Vanguard launching new ESG fund

Vanguard launching new ESG fund

Mar 13, 2019
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Image credit: abigail low via Unsplash
Wednesday, March 13, 2019

Investment giant Vanguard is launching a new actively managed equity fund that focuses on environmental, social and governance, or ESG, issues.

“Vanguard’s new Global ESG Select Stock Fund is taking a distinctive approach to ESG investing, seeking long-term out-performance through the selection of companies that integrate leading ESG practices into their corporate strategies,” said Matthew Brancato, who leads Vanguard’s Institutional Investor Group, in a statement.

Pennsylvania-based Vanguard pioneered passive investing. Its founder, John Bogle, is credited with creating the index fund, which rises and falls according to the overall performance of markets.

Run by Wellington Management, the new actively traded fund will hold 40 companies with “exemplary long-standing ESG practices,” the statement said. It will offer “investor” and “admiral” share classes with fees of 0.55 percent and 0.45 percent, respectively. Wellington will oversee all governance issues and corporate monitoring.

The new fund comes as other investment giants are also betting big on ESG, reported the Philadelphia Inquirer.

American investment firm BlackRock recently launched new ETFs that focus on sustainable foals. The company estimated that sustainable ETFs in Europe would grow to $250 billion (€222.3 billion/CHF252.3 billion) by 2028 compared to $12 billion (€10.67 billion/CHF12.11 billion) today.

The U.S. Chamber of Commerce is also developing ESG standards to help companies and investors identify which kinds of ESG practices they might want to support.

 

Image credit: abigail low via Unsplash