BOSTON (Dow Jones)--Investors in several Fidelity Investments' mutual funds will have an opportunity next month to vote on a proposal from an outside group that aims to prevent investments in companies linked to genocide.
Last year shareholders in more than a dozen Fidelity funds voted down an anti-genocide proposal - at the company's urging - pushed by the group Investors Against Genocide. But the proposal did net as much as 31% of the votes in one case, and the group has kept up its push at Fidelity and other fund companies.
This year, the July 15 vote planned for 13 Fidelity funds will come a couple weeks after votes planned for 30 funds at Vanguard Group. Investors Against Genocide is also aiming for a vote in early August for at least one fund at American Funds, which is a unit of Capital Group Cos.
The activist group wants mutual fund companies to disengage from investing in a handful of companies - most notably PetroChina Co. (PTR) and its parent China National Petroleum Corp. - that have links with the government in Sudan, where the U.S. has called militia attacks in the Darfur region a genocide.
At Fidelity, the anti-genocide proposal will be voted on for a huge money-market fund and several "Fidelity Freedom" funds, which use a host of investments to help investors target certain retirement years, among others. None of these funds hold shares of PetroChina or other targeted companies, according to Investors Against Genocide, but the group is aiming to set a trend through whichever Fidelity funds it can reach.
"We want them to make a commitment to their customers and prospective customers that they don't invest in genocide," said Eric Cohen, co-founder and chairperson of Investors Against Genocide, in an interview.
The anti-genocide proposal, the third on a list of three proposals put to Fidelity investors, doesn't just target Darfur. Rather, it broadly seeks procedures to stop investments in companies that "substantially contribute to genocide or crimes against humanity."
The aim is for a flexible Fidelity policy that will allow the company to address future humanitarian disasters, beyond Darfur, when they arise.
The mutual-fund giant has once again urged shareholders to vote against the proposal, while explaining in a proxy filing that the proposal, if adopted, would limit investments the U.S. deems lawful.
In a statement on its Web site, Fidelity says it is "sensitive to the ongoing tragedy" in Darfur and "repulsed by genocide," but it doesn't agree that divesting holdings in companies with any Sudan-related activities is the best course of action.
Fidelity has "concluded that when it is appropriate to remain actively invested in a company, we will do so, thus retaining the ability to oppose company practices that we do not condone," the company said. "This, in the long term, may have the greatest chance of ending those practices."
Investors Against Genocide asks investors to voluntarily submit anti-genocide proposals so that they can be wrapped in when internal proposals cause mutual-fund companies to schedule votes. But the group would rather work constructively with companies to reach these investing goals, Cohen said.
The groups withdrew its proposals at TIAA-CREF, for example, after the pension-fund operator in March announced new measures to pressure companies engaging in business with the Sudanese government.
-By Jon Kamp, Dow Jones Newswires; 617-654-6728; jon.kamp@dowjones.com