The AFL-CIO Equity Index Fund offers low fees
and promotes shareholder activism
(Washington, DC) –The AFL-CIO Equity Index Fund has surpassed $5 billion in market value through investments by more than 75 union, Taft-Hartley, and public employee pension funds.
The AFL-CIO Equity Index Fund (Fund) is a collective investment fund available to qualified employee benefit plans. Launched in March 2011, the Fund tracks the returns of the broad U.S. large-cap equity market at an ultra-low annual fee of only 1.5 basis points (0.015%). The Fund is managed by ASB Capital Management (“ASB”), a registered investment advisor based in Bethesda, MD.
An advocate for long-term shareholder value through proxy voting and shareholder resolutions, the Fund votes in line with the AFL-CIO Proxy Voting Guidelines 100 percent of the time.
“The success of the AFL-CIO Equity Index Fund demonstrates the value placed by workers’ pension plans on low management fees and the use of shareholder activism to achieve long-term shareholder value,” says Richard Trumka, President of the AFL-CIO.
The Fund has used proxy voting to tackle issues related to corporate pay disclosure, golden parachutes, and excessive perks for executives. The rapid growth of the AFL-CIO Equity Index Fund signals the demand for investments that promote good corporate governance.
Workers’ pension plans throughout the country are using their voice as owners of corporations to support important shareholder initiatives on corporate accountability, responsible business practices, and executive compensation.
For example, in 2014 the AFL-CIO Equity Index Fund successfully negotiated changes in executive compensation at McKesson and received a majority vote on its shareholder resolution at Boston Properties to limit the accelerated vesting of equity awards for senior executives.
“It’s critical that workers’ pension plans lead corporate governance initiatives—giving the plans a broader voice to advocate for increased corporate accountability,” says David B. Durkee, President of the BCTGM International Union and Chairman of the AFL-CIO Executive Council’s Capital Stewardship Committee.
“As the pay gap between CEOs and workers continues to widen, it is important that workers’ pension plans make the best use of their assets to reform executive pay,” says Mike Stotz, President and Managing Director of the AFL-CIO Investment Trust Corporation.
Additionally, the AFL-CIO Equity Index Fund continues to be one of the top funds of its type in the country. Through the second quarter of 2014, the Fund ranks in the top 9 percent in S&P 500 index fund returns for every period measured: year-to-date, one-year, two-years, and three-years (Lipper US/All Share Classes/S&P 500 Index Universe. Returns are net of fees and expenses, time-weighted, and include reinvestment of dividends).
“Through low management fees, low Fund expenses, and careful management, the AFL-CIO Equity Index Fund is among the best performers in its class,” according to Shep Burr, President of the ASB Investment Management division of ASB Capital Management, LLC.
ASB has managed Taft-Hartley pension plan investments for more than 30 years. It is notable that ASB also possesses a perfect AFL-CIO Key Votes proxy record for all of its passively- and actively-managed equity accounts.
ASB now manages approximately $13.5 billion in index investments for multi-employer, public, and other union-related pension plans. Chevy Chase Trust Company is trustee of the Fund, and also maintains fiduciary responsibility for its management.
The AFL-CIO Equity Index Fund is one of several pension investment vehicles sponsored by the AFL-CIO. The AFL-CIO Building Investment Trust provides competitive risk-adjusted returns through nationwide investments in institutional quality commercial real estate while promoting economic development and creating union jobs. The AFL-CIO Housing Investment Trust is a fixed-income investment fund that invests primarily in government- and agency-insured and guaranteed multifamily mortgage-backed securities.