Victory for genocide-free investing at American Funds - February 17, 2010
- Following a well-publicized shareholder vote on genocide-free investing on November 24, American Funds became the largest mutual fund company to divest its holdings in PetroChina. American Funds sold virtually all their holdings in Petrochina, worth $190 million.
- Investors Against Genocide commended American Funds for acting in the face of genocide.
“At the shareholder meeting on November 24, Investors Against Genocide asked American Funds to draw the line at investing in genocide. We see now, that American Funds was listening. We congratulate American Funds for divesting from PetroChina. Their action is a positive affirmation of their human rights policy. We trust that, going forward, American Funds will promptly apply their human rights policy to avoid other cases of investments that substantially contribute to genocide.”
- Eric Cohen, Chairperson, Investors Against Genocide, press release on February 17, 2010 - Before the shareholder meeting, SEC filings showed that American Funds owned 167 million shares worth $190 million in three funds. According to the American Funds website, the total PetroChina shares in these three funds as of 12/31/09 was 2 million shares worth $2 million. The change in PetroChina holdings is a reduction of 99%.
Links to SEC filings of holdings for the three funds, in advance of the 11/24/09 shareholder meeting:
- Capital Income Builder - $53.6 million
- Capital World Growth & Income - $84.4 million
- EuroPacific Growth - $52.7 million
The links to the American Funds postings of the 12/31/2009 holdings for the three funds:
- Capital Income Builder - $1.0 million
- Capital World Growth & Income - $1.7 million
- EuroPacific Growth - $0 - The shareholder proposal advanced at the meeting by Investors Against Genocide, the Boston-based non-profit organization responsible for the anti-genocide shareholder action, asked the Board to “institute procedures to prevent holding investments in companies that, in the judgment of the Board, substantially contribute to genocide or crimes against humanity, the most egregious violations of human rights.” American Funds opposed the measure. At the shareholder meeting, Investors Against Genocide challenged the adequacy of American Funds’ existing policy based on its lack of action and continued investments in PetroChina, a Chinese oil company that is widely regarded as the worst offender among companies helping to fund the genocide in the Darfur region of Sudan.
- Click here for the press release from February 17, 2010
“Given their action to divest from PetroChina, American Funds should take the added step of making a clear and public statement about this case and the applicability of their human rights policy to divestment of PetroChina.”
“Given how quickly American Funds acted to sell 99% of its PetroChina shares, once it decided to act, we expect that American Funds has already completed its divestment.”
- Eric Cohen, Chairperson, Investors Against Genocide - Click here for press coverage
Support genocide-free investing
Our campaign to submit shareholder proposals to convince mutual fund companies to commit to genocide-free investing continues. However, given American Funds significant actions, Investors Against Genocide is no longer submitting shareholder proposals to American Funds.
- Please volunteer to submit a shareholder proposal for mutual funds you have held for over a year and in which you have at least $2,000 invested.
- We’ve made the process very easy and completely confidential.
- Click here for details.
- Becoming a volunteer costs nothing, and has tremendous leverage, since your submission to any given fund may result in all of that fund's shareholders having a chance to vote on the proposal to avoid investing in companies that substantially contribute to genocide. Depending on the fund, that could mean that a million shareholders, or more, may get a chance to vote!
- Take Action. See this page for more that you can do to help.
Voting on genocide-free investing at American Funds on Nov. 24, 2009
- 16 funds recorded votes of 8.5% to 11.8% in favor of genocide-free investing in voting by 42.5 million shareholders of record
- Press release from the shareholder meeting
- Eric Cohen's statement from the shareholder meeting
- Proxy materials from American Funds, including their statement of opposition to genocide-free investing
- Click here to see all voting results and pending proposals on genocide-free investing.
- Click here for press coverage
American Funds' position at the shareholder meeting on Nov. 24, 2009
- Many voters were misled by the reassurances from the American Funds statement of opposition that their "preferred approach" was sufficient.
“Human rights issues are important ... Any human rights issues that may affect companies are considered by our investment professionals as part of the investment management process. ... We believe considering these issues on a company-by-company basis and as part of the investment management process is preferable … to having the fund boards make these decisions.”
- American Funds statement of opposition in proxy materials filed with the SEC - What are the results of American Funds “preferred approach”?
"Multiple funds continue to invest hundreds of millions of dollars in the worst company supporting Sudan. This result is a serious failure from an investment firm that makes such strong claims about its 'extensive global research effort' which results in a 'well-rounded view' of a company’s operations and which promises that its investment professionals 'get to know a company inside and out.' Clearly, American Funds investment professionals are not adequately addressing even the most egregious human right problems as part of their investment management process."
"We see that since American Funds’ Trustees has not set guiding policies on human rights for its funds, there are none. Clearly, a fundamental principle is missing from American Funds’ guiding principles, since, even in the face of the ultimate crime against humanity, no ethical guidelines regulate American Funds portfolio managers’ investment choices. Ethical investing may mean different things to different people, but surely there is a minimum standard upon which nearly everyone agrees. We draw the line at investing in genocide. The shareholder proposal on genocide-free investing sets this minimum standard for all mutual funds. But American Funds’ position is that they prefer an alternative process that sets no ethical standards."
- Eric Cohen statement at American Funds shareholder meeting
American Funds/Capital Research's holdings
Notes:- Data for 12/31/2009 is from the American Funds website.
- Data for other dates is from SEC filings. The SEC filing dates vary by fund.
| Holding Date | Capital Income Builder | Capital World Growth & Income | Europacific Growth | Total |
| 12/31/2009 | $974,673 | $1,687,209 | $0 | $2,661,882 |
| 11/30/2009 | n/a | $45,112,000 | n/a | |
| 10/31/2009 | $53,628,000 | n/a | n/a | $190,751,000 |
| 9/30/2009 | n/a | n/a | $52,676,000 | |
| 8/31/2009 | n/a | $84,447,000 | n/a | |
| 7/31/2009 | $52,789,000 | n/a | n/a | $192,732,000 |
| 6/30/2009 | n/a | n/a | $51,413,000 | |
| 5/31/2009 | n/a | $88,530,000 | n/a | |
| 4/30/2009 | $38,611,000 | n/a | n/a | $130,561,000 |
| 3/31/2009 | n/a | n/a | $37,145,000 | |
| 2/28/2009 | n/a | $54,805,000 | n/a | |
| 1/31/2009 | $32,830,000 | n/a | n/a | $137,585,000 |
| 12/31/2008 | n/a | n/a | $41,294,000 | |
| 11/30/2008 | n/a | $63,461,000 | n/a | |
| 10/31/2008 | $34,616,000 | n/a | n/a | $183,114,000 |
| 9/30/2008 | n/a | n/a | $49,268,000 | |
| 8/31/2008 | n/a | $99,230,000 | n/a |
- American Funds held $191 million worth of PetroChina in three funds, according to SEC filings as of 10/31/2009.
- Capital Income Building - $53.6 million
- Capital World Growth & Income - $84.4 million
- EuroPacific Growth - $52.7 million - American Funds/Capital Research's worldwide holdings of PetroChina were worth $916 million, estimated based on information accessed by the Sudan Divestment Task Force through Bloomberg LP and market-valued as of August 1, 2007.
- American Funds/Capital Research helds PetroChina primarily through its American Funds mutual funds. These mutual funds file reports with the SEC quarterly disclosing the holdings in each fund. Other holdings from the Capital Research group, particularly non-US-based mutual funds, are not so easily available as are the SEC filings.