Proxy Voting

correct, following, necessary, Investment, only

Sharon Pope has been asked by the Chief Investment Officer to develop a firm-wide policy for proxy voting. Which of the following would NOT be acceptable to include in the policy statement?
A) Portfolio managers of active funds must vote in all proxies; portfolio managers of index funds should vote only when they have a definitive opinion.
B) Voting proxies may not be necessary in all instances.
C) The value of proxy voting must be maximized.

Your answer: A was correct!
Proxies for stocks in passively managed funds must also be voted. A cost-benefit analysis may show that voting all proxies may not benefit all clients.

I am sort of confused with proxy voting. I thought proxy voting is not a mandatory thing if you feel it is in the best interest of the beneficiary not to vote. So, why is it that in answer A it says "Portfolio managers of active funds MUST vote in all proxies; portfolio managers of index funds should vote only when they have a definitive opinion." And then in the answer it says"Proxies for stocks in passively managed funds MUSt also be voted.".

So, Active funds - Must vote,
Index funds - have a choice in voting
Passive funds - Must vote

What if you are managing a passive fund relative to an index?

pennyless

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发表于 2011-7-11 19:08 | 只看该作者

I think you are overanalyzing. The key point to proxies, is that you should do a cost benefit analysis and see if it is worth it to the proxy. You are not required to vote proxies for CFAi standards, but you must disclose this info.

Everything else about active funds, passive funds, index funds, is Schweser fluff used to fill the page.

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Windjam

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发表于 2011-7-11 19:08 | 只看该作者

Aaaah... thank you C.D. Yea that's what I was thinking too, until I got to this problem and suddenly wtf with all this active passive index @#$%&

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Valores

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发表于 2011-7-11 19:08 | 只看该作者

imma call bs....................the answer seems to be B to me ..........why would u chose A over B or rather what wrong with B as an answer?

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Darien

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发表于 2011-7-11 19:08 | 只看该作者

pimpineasy Wrote:
-------------------------------------------------------
> imma call bs....................the answer seems
> to be B to me ..........why would u chose A over B
> or rather what wrong with B as an answer?

I agree, a cost benefit analysis should be performed.

NO EXCUSES

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lcw77