Vanguard's First Actively Managed ESG Fund Now Available For Investment
VALLEY FORGE, Pa., May 21, 2019 /PRNewswire/ -- Vanguard today launched its first actively managed environmental, social and governance (ESG) fund, Global ESG Select Stock Fund (VEIGX). The fund is now accepting investments during a two-week subscription period concluding on June 4, 2019, when it is expected to begin trading.
The fund's advisor, Wellington Management Company LLP, will focus on enhancing long-term returns and controlling risks by focusing on ESG practices that can materially impact shareholder returns. The firm will employ an active portfolio integration strategy that will identify and select about 40 companies that demonstrate exemplary, long-standing ESG practices, strong business fundamentals and prudent capital allocation. To fully align the fund's corporate governance responsibilities with its investment mandate, Wellington Management will also be responsible for voting and engagement activities for the fund.
Intended to be used within an existing diversified portfolio, the fund is designed for investors who wish to invest in companies with leading ESG practices and strong business fundamentals, as identified by Wellington Management. At times, the fund may hold companies that would be omitted by some exclusionary ESG strategies, so the fund may not be ideal for investors seeking to exclude particular sectors or companies involved in activities that are at odds with their individual values.
Offering both Admiral Shares (minimum initial investment: $50,000) and Investor Shares (minimum initial investment: $3,000), the Global ESG Select Stock Fund is expected to have expense ratios of 0.45% and 0.55%, respectively. By comparison, the average asset-weighted expense ratio of actively managed funds labeled as socially conscious by Morningstar is 0.71%.
An active management leader
Vanguard has deep roots in active management and partners with the world's top active advisors to provide clients with a diverse range of active funds. Today, Vanguard's actively managed funds represent $1.3 trillion in assets under management across equity, bond, and balanced assets.
As Vanguard's longest-serving external advisor, Wellington currently manages more than $360 billion on behalf of Vanguard funds across a variety of mandates. The firm has a strong history of ESG investing and its world-class ESG research and investment teams seeks to incorporate analysis of ESG factors into many of its investment and risk-management processes.
The portfolio managers for Vanguard Global ESG Select Stock Fund each have more than 20 years of investment management expertise:
- Mark D. Mandel, CFA, serves as Wellington's vice chair, senior managing director, partner, and equity portfolio manager. In addition to Mr. Mandel's investment experience, he has an extensive background in research and analysis. Mr. Mandel previously served as Wellington's director of global industry research and oversaw a team that follows thousands of stocks and directly manages investments in diversified mandates, sector portfolios, and hedge funds.
- Yolanda C. Courtines, CFA, serves as Wellington's senior managing director, partner, and equity portfolio manager. In addition to her investment and ESG research experience, Ms. Courtines brings deep international investment expertise to Wellington's team, specializing in international finance with a particular focus on European and Latin American banks. Prior to joining Wellington, Ms. Courtines worked for JPMorgan Chase, SG Cowen, Oppenheimer, and the World Bank.
New fund complements existing low-cost ESG offerings
In recent years, ESG investing has grown significantly and has attracted a diverse set of investors. Vanguard has offered ESG-focused funds for nearly 20 years, with 11 funds in the U.S., Australia, and Europe totaling more than $10.8 billion in assets (as of March 31, 2019). With the launch of Global ESG Stock Select, Vanguard currently offers a range of both indexed and active options for socially-conscious investors in the U.S.
- Vanguard FTSE Social Index Fund (VFTAX), introduced in 2000, seeks to track the performance of large-and-mid-cap U.S. stocks screened for certain social and environmental criteria.
- Vanguard ESG International Stock ETF (VSGX), launched in 2018, seeks to track the performance of non-U.S., large-, mid-, and small-cap companies screened for certain environmental, social, and corporate governance criteria.
- Vanguard ESG U.S. Stock ETF (ESGV), launched in 2018, seeks to track the performance of large-, mid-, and small-cap U.S. companies screened for certain environmental, social, and corporate governance criteria.
To help further educate investors about ESG investing, Vanguard offers "ESG, SRI and impact investing: A primer for decision-making."
About Vanguard
Vanguard is one of the world's largest investment management companies. As of March 31, 2019, Vanguard managed $5.4 trillion in global assets. The firm, headquartered in Valley Forge, Pennsylvania, offers 415 funds to its more than 20 million investors worldwide. For more information, visit vanguard.com.
Asset figures as of March 31, 2019 unless otherwise noted.
For more information about Vanguard funds, visit vanguard.com/fund prospectus to obtain a prospectus or, if available, a summary prospectus. Investment objectives, risks, charges, expenses, and other important information are contained in the prospectus; read and consider it carefully before investing.
Vanguard ETF Shares are not redeemable with the issuing Fund other than in very large aggregations worth millions of dollars. Instead, investors must buy and sell Vanguard ETF Shares in the secondary market and hold those shares in a brokerage account. In doing so, the investor may incur brokerage commissions and may pay more than net asset value when buying and receive less than net asset value when selling.
All investing is subject to risk, including the possible loss of the money you invest. Diversification does not ensure a profit or protect against a loss. Investments in securities issued by non-U.S. companies are subject to risks including country/regional risk and currency risk. These are especially high in emerging markets. Funds that concentrate on a relatively narrow market sector face the risk of higher share-price volatility. Prices of small- and mid-capitalization stocks often fluctuate more than those of large-company stocks.
U.S. Patent Nos. 6,879,964; 7,337,138; 7,720,749; 7,925,573; 8,090,646; and 8,417,623.
Vanguard Marketing Corporation, Distributor.
SOURCE Vanguard
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