Three of the funds are part of the firm’s new ‘SustainableLife’ range offering varying equity exposures, and one is a pure equity fund.
The SustainableLife range includes the Vanguard SustainableLife 40-50% Equity Fund, the Vanguard SustainableLife 60-70% Equity Fund, and the Vanguard SustainableLife 80-90% Equity Fund.
The fourth fund, the Vanguard Global Sustainable Equity Fund, invests purely in equities and has a commitment to net zero emissions by 2050.
All funds will be managed by Wellington Management Company.
Fong Yee Chan, head of ESG strategy for Europe at Vanguard, said the launch represented the firm’s commitment to helping investors balance their personal values with their financial goals as interest in sustainable investing continues to grow.
“At Vanguard, we integrate ESG considerations into our investment processes and product design in three key ways.
“We engage with the companies in which we invest through our investment stewardship activities.
“We offer funds that allow investors to avoid certain ESG risks, and, thirdly, we allocate capital to companies based on certain sustainability criteria in our new actively managed funds, with the aim to outperform the market.”
The move towards active investing marks a step-change for the firm known for its successful passive funds.
The firm’s most popular passive strategy, the LifeStrategy 60% Equity Fund currently manages £12.5bn and posted a 7.8 per cent return in 2020.
The Lifestrategy range has been the “easy option” for advisers since its inception over a decade ago, but recently experts have warned this might not be the case for much longer due to its heavy exposure to the US and the UK.
Mike Barrett, consulting director at the Lang Cat, told FTAdviser the scale of Lifestrategy - which now has some £30bn in assets - meant there was need for "an additional level of due diligence and care".
Ongoing charges figures for Vanguard's funds
Fund Name | Strategy | Domicile | OCF |
Vanguard SustainableLife 40-50% Equity Fund | Active | UK | 0.48% |
Vanguard SustainableLife 60-70% Equity Fund | Active | UK | 0.48% |
Vanguard SustainableLife 80-90% Equity Fund | Active | UK | 0.48% |
Vanguard Global Sustainable Equity Fund | Active | UK | 0.48% |
Vanguard ESG Developed World All Cap Equity Index Fund (UK) | Index | UK | 0.20% |
Vanguard ESG Developed World All Cap Equity Index Fund | Index | Ireland | 0.20% |
Vanguard ESG Emerging Markets All Cap Equity Index Fund | Index | Ireland | 0.25% |
Vanguard ESG Global All Cap UCITS ETF | Index | Ireland | 0.24% |
Vanguard SRI European Stock Fund | Index | Ireland | 0.14% |
Vanguard ESG Global Corporate Bond UCITS ETF | Index | Ireland | 0.15% |
sally.hickey@ft.com
