Outperforming the Competition

September 2013 Newsletter

AFL-CIO Equity Index Fund Outperforms Competition on Key Votes Survey

Mike StotzDuring the AFL-CIO convention, President Trumka announced that the AFL-CIO Equity Index Fund, a collective investment fund available to qualified pension plans, has grown to more than $4 billion in investment commitments by union, Taft-Hartley, and public employee pension plans since its inception in 2011.

This is a remarkable achievement, however we have a long way to go. CEOs of S&P 500 Index companies made 354 times the average wages of rank-and-file workers in 2012. The AFL-CIO Equity Index Fund promotes good corporate governance through proxy voting and shareholder activism.

Unlike many competing index fund products, the Fund votes entirely in line with the AFL-CIO Proxy Voting Guidelines.

Already in 2013, the AFL-CIO Equity Index Fund submitted shareholder proposals to reform executive compensation practices and to establish independent chairs of corporate boards.

On top of that, the expenses and fees are extremely low because the objective of the Fund is to track the returns of the U.S. large cap equity market as represented by the S&P 500 Index. It also has a track record of success. The Fund ranks in the top 15 percent in returns in the Lipper S&P 500 Index Fund Universe Rankings.

Please do not hesitate to call us at  202-898-9190 or email me with any questions.

In Solidarity,

mike sig



Mike Stotz
President & Managing Director
AFL-CIO Investment Trust Corporation


Brandon’s Corner

Brandon Rees is Acting Director of the AFL-CIO Office of Investment 

0_Brandon_Rees_smallThe AFL-CIO Equity Index Fund doesn’t just talk the talk. It walks the walk.

The AFL-CIO Equity Index Fund votes 100 percent in line with the AFL-CIO’s Proxy Voting Guidelines as measured by the AFL-CIO Key Votes Survey. These votes give pension plans a voice in the management of America’s largest corporations.

The AFL-CIO’s annual Key Votes Survey examines how investment managers voted on corporate governance issues. The survey ranks investment managers based on whether they vote in line with the AFL-CIO Proxy Voting Guidelines.

The AFL-CIO Proxy Voting Guidelines represent a worker-owner view of value that emphasizes management accountability and good corporate governance. Monitoring proxy voting is an important fiduciary duty of pension plan trustees.

The Key Votes Survey and the Proxy Voting Guidelines can be downloaded at http://www.aflcio.org/proxyvotes.  Pension plan trustees can also download a 2013 Key Votes Survey scorecard to give to their investment managers for completion.

Each year, the AFL-CIO selects votes to be included in the Key Votes Survey. The survey includes votes on shareholder resolutions that are submitted by pension plans as well as vote-no campaigns against underperforming boards of directors.

The proposals selected for the Key Votes Survey seek to reform corporate policies.  Shareholder resolutions address corporate governance issues such as establishing independent board chairs and giving shareholders equal access to the proxy.

Proposals to reform executive pay include limiting golden parachutes and excessive perks for executives. Other survey topics include requiring disclosure of corporate political spending and encouraging responsible employment practices.

The Key Votes survey shows that many index fund providers do not vote with the AFL-CIO’s Proxy Voting Guidelines. According to the 2012 survey, State Street, Blackrock, Vanguard, and Northern Trust each scored in the bottom tier of investment managers.

In contrast, the AFL-CIO Equity Index Fund voted 100 percent in accordance with the AFL-CIO Proxy Voting Guidelines.  This means that the pension plan assets managed by the Fund are being voted the right way – every vote, every time.


Shep’s Corner

Shepard Burr is President of ASB Investment Management division of  ASB Capital Management, LLC

Shep BurrThe AFL-CIO Equity Index Fund continues to provide strong performance compared to peer competitors.  For the one-year period ending 6/30/13, the AFL-CIO Equity Index Fund provided a 20.51% return, net of fees and expenses.  This tracked the S&P 500 Index return closely,and beat the Lipper S&P 500 Index Fund Universe average return by 60 basis points.

The Fund has now been operating for 8 full quarters, and in each of the quarter-to-date, year-to-date, one-year, and two-year periods through 6/30/13, the Fund ranks in the top 15% in returns in the Lipper Rankings.

This track record can be attributed to ASB Capital Management’s full-replication management of the Fund, in line with the S&P 500 Index, as well as the very low (1.5 basis points) investment management fee.  ASB has been managing passive equity to the S&P 500 Index for more than 12 years, and this experience has helped the AFL-CIO Equity Index Fund get off to its excellent performance start.


What the Labor Movement is Saying About the
AFL-CIO Equity Index Fund

“The decision to support the AFL-CIO Equity Fund is simple.  We can all benefit from low fees and knowing that every dollar is voted in accordance with the AFL-CIO Proxy Voting Guidelines.”

– Mike Casey. President, UNITE HERE Local 2


“The AFL-CIO Equity Index Fund is about investing our union dollars to leverage our collective assets in ways that support and advance the goals of all workers.”

– Todd Diorio, Business Manager, Laborers Local 17


“The AFL-CIO Equity Index Fund is a strategic pro-active tool to give the labor movement a stronger voice as shareholders. When we pool our resources together, that collective strength can have a major impact on how companies behave.”

– Bernard J. Lunzer, President, Newspaper Guild