The proposed rule would make changes to the proxy voting requirements and significantly impair a retirement plan fiduciary’s ability to vote on proxy proposals that include ESG issues.

The proposed rule would require fiduciaries assessing whether to exercise their right to vote to:

• Consider factors such as the size of the plan’s holding, portion of the issuer owned, and cost of acting;
• Not prioritize any non-pecuniary objective over financial interests;
• Investigate the material facts that support a proxy vote or other action; and
• Maintain enough records to demonstrate the basis for any exercise of shareholder rights.

The proposed rule is clearly intended to suppress shareholder voting. The rule would create onerous obligations on fiduciaries to demonstrate a proxy’s “expected economic benefit” to the plan and would ban proxy voting where economic benefit cannot be demonstrated or the benefit is too small to affect a plan’s performance.

The rationale for the rule is nonexistent. The DOL failed to provide any data showing plan fiduciaries are using excessive plan resources to research and vote proxies. The DOL also failed to demonstrate any excessive costs originating from environmental and social shareholder proposals. The DOL appears oblivious to the ways in which “corporate engagement on ESG issues provides an additional risk control tool to investors above and beyond the risk mitigation that diversification creates,” as one Forbes columnist put it.

The DOL’s proposal also ignores the benefits that proxy voting brings to ERISA plans, as MIDANA CAPITAL pointed out in its comment letter, requesting that the rule be withdrawn.

Although the DOL claims the intention of the rule is to clarify duties pertaining to proxy voting, the proposal essentially is another misguided effort to inoculate corporate executives and undermine shareholder rights.

In June, the DOL proposed a rule aimed at limiting retirement plans from including ESG factors in the investment process. The proposal elicited 8,700 comments from the public. More than 95% of the respondents, including MIDANA CAPITAL, opposed the proposed rule. Similar to the previous proposal, this ill-conceived rule relies on scant evidence and a fundamental misunderstanding of how professional investment managers use ESG criteria in their investment and proxy voting process.

°MIDANA CAPITAL Capital Management is the investment advisor to the MIDANA CAPITAL Funds.

You should carefully consider the Fund’s investment objectives, risks, charges, and expenses before investing. To obtain a Prospectus that contains this and other information about the Funds please click here, email info@midanacapital.com, or call+1(480)-439-2851. Please read the Prospectus carefully before investing.

 Stocks will fluctuate in response to factors that may affect a single company, industry, sector, country, region or the market as a whole and may perform worse than the market. Foreign securities are subject to additional risks such as currency fluctuations, regional economic and political conditions, differences in accounting methods, and other unique risks compared to investing in securities of U.S. issuers. Bonds are subject to a variety of risks including interest rate, credit, and inflation risk. A sustainable investment strategy which incorporates environmental, social and governance criteria may result in lower or higher returns than an investment strategy that does not include such criteria.

This information has been prepared from sources believed reliable. The views expressed are as the date of this writing and are those of the Advisor to the Funds.

The MIDANA CAPITAL Funds are distributed by UMB Distribution Services, LLC. 335 N Wilmot Rd, Tucson, Az 85711. 10/20