Are mutual funds active voters?

Peter Iliev, Michelle Lowry

Research output: Contribution to journalArticlepeer-review

121 Scopus citations


Mutual funds vary greatly in their reliance on proxy advisory recommendations. Over 25% of funds rely almost entirely on Institutional Shareholder Services (ISS) recommendations, while other funds place little weight on them. Funds with higher benefits and lower costs of researching the items up for vote are less likely to rely on ISS. These actively voting funds are less likely to vote in a "one-size-fits-all" manner, and they earn higher alphas, consistent with benefits from this allocation of resources. For the underlying firms, the presence of actively voting funds mitigates the influence of ISS and helps sway shareholder votes toward value-maximizing outcomes.

Original languageEnglish (US)
Pages (from-to)446-485
Number of pages40
JournalReview of Financial Studies
Issue number2
StatePublished - Feb 1 2015

All Science Journal Classification (ASJC) codes

  • Accounting
  • Finance
  • Economics and Econometrics


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