Fidelity

Proxy Voting Disclosure

WHEREAS, in its preamble to its recently disclosed proxy voting policies, Fidelity writes, “We know that shareholders rightfully look to Fidelity to be responsive to matters relating to corporate governance.”

Fidelity released in August 2002 a summary of its proxy voting policies covering equities in the Fund. These policies however outline the Fund’s policies only on a fraction of the issues the Funds annually addresses. The Fund’s guidelines fail to address such important matters as when the Fund would vote against a director nominee, would oppose the retention of the independent auditor, or the position on resolutions for increased disclosure in areas like environmental performance.

Many major institutional investors, such as the pension funds of New York City and the states of California, Connecticut; TIAA-CREF, the world’s largest pension fund, and more than two dozen mutual funds, presently have published comprehensive proxy voting policies.

However, Fidelity continues to oppose the disclosure of its proxy voting record. Fidelity was the largest holder of record of Enron and WorldCom and yet shareholders have no way of knowing whether Fidelity voted for the election of these company’s directors and the appointments of their auditors.

Meanwhile, the U.S. Securities and Exchange Commission (SEC) in September, 2002 in a unanimous 5-0 vote, proposed a rule requiring mutual funds to disclose their proxy voting policies and proxy voting records to fund shareholders. The Investment Company Institute, the trade association of the mutual fund industry and one in which Fidelity is the largest member, consistently opposes proxy voting disclosure.

SEC Chairman Harvey Pitt supported mutual fund disclosure of proxy voting in a speech before the Council of Institutional Investors, saying:
“Today, over half of all Americans participate in our securities markets; most, through mutual funds. Currently, over 50 million Americans own mutual funds, representing more than 53% of American households. . . Mutual funds hold nearly one-fifth of all publicly traded U.S. equity securities.

"These securities are held for the benefit of the investors who are the fund shareholders. They belong to fund investors, who are entitled to know how their property is being voted. The voting power these securities represent carries the ability to influence the governance of U.S. companies. Moreover, voting decisions by funds and advisers have an enormous impact on the financial well being of millions of ordinary citizen-investors. Despite the influence of this voting power, many mutual funds and investment advisers don't disclose their policies on how they vote portfolio securities; fewer enable shareholders to learn if voting policies were in fact followed. Some wield voting power in the face of conflicts; they may cast votes furthering their own interests rather than those for whom they vote.”

RESOLVED, we request the Fund’s Trustees adopt a policy of transparency with regard to the Fund’s proxy voting practices; that the Fund shall make available to any shareholder a comprehensive proxy voting policy; and within 90 days of any proxy vote the Fund’s voting record will be available to shareholders.

Responsible Wealth, 29 Winter Street, 2nd Floor, Boston, MA 02108.
Voice: 617/423-2148 Fax: 617/423-0191.
© 2002 Responsible Wealth. All rights reserved.