Voting rights are exercised systematically on all mutual funds managed by Pictet Asset Management's entities.
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Proxy Voting Policy
Our voting policy is based on generally accepted standards of best practice in corporate governance including board compensation, executive remuneration, risk management, shareholder rights.
Long-term interests of shareholders are the paramount objective. We therefore do not always support the management of investee companies and may vote against management from time to time. To assist us in the exercising of proxy votes, Pictet Asset Management uses the services of third party specialists whose expertise and international experience allows us to vote at all relevant company meetings worldwide. Applicable voting guidelines can be found here:
In March 2019, we adapted our proxy voting guidelines for companies where the founder or a family is a major shareholder, i.e. controls more than 30% of the economic or voting rights. Such companies account for around 10% of our total holdings. For these companies, we apply a lower threshold for board independence to reflect the realities of their ownership structure. While typically we would require that a majority of board members be independent from management or reference shareholders, for family-controlled businesses we require that only 33% are independent (unless the requirement of the country where the company is listed is lower).
In February 2020, we adapted our proxy voting guidelines for Japanese companies with no female board members and we will vote “abstain” on male candidates to boards with no female directors. We believe that board diversity can lead to improved corporate governance and strategic oversight. It can also lead to greater innovation, better risk management and stronger connections with customers, employees and business partners. Therefore, we are keen to play our part in encouraging Japanese businesses in their progress towards more gender-balanced boards.
The following principles are used in defining the scope of accounts and securities eligible for proxy voting:
For actively managed funds, we aim to vote on 100% of equity holdings.
For passive strategies, we aim to vote on 100% of equity holdings for Swiss index strategies, and on 80% of AUM for other index strategies. Holdings within the 80% threshold are defined once a year although this can be updated more frequently in case of material deviations. For liquidity reasons, voting rights are not exercised in share blocking markets.
For segregated accounts, including mandates and third-party (ie sub-advisory) mutual funds managed by Pictet Asset Management, clients who delegate the exercise of voting rights to us have the choice between Pictet Asset Management’s policy or their own voting policy.
For portfolios delegated to third-party asset managers and external funds in which we invest on behalf of our client’s, we expect managers to exercise proxy voting per their own policy and report accordingly to relevant Pictet Asset Management entities.
Execution
Pictet Asset Management always reserves the right to deviate from third party voting recommendations on a case by case basis in order to act in the best interests of our clients. Such divergences may be initiated by Investment teams1 or by the ESG team and must be supported by written rationale.
In instances when consensus cannot be reached between the Investments teams and ESG team, the decision is escalated to relevant CIOs and, if necessary, the Head of Investments.
Proxy Voting Statistics 2018
A summary of Pictet Asset Management’s proxy voting statistics is set out below.
In 2018 Pictet Asset Management voted at 3’136 general assembly meetings. We voted “Against” (“abstained” or “withhold”) to at least one resolution at 1’480 meetings and we were unable to vote at 267 meetings for technical reasons.
Breakdown of votable meetings
Source: ISS; Pictet Asset Management – December 2018
Out of 36'447 resolutions we voted against management on 3’469 items (9%) and supported management on 33’011 (91%) items.
Breakdown of votable items
Source: ISS; Pictet Asset Management – December 2018
We voted against management on resolutions that relate primarily to director nominations (44%), executive remuneration (24%), routine issues such as approval of accounts and auditors (15%), and other resolutions such as approval of equity issuance (13%).
Breakdown of votes against management by proposal type (excluding shareholder resolutions)
Source: ISS; Pictet Asset Management – December 2018
We supported 571 shareholder resolutions, ie 62% out of 916 proposals.
Breakdown shareholder resolutions
Source: ISS; Pictet Asset Management – December 2018
The main categories of shareholder resolutions that we supported relate to director nominations (52%), routine business such as requests for an independent board chairman (12%), and other resolutions related to corporate governance (11%).
Categories of shareholder resolutions that we supported
Source: ISS; Pictet Asset Management – December 2018
In 2018, we deviated from third-party recommendations on 133 resolutions. The main categories we deviated were related to director nominations, compensation of executives and other routine resolutions such as election of remuneration committee member(s) or auditor ratification.
Breakdown of deviations from voting guidelines
Source: ISS; Pictet Asset Management – December 2018
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This document is used for informational purposes only and does not constitute, on Pictet Asset Management part, an offer to buy or sell solicitation or investment advice. It has been established on the basis of data, projections, forecasts, anticipations and hypothesis which are subjective. Its analysis and conclusions are the expression of an opinion, based on available data at a specific date. The effective evolution of the economic variables and values of the financial markets could be significantly different from the indications communicated in this document.
Information, opinions and estimates contained in this document reflect a judgment at the original date of publication and are subject to change without notice. Pictet Asset Management has not taken any steps to ensure that the securities referred to in this document are suitable for any particular investor and this document is not to be relied upon in substitution for the exercise of independent judgment. Tax treatment depends on the individual circumstances of each investor and may be subject to change in the future. Before making any investment decision, investors are recommended to ascertain if this investment is suitable for them in light of their financial knowledge and experience, investment goals and financial situation, or to obtain specific advice from an industry professional.
The value and income of any of the securities or financial instruments mentioned in this document may fall as well as rise and, as a consequence, investors may receive back less than originally invested. Risk factors are listed in the fund’s prospectus and are not intended to be reproduced in full in this document.
Past performance is not a guarantee or a reliable indicator of future performance. Performance data does not include the commissions and fees charged at the time of subscribing for or redeeming shares. This marketing material is not intended to be a substitute for the fund’s full documentation or for any information which investors should obtain from their financial intermediaries acting in relation to their investment in the fund or funds mentioned in this document.
EU countries: the relevant entity is Pictet Asset Management (Europe) S.A., 15, avenue J. F. Kennedy, L-1855 Luxembourg
Switzerland: the relevant entity is Pictet Asset Management SA , 60 Route des Acacias – 1211 Geneva 73
Hong Kong: this material has not been reviewed by the Securities and Futures Commission or any other regulatory authority. The issuer of this material is Pictet Asset Management (Hong Kong) Limited.
Singapore: this material is issued by Pictet Asset Management (Singapore) Pte Ltd. This material is intended only for institutional and accredited investors and it has not been reviewed by the Monetary Authority of Singapore.
For Australian investors, Pictet Asset Management Limited (ARBN 121 228 957) is exempt from the requirement to hold an Australian financial services license, under the Corporations Act 2001.
For US investors, Shares sold in the United States or to US Persons will only be sold in private placements to accredited investors pursuant to exemptions from SEC registration under the Section 4(2) and Regulation D private placement exemptions under the 1933 Act and qualified clients as defined under the 1940 Act. The Shares of the Pictet funds have not been registered under the 1933 Act and may not, except in transactions which do not violate United States securities laws, be directly or indirectly offered or sold in the United States or to any US Person. The Management Fund Companies of the Pictet Group will not be registered under the 1940 Act.
Pictet Asset Management Inc. (Pictet AM Inc) is responsible for effecting solicitation in North America to promote the portfolio management services of Pictet Asset Management Limited (Pictet AM Ltd) and Pictet Asset Management SA (Pictet AM SA).
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