Vanguard Investor Choice
Empowering everyday investors through voting choice
“As a company with a long history of reducing barriers for everyday investors, Vanguard Investor Choice continues this commitment, empowering individual investors to participate more directly in the proxy voting process for their mutual fund and ETF shares.”
John Galloway
Global Head of Investment Stewardship
- About
- How it works
- Policy options
- How our funds voted
About Investor Choice
More than 50 million individual investors entrust Vanguard to help them save for objectives such as retirement, a home purchase, a child’s education, or simply financial peace of mind.1 The money that Vanguard manages belongs to those investors, and we take our responsibility to them seriously.
In 2023, Vanguard launched the Investor Choice pilot program, giving individual investors the ability to express their perspective on shareholder matters at the companies held in their equity index funds. With Investor Choice, Vanguard is enabling equity index fund investors to choose a proxy voting policy option aligned with their preferences. An investor’s policy selection directs how their proportionate share of portfolio company holdings is voted at the shareholder meetings included in each pilot.2 Vanguard Investor Choice allows those investors who choose to participate to select from a menu of voting policy options that reflect a broad range of approaches to proxy voting.
Pilot participants' voting policy selections by Vanguard Fund
For the 2025 proxy season, Vanguard Investor Choice will give investors in funds representing more than $200 billion in assets the opportunity to help direct how their equity index funds vote at company shareholder meetings. Vanguard will continue expanding Investor Choice in the future through pilot programs for investors in additional equity index funds.
1 As of December 31, 2023.
2 Vanguard will rely on the share ownership information provided by an investor’s broker or custodian in its calculations. Due to rounding or other factors, the proportionate share of portfolio company shares that are voted according to a Pilot Fund shareholder’s policy selection may not always exactly match that shareholder’s proportionate ownership. Additionally, shares of a security that are on loan pursuant to Vanguard’s securities lending activities or shares that are subject to vote restrictions or ownership limitations could impact the total number of shares available for the fund to vote. In such cases, an investor’s proportionate share will be calculated utilizing the number of shares eligible to be voted by the fund after excluding shares on loan or subject to such voting restrictions and ownership limitations.
How the pilot works
Vanguard Investor Choice gives investors the opportunity to participate more directly in the proxy voting process for the funds they hold by selecting from a range of proxy voting policy options.
Proxy voting basics
Publicly traded companies hold shareholder meetings at which matters may be presented for a shareholder vote.
A wide spectrum of matters may be presented for a shareholder vote, but the most common include the election of the company’s directors, the ratification of the company’s independent auditor, and an advisory vote on executive compensation. Company management may have other proposals on the ballot, including (but not limited to) changes to the company’s capital structure or amendments to the company’s corporate charter and bylaws. Other shareholders may have submitted proposals on a wide variety of matters as well. Learn more about the basics of proxy voting.
Individuals who directly own stocks in a public company receive proxy ballots and can express their preferences on items raised at that company’s shareholder meetings. With Investor Choice, Vanguard is providing a way for index fund investors to help direct how their index fund votes the proxy ballots the fund receives for companies it holds.
About Investor Choice
Vanguard Investor Choice is designed to enable investors in equity index funds to participate in the voting process by selecting from a menu of voting policy options that reflect a range of preferences regarding approaches to proxy voting. Participating investors’ proportionate share of the fund is then voted according to the policy they selected. Investor Choice fact sheet
Why votes matter
Investors’ participation in Vanguard Investor Choice helps direct how their equity index funds vote at shareholder meetings included in the pilot, through selection of a voting policy option that aligns with investors’ personal views regarding proxy voting matters. Vanguard is giving investors in equity index funds the opportunity to direct how their proportionate fund ownership is voted at shareholder meetings.
How to participate
Investors eligible to participate in Vanguard Investor Choice based on their fund holdings will be invited to do so. Eligible investors may receive an invitation based on their communication delivery method preference on record with their broker or custodian. Vanguard will continue to provide updates on upcoming pilots as we expand the pilot program to additional funds and new investors.
Policy options
Vanguard offers eligible investors the opportunity to select from a range of policy options that are designed to meet the preferences of our investors. The voting policy menu seeks to offer a distinct set of mechanical and discretionary options that reflect varying perspectives about the appropriate outcomes of proxy ballot proposals.1,2 The voting policy options available for the 2025 pilot are shown below.3 If an investor elects not to participate in the pilot program, the fund will continue to vote that investor’s proportionate ownership of the fund based on the Vanguard-Advised Funds Policy.
Vanguard Investor Choice policy options
Company Board-Aligned Policy
The proportionate shares of participating investors that select the Company Board-Aligned Policy will be voted in accordance with the recommendations on each proposal made by the portfolio company’s board of directors pursuant to the company board’s fiduciary duty to act in the best interests of the company’s shareholders.
Egan-Jones Wealth-Focused Policy
The proportionate shares of participating investors that select the Egan-Jones Wealth-Focused Policy will be voted in accordance with the proxy voting recommendations from Egan-Jones Proxy Services (“Egan-Jones”), a third-party proxy advisor, that is based on the belief, as described by Egan-Jones, that maximizing shareholder value should be the primary focus of corporate governance and management decisions, without being influenced by political or social agendas. This policy by rule rejects proposals based on environmental, social, or political considerations unless they directly contribute to revenue generation at the company receiving the proposal.
Glass Lewis ESG Policy
The proportionate shares of participating investors that select the Glass Lewis ESG Policy will be voted in accordance with proxy voting recommendations from Glass Lewis & Co., LLC (“Glass Lewis”), a third party proxy advisor, that is based on the belief, as described by Glass Lewis, that enhanced disclosures of company policies and practices related to certain environmental, social, and/or governance issues could mitigate company risks and create operational opportunities.
Mirror Voting Policy
The proportionate shares of participating investors that select the Mirror Voting Policy will be voted in approximately the same proportions as votes cast for the meeting by other shareholders of the security. In instances where proportionate voting cannot be reasonably executed, the fund will leave the proportionate shares unvoted. The proportionate votes will be based on the votes that have been cast by beneficial owners of a portfolio security in Broadridge’s network generally as of the day prior to the applicable meeting and, as such, will not reflect all votes that are ultimately cast at the meeting.
Vanguard-Advised Funds Policy
The proportionate shares of participating investors that select the Vanguard-Advised Funds Policy, which is administered by Vanguard Investment Stewardship, will be voted in accordance with the proxy voting policy recommendations that have been adopted by the Fund’s Board of Trustees. This policy seeks to maximize long-term shareholder returns by focusing on certain principles of good corporate governance associated with long-term shareholder returns.
1 In contrast to the “discretionary” policy options outlined below, two of the policy options available to investors (Company Board-Aligned Policy and Mirror Voting Policy) are executed based on a defined (or “mechanical”) instruction that does not involve any discretion.
2 Unlike the “mechanical” policy options outlined above, three of the policy options available to investors (Egan-Jones Wealth-Focused Policy, Glass Lewis ESG Policy, and Vanguard-Advised Funds Policy) are executed based on defined guidelines that reflect different approaches and perspectives about the appropriate outcomes of proxy ballot proposals. Given the subjective and nuanced nature of many issues on shareholder ballots, the application of these policies is subject to the discretion or judgment of the team or organization responsible for executing the policy. As a result, there may be some variation between an investor’s expectation or how a policy would be applied and particular vote outcomes. That said, the policy options included for the pilot program have been selected after consideration of the clarity and completeness of the underlying written policy guidelines, and the track record of consistency between the guidelines and past voting outcomes.
3 The “Not Voting” Policy was applicable during 2023 and 2024 pilots.
How the funds voted
Investors who participated in the pilot program helped direct how their equity index funds voted at select company shareholder meetings during the pilot period. Details of proxy votes cast by the funds included within the Vanguard Investor Choice can be found here.
Annual U.S. Fund Disclosure
Votes disclosed on Form N-PX to the U.S. Securities and Exchange Commission in accordance with the Investment Company Act of 1940 for the proxy year ended June 30, 2024.
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Global Fund Disclosure
Details of proxy votes cast by all Vanguard funds for the prior two proxy years ended June 30, 2024. Additionally, the vote information for the current proxy year will be published quarterly on a rolling basis. If a fund is managed by multiple advisors, each manager’s vote will display in the record.
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Important information:
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