Are money managers playing politics with your pension?

OPINION:

Are you paying attention to what the money managers you’ve entrusted with your lifetime savings are doing with your money? Are they investing to get the best possible return they can — so that you can retire comfortably and perhaps buy a vacation home or leave an estate for your children and grandkids? Or are they injecting their political biases into how your money is invested?

Too often of late, they are doing the latter. They are playing politics with your pension. And that violates their fiduciary duty to you as a client. This scam may cost you tens of thousands of dollars of retirement income. Or more.

I’m referring to the fad on Wall Street called “ESG investing.” Environmental, social and governance investing directs Americans’ personal savings (without our knowledge or explicit approval) into investments that are green or otherwise “socially conscious.“

The scheme works like this: Left-wing activists invade corporate shareholder meetings at companies such as Walmart and Exxon Mobil and demand votes on hostile shareholder resolutions like requiring racial quotas in hiring or advancing radical climate change priorities, such as divesting in oil and natural gas companies (even though these have been some of the top-performing Fortune 100 companies).

Many studies have shown that adopting these onerous ESG mandates reduces a company’s returns to shareholders — i.e., you and me and the 125 million other Americans who have pension money invested in the stock market.

Our new study at the Committee to Unleash Prosperity graded over 100 of the largest money management funds, including those at Fidelity, BlackRock and Morgan Stanley. In some ways, these money managers run Wall Street and the world economy. They have tens of trillions of dollars under management.

Here are the firms that rank worst and best:

F grades

• Guggenheim Funds

• Mutual of America Funds

• Morgan Stanley Funds

• BNP Paribas Asset Management

A grades 

• Dimensional Investment

• Vanguard

• T. Rowe Price

Our report found that many firms may violate their fiduciary duty to get the best return for their clients by voting for radical leftist resolutions, often without their consent. One way to protect yourself from this sinister corporate malfeasance is to move your money elsewhere.

There is some good news on the ESG front: The study finds that in the last year or so, ESG investing has been on the decline. That’s because conservatives are beginning to withdraw their money from firms that are secretly harvesting their votes in favor of policies that are out of step with their own values or diminish the performance of the funds holding their savings. (Any facts or figures about the performance of ESG funds compared with the overall market?)

If investors want to invest in advertised ESG funds, they have every right to do so. It’s their money. But imposing costly ESG policies on investors without their explicit consent can’t be tolerated.

If enough Americans vote with their dollars and tell their brokers to cease and desist, this shareholder revolt can end the scourge of ESG once and for all.

• Stephen Moore is a co-founder of the Committee to Unleash Prosperity and a visiting senior fellow at The Heritage Foundation.