Shareholders of four funds at Fidelity Investments, the world's largest mutual fund manager, rejected a proposal on Wednesday that would have blocked investments in companies linked to genocide.

Although the measure was defeated for a second straight year, human rights activists lauded what they see as promising investor support for easing suffering in Sudan's Darfur region.

Support for the measure at a Fidelity shareholder meeting ranged from 18.1 percent to 24.6 percent of the funds, which voted on a proposal to bar investments that substantially contribute to genocide or crimes against humanity.

The proposal specifically names PetroChina Co Ltd, an oil company that does business with Sudan's government, which is widely criticized for abuses in its Darfur region. International experts say up to 300,000 people have died and 2.7 million have been uprooted in Darfur since 2003.

Eric Cohen, chairman of Boston-based Investors Against Genocide, which spearheaded the resolution, called the results consistent with last year's shareholder support.

Fourteen Fidelity funds voted on the measure in 2008, with 20 percent to 31 percent of the funds supporting it.

The Investors Against Genocide proposal is nonbinding, but Cohen said in an interview that Fidelity would be hard-pressed to ignore strong investor support for divestments in companies linked to genocide.

Boston-based Fidelity, which manages $1.3 trillion of assets, has recommended shareholders vote no on the proposal both years it has come to a vote. It maintains that its investments are legal under U.S. law and it is obligated to achieve the best returns for shareholders.

Investments in PetroChina account for 0.01 percent of Fidelity mutual fund assets as of May 31, said company spokesman Vincent Loporchio.

At Wednesday's shareholder meeting, Fidelity executives called the Darfur issue complicated and said the company looked to governments around the world to address the conflict.

Shareholders at 21 funds managed by Pennsylvania-based Vanguard Group Inc voted on the proposal on July 3, with support ranging from 7 to 17 percent. Vanguard opposed the resolution, saying it already had similar measures in place.

Human rights activists have waged a three-year campaign to persuade money managers to sever ties with companies linked to the Darfur abuses, and have met some success.

In March, asset management giant TIAA-CREF announced it would tell companies it has a stake in to cease relations with Sudan or work to ease suffering in Darfur. It also said it would seek meetings with executives of PetroChina and other companies linked to the Sudanese government.

TIAA-CREF said it would promptly divest from companies whose executives refused such meetings. It also said it would divest with companies who failed to sever ties with Sudan or take meaningful humanitarian action in the region within nine months.

Shareholder votes at nine additional Fidelity funds are scheduled for August. A similar vote is also scheduled for Capital Group Cos' American Funds unit this summer. (Reporting by Erin Kutz; Editing by Jason Szep and Steve Orlofsky)

Pennsylvania Investment Sudan