AMX and DWS launch stewardship service for pooled funds

The Asset Management Exchange (AMX) and asset manager DWS have launched an investment service that allows pension schemes to express their stewardship preferences in pooled funds.

The new pooled fund service, which has been developed in partnership with Minerva Analytics and Northern Trust, aggregates investor stewardship preferences and seeks to execute votes in alignment with their expressions of wish.

Where aggregate investor preferences conflict within a pooled fund, voting instructions can be split accordingly.

Institutional investors in pooled funds have historically relied on the investment manager to execute a voting policy for the pooled fund. However, when investor preferences have diverged from the manager’s policy, they have been forced to accept the votes placed by the manager.

With this new Investor Stewardship Service, companies across the world can receive proxy votes from the AMX DWS pooled funds aligned with investor preferences where possible on key topics such as climate change, executive compensation, and board diversity.

Guy Opperman, minister for pensions and financial inclusion, said: “I’m delighted to see AMX and DWS launch a product allowing trustees to choose a voting policy, which provides the same benefits of scale and efficiency offered by pooled funds. This will tackle, head-on, the industry practice of ‘invest in my fund, accept my voting policy’.”

Opperman said he strongly hoped this would prompt other pension scheme trustees to challenge their fund managers about plans to offer this service, and would also drive engagement with other key issues such as how their managers are engaging and voting on pressing issues such as climate change.

The launch of the new service follows the UK Government announcing in December 2020 the establishment of the Taskforce on Pension Scheme Voting Implementation to encourage industry solutions linking investor preferences to corporate voting actions.