Vote your proxy

In the mid-eighties, when I first started investing in mutual funds, I would usually take the time to vote the annual proxies for the various fund families that I had invested with. But over the years, and since I get so much investment "stuff" in the mail, I've taken a much less active role...actually I pretty much ignore the proxies when they come.

So this fall, when a proxy from Janus showed up in the mailbox, it promptly hit the shredder. But a few weeks later, a second proxy showed up. That's unusual, I thought, but it too hit the shredder. Then a third proxy came. OK, what's the deal?

From InvestmentNews

Shareholders in Janus mutual funds are set to vote at a Dec. 29 meeting on a proposal that would attach performance fees to 13 of its 59 stock and bond funds.

Janus Capital Group Inc. originally had intended to put the proposal to a shareholder vote last month but postponed those plans after failing to get enough shareholders to cast a vote one way or the other.

If the proposal is approved, about $25 billion of the Denver-based company's $139 billion in assets will be linked to performance.

Most hedge funds are set up in a similar manner, where the management fees tick up if performance is above a specified benchmark but this is new for the mutual fund industry. Only about 4% of all mutual funds are set up this way, according to Lipper.

Proponents believe that this kind of structure more effectively aligns the objectives of the fund management with investors. I think we'll be hearing a lot more about it.