Vote FOR Question 3 on Vanguard's proxy ballot to encourage Genocide-free Investing



This information was prepared by Investors Against Genocide for the proxy ballot voting at Vanguard on July 2, 2009.

Reflect on the Holocaust.  The killing fields of Cambodia.  The massive slaughter in Rwanda.  After each of these horrifying genocides, world leaders and private citizens joined in a collective promise – “Never again.”

Vanguard shareholders now have the unique opportunity to make an important difference in society’s ability to keep that promise. 

How?
  • Vote FOR Question 3 if you are a shareholder of any of these 30 Vanguard funds on the proxy ballots you recently received from Vanguard.  
  • A vote FOR Question 3 requests the Vanguard board to “institute procedures to prevent holding investments in companies that, in the judgment of the board, substantially contribute to genocide or crimes against humanity, the most egregious violations of human rights."
Why?
  • "Ethical investing" may mean different things to different people, but few people want their hard-earned savings to be invested in companies that help to fund genocide.
  • In a 2007 study, 71% of respondents said companies should take extreme cases of human rights abuses, such as genocide, into account rather than base investment decisions solely on economic criteria.
  • Looking back, who would support the idea of investing in firms that sought to make a profit by selling Zyklon-B gas to the Nazis or machetes for the genocide in Rwanda?
  • The shareholder proposal in Question 3 is not theoretical.  Right now the government in Sudan is waging a genocide in Darfur. Avoiding the small number of problem companies that are helping to fund the genocide in Darfur should not result in any significant effect on performance  

Voting information

  • If you have not voted and still have your proxy, please vote TODAY for Question 3.  Your vote will matter.  You will need your control number and security code from the proxy.  Visit www.proxy-direct.com/vanguard to cast your vote.
  • If you want to change your vote or have discarded your proxy materials, you can still vote FOR Question 3.  Just contact Vanguard at 800-822-8978 and ask for instructions on how to revote or vote after discarding your materials.
  • If you have questions or concerns about the proposal or about voting, please feel free to contact us at info@investorsagainstgenocide.org.
Why Vanguard opposes Question 3 -- Vanguard opposes Question 3 and claims that the shareholder proposal, if adopted, would simply result in a “duplicate” of Vanguard’s existing procedure.  We strongly disagree.  Click here to review the key differences.

Help make our investments genocide-free -- TIAA-CREF, another giant mutual fund, has adopted strong policies to draw the line at investing in companies that contribute to genocide, joining many states and colleges that adopted Sudan divestment policies.  Now, if Vanguard acts, it could set a new standard for the world's mutual funds.

About Investors Against Genocide -- Investors Against Genocide, a project of the Massachusetts Coalition to Save Darfur Inc., a 501c3 non-profit, is dedicated to convincing mutual funds, such as Vanguard, to adopt procedures to prevent investments in companies that substantially contribute to genocide.

FAQ's about the voting at Vanguard

Vanguard's policy is an inadequate response to genocide


Vanguard opposes Question 3 and claims that the shareholder proposal, if adopted, would simply result in a “duplicate” of Vanguard’s existing procedure.  We strongly disagree.
  • The shareholder proposal requests that the Vanguard board “institute procedures to prevent holding investments in companies that, in the judgment of the board, substantially contribute to genocide or crimes against humanity.” 
  • In contrast, the practices and procedures outlined in Vanguard’s statement of opposition consist of a “formal procedure for regular reporting to the trustees on portfolio companies whose direct involvement in crimes against humanity or patterns of egregious abuses of human rights would warrant engagement or potential divestment.
  • Vanguard has so far declined to make public the procedure adopted by its funds’ Board of Trustees, the names of companies about which it has concerns, or how it intends to implement the procedure with problem companies.  For the millions of Americans who are Vanguard customers and do not want their savings or pension funds connected to genocide, Vanguard provides no evidence of positive action, and no transparency about Vanguard’s approach.
  • Supporting Question 3 is needed to encourage the trustees of Vanguard to adopt a procedure that clearly identifies their approach to preventing holdings in companies that substantially contribute to genocide or crimes against humanity.
    •

Vanguard funds with the opportunity to vote to encourage genocide-free investing

  • Vote FOR Question 3 to encourage genocide-free investing if you are a shareholder of any of these 30 Vanguard funds:
- 500 Index
- Emerging Markets Stock Index
- Energy Index
- Equity Income
- European Stock Index
- Explorer
- Extended Market Index
- Global Equity
- Growth Index
- Health Care
- Intermediate-Term Tax-Exempt
- International Growth
- LifeStrategy Moderate Growth
- Mid-Cap Index
- Pacific Stock Index
 - Precious Metals and Mining
- Prime Money Market
- PRIMECAP
- PRIMECAP Core
- REIT Index
- Short-Term Bond Index
- Short-Term Treasury
- Small-Cap Growth Index
- STAR
- Tax-Exempt Money Market
- Total Bond Market Index
- Total International Stock Index
- Total Stock Market Index
- Value Index
- Windsor

What else can I do to help

  • Tell your friends and family about the opportunity to vote!  Most shareholders throw away their ballots or automatically vote with management.  Help spread the word of this important opportunity to vote your values, because your help will make a difference in the vote.
  • Use this half-page flyer about the July 2 vote at Vanguard's shareholder meeting, designed for use as a handout to spread the word.

Vanguard's holdings

  • Vanguard's holdings of the top problem companies totaled $303 million as of 1/31/2009.
  • Vanguard increased its holdings in PetroChina between the late 2008 and 1/31/09:
    from 177 million shares worth $134 million     to 189 million shares worth $140 million.
  • Vanguard's PetroChina shares were held by six mutual funds:
    -     Emerging Markets Stock Index Fund
    - Energy Fund
    - FTSE All-World ex-US Index Fund
    - Global Equity Fund
    - Total International Stock Index Fund
    - Total World Stock Index Fund

Vanguard shares
 9/30/2008 10/31/2008 12/31/2008 1/31/2009
Emerging Markets Stock Index



China Petroleum
118,586,580
123,943,060
CNPC
17,594,330
17,944,330
Oil and Natural Gas Corp
1,982,723
2,071,529
PetroChina
149,630,899
155,673,909
Petronas Dagangan Bhd
1,856,200
1,909,000
Petronas Gas Bhd
3,573,028
3,684,728
Sinopec Shanghai Petrochemical
16,747,668
17,371,596
FTSE All-World ex-US Index



China Petroleum
3,702,000
5,876,000
CNPC
380,000
860,000
Oil and Natural Gas Corp
51,738
103,985
PetroChina
4,742,000
7,406,000
Petronas Dagangan Bhd
96,800
96,800
Petronas Gas Bhd
129,100
221,000
Sinopec Shanghai Petrochemical
184,000
828,000
Global Equity Fund



China Petroleum 20,116,000
35,682,000
Oil and Natural Gas Corp

158,292
PetroChina

2,760,000
Total International Stock Index



China Petroleum
15,854,000
17,472,000
CNPC
2,230,000
2,690,000
Oil and Natural Gas Corp
258,023
289,514
PetroChina
19,812,000
22,148,000
Petronas Dagangan Bhd
233,200
233,200
Petronas Gas Bhd
451,400
506,500
Sinopec Shanghai Petrochemical
2,242,000
2,242,000
Total World Stock Index



China Petroleum
126,000
268,000
CNPC


20,000
Oil and Natural Gas Corp
1,550
4,910
PetroChina
180,000
350,000
Petronas Dagangan Bhd
1,300
1,300
Petronas Gas Bhd
4,500
10,100
Sinopec Shanghai Petrochemical


18,000
Energy



China Petroleum


74,000
Oil and Natural Gas Corp
3,610,661
3,674,174
PetroChina
744,000
744,000
Petronas Dagangan Bhd


635,800

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