AFL-CIO Equity Index Fund Reaches $2 Billion

Influence Grows as Fund Reaches Milestone

FOR IMMEDIATE RELEASE

(Washington, DC – August 31, 2012) -Today the AFL-CIO Investment Trust Corporation announced that $2 billion dollars has been invested or committed by pension plan investors to the AFL-CIO Equity Index Fund.

The AFL-CIO Equity Index Fund is a collective investment fund sponsored by the AFL-CIO and available to qualified pension plans. Launched in March 2011, the fund tracks the returns of the broad U.S. large-cap equity market, as represented by the S&P 500 Index.

“$2 billion is a major benchmark to hit in a little under two years. The fund’s rapid growth is an indicator of its importance,” said Richard Trumka, President of the AFL-CIO.  “The Index Fund represents a powerful opportunity for union pension plans to promote good corporate governance through proxy voting and shareholder activism.”

“Shareholder activism through proxy voting is shaking the very foundation of corporate executive compensation structures. Unions and the workers they represent are realizing the collective power they have to change the game and are gradually harnessing it, using pension dollars to level the playing field and rectify exorbitant corporate practices, ” says Michael Stotz, president and managing director of the Investment Trust Corporation.

The recent “say-on-pay” vote that rejected a $15 million pay package for Chief Executive Vikram Pandit of Citibank and the discontent of Wal-Mart shareholders, who include public employee funds in New York, California, and Connecticut, is revealing a growing tide of shareholder activism. The Citibank and Wal-Mart examples set a powerful precedent for future acts of shareholder activism, the type encouraged and promoted by the AFL-CIO Equity Index Fund.

Low management fees make the fund especially attractive to investors.  Management fees remain low because stocks in the fund’s portfolio are not actively traded, resulting in management fees of $150 per each million invested (1.5 basis points). Another benefit is low investment turnover and daily liquidity, which reduce both trading expenses and liquidity risk to investors.
The AFL-CIO Equity Index Fund is one of several pension investment vehicles sponsored by the AFL-CIO.  The fund is managed by ASB Capital Management, a registered investment advisor based in Bethesda, Maryland. Thirty-three pension plans, including those served by 10 different consulting firms, have contributed investments and commitments to date.

The AFL-CIO Family of Funds also includes the AFL-CIO Building Investment Trust, which provides competitive risk-adjusted returns through nationwide investments in institutional quality commercial real estate while promoting economic development and creating union jobs; and the AFL-CIO Housing Investment Trust, a fixed-income investment fund that invests primarily in government and agency-insured and guaranteed multifamily mortgage-backed securities.

 Contact: Randy Kinder, 202-898-9190, rkinder@aflcio-itc.com