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Vanguard launches two equity ESG index funds

George Geddes

a group of trees in a field

Vanguard has expanded its socially responsible offering with the launch of two environmental, social and governance (ESG) equity index funds.

The Vanguard ESG Developed World All Cap Equity Index Fund (VAEIAGI) and the Vanguard ESG Emerging Markets All Cap Equity Index Fund (VAEAIIE) are domiciled in the UK and Ireland, respectively, and have ongoing charges figures (OCFs) of 0.20% and 0.25%.

VAEIAGI and VAEAIIE track selected benchmarks for their respective geographies from the FTSE Global Choice index family.

The FTSE Russell index range screens out companies that are involved in non-renewable energy, such as nuclear power and fossil fuels, weapons, and “vice” products such as alcohol, tobacco, gambling and adult entertainment.

Companies that do not me the United Nations Global Compact Principles on labour rights, human rights, the environment and anti-corruption are also removed.

Vanguard’s ESG index funds enable investors to develop them into their ESG friendly portfolios, providing exposure to developed and emerging markets while excluding companies that fail to meet FTSE’s ESG standards.

Index funds have gone nowhere in 21 years without dividends

Matthew Piro, head of portfolio review department, Europe, commented: “Our clients have a wide variety of humanitarian, ethical, environmental and social concerns, and many want to put their money to work in a way that aligns with their values, while still meeting their investment goals.”

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