (paywall) reported. Since mid-July, the Zoom share price has fallen by around 30%, making the deal much less attractive. The deal was mutually canceled because it did not “receive the required number of votes from Five9 shareholders,” Five9 said in a statement.

– U.S. companies are expected to maintain strong third quarter profit levels despite mounting cost pressures, reported the WSJ. Analysts expect the S&P 500’s earnings per share to be about 30% higher than the same period last year, according to data from Refinitiv. Economic data shows that, when you look at the market as a whole, profit margins are holding up despite rising costs, the article notes.


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