Vanguard has launched two ETFs, focusing on the FTSE Developed Europe and North America All Cap choice indices.
The passive fund house said today (August 18) it will use an exclusionary strategy and called the ETFs “ESG-focused” as a result.
Industries which will be excluded, or exposure reduced, as a result of the ESG screening include firearms, tobacco and fossil fuels.
The Vanguard ESG Developed Europe All Cap UCITS ETF will track the FTSE Developed Europe All Cap Choice Index, with an ongoing charges figure of 0.12 per cent.
The Vanguard ESG North America All Cap UCITS ETF will track the FTSE North America All Cap Choice Index, with an OCF of 0.12 per cent.
The products will be managed by Vanguard’s equity index group.
Head of ESG strategy, UK and Europe at Vanguard, Fong Yee Chan, said over the past few years the company has “diligently” developed its ESG range to enable investors to choose products that best align with their preferences alongside their investment goals.
“Today’s launches are the start of the next stage in that commitment; building out our suite of 'building block' ESG ETFs, designed to help investors construct ESG ETF portfolios for the long-term, at a low cost,” she added.
ETF popularity
ETFs are becoming increasingly popular among retail investors.
Fund flows into European ETFs rose 25 per cent in the first quarter of the year, though assets under management stalled amid a dip in stock and bond market valuations triggered by the war in Ukraine and rising inflation.
The European ETF market gathered €42.7bn (£36bn) of new funds in Q1 2022, according to Morningstar’s latest European ETF Asset Flows update published this month.
But total assets remained unchanged at €1.4tn (£1.2tn).
In May this year, Hargreaves Lansdown created an ETF research team in response to client feedback.
The company expanded its research to cover ETFs as well as trackers and actively managed funds and trusts.
sally.hickey@ft.com
