Vanguard Asset Management | Personal Investing in the UK

Vanguard has launched a range of new funds that emphasise environmental, social and governance (ESG) considerations, for investors who want long-term growth while balancing their financial goals with their personal values.

The Vanguard SustainableLife range of multi-asset funds and the Vanguard Global Sustainable Equity Fund are all actively managed and join our existing ESG stable of six index-tracking funds.

Our three Vanguard SustainableLife funds are ready-made global portfolios comprising both shares and bonds, with an ongoing charges figure (OCF) of just 0.48% per year. They are designed to be all-in-one solutions for investors seeking sustainable long-term growth. All you need do is select the one that best matches your risk preferences, based on the proportion of shares in the portfolio – from the lower-risk Vanguard SustainableLife 40-50% Equity Fund to the higher risk Vanguard SustainableLife 60-70% Equity Fund and Vanguard SustainableLife 80-90% Equity Fund.

More information on the investment criteria of these funds can be found in their prospectuses, which is available on the relevant product pages. Among other sustainability criteria, each Vanguard SustainableLife fund has a commitment to net zero emissions by 2050 or earlier. The funds aim to invest 60% of their shares and corporate bonds in companies with net-zero science-based targets by 2030, rising to 90% by 2040 and 100% by 2050, in alignment with the Paris Agreement.

The funds also screen out certain types of companies, including those involved in the production, distribution, retail sale or supply of tobacco-related products, those involved with thermal coal extraction or power generation, or those involved with controversial weapons. And the fund managers engage with portfolio companies too, to ensure their continued alignment with the funds’ objectives, and expect these companies to follow good governance practices before investing in them.

Similarly, the Vanguard Global Sustainable Equity Fund has net zero targets and excludes certain companies based on specific screening criteria. In addition, the fund has a carbon emissions target, which is to have a carbon footprint that is 50% lower than the global economy. It also invests in companies across the world that have a sustained track record of strong returns and which look to balance their treatment of people, planet and profit for the benefit of all stakeholders, including customers, employees, communities and investors. It too has an OCF of 0.48%.

At Vanguard, we think about ESG risks and opportunities in the context of delivering long-term value to our investors and helping them to meet their objectives. We are also very conscious of the growing interest investors have in ESG matters, not least climate change.

Environmental: How companies and industries manage their impact on the environment. This could include climate change, deforestation, pollution and waste management.

Social: How a company or industry manages its impact on society. This could include how they treat employees and suppliers, community engagement and health and safety.

Governance: Whether a company has good business practices. These could include the diversity of a company’s leadership team, executive pay or how they handle tax.

Our new funds give you more ESG choice and aim to give you the best chance of investment success. This way you can choose how to align your personal financial objectives with your values.

With the addition of our new funds, Vanguard now offers UK investors ten low-cost ESG funds – from global and regional index funds to actively managed all-in-one solutions.

For a full list of our ESG funds, see the table below:

Fund Name	Strategy	Domicile	OCF¹
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%

Note. The ESG and SRI funds listed, promote, among other characteristics, environmental or social characteristics, or a combination of those characteristics. These funds have been classified as Article 8 funds pursuant to the requirements of the EU SFDR.

¹ Source: Vanguard, as at 8 December 2021

Investment risk information

The value of investments, and the income from them, may fall or rise and investors may get back less than they invested.

Some funds invest in emerging markets which can be more volatile than more established markets. As a result, the value of your investment may rise or fall.

Investments in smaller companies may be more volatile than investments in well-established blue-chip companies.

ETF shares can be bought or sold only through a broker. Investing in ETFs entails stockbroker commission and a bid- offer spread which should be considered fully before investing

The funds may use derivatives to reduce risk or cost and/or generate extra income or growth. The use of derivatives could increase or reduce exposure to underlying assets and result in greater fluctuations of the Fund's net asset value. A derivative is a financial contract whose value is based on the value of a financial asset (such as a share, bond, or currency) or a market index.

Funds investing in fixed interest securities carry the risk of default on repayment and erosion of the capital value of your investment and the level of income may fluctuate. Movements in interest rates are likely to affect the capital value of fixed interest securities. Corporate bonds may provide higher yields but as such may carry greater credit risk increasing the risk of default on repayment and erosion of the capital value of your investment. The level of income may fluctuate and movements in interest rates are likely to affect the capital value of bonds.

Some funds invest in securities which are denominated in different currencies. Movements in currency exchange rates can affect the return of investments.

For further information on risks please see the “Risk Factors” section of the prospectus on our website.

Important information

The information contained in this document is not to be regarded as an offer to buy or sell or the solicitation of any offer to buy or sell securities in any jurisdiction where such an offer or solicitation is against the law, or to anyone to whom it is unlawful to make such an offer or solicitation, or if the person making the offer or solicitation is not qualified to do so. The information in this document is general in nature and does not constitute legal, tax, or investment advice. Potential investors are urged to consult their professional advisers on the implications of making an investment in, holding or disposing of [units/shares], and the receipt of distribution from any investment.

This article is designed for use by, and is directed only at, persons resident in the UK.

If you have any questions related to your investment decision or the suitability or appropriateness for you of the product[s] described in this document, please contact your financial adviser.

Vanguard Investment Series plc has been authorised by the Central Bank of Ireland as a UCITS and has been registered for public distribution in certain EEA countries and the UK. Prospective investors are referred to the Funds' prospectus for further information. Prospective investors are also urged to consult their own professional advisers on the implications of making an investment in, and holding or disposing shares of, the Funds and the receipt of distributions with respect to such shares under the law of the countries in which they are liable to taxation.

Vanguard Funds plc has been authorised by the Central Bank of Ireland as a UCITS and has been registered for public distribution in certain EEA countries and the UK. Prospective investors are referred to the Funds' prospectus for further information. Prospective investors are also urged to consult their own professional advisers on the implications of making an investment in, and holding or disposing shares of the Funds, and the receipt of distributions with respect to such shares under the law of the countries in which they are liable to taxation.

The Manager of Vanguard Investment Series plc and Vanguard Funds plc is Vanguard Group (Ireland) Limited. Vanguard Asset Management, Limited is a distributor for Vanguard Investment Series plc and Vanguard Funds plc.

The Authorised Corporate Director for Vanguard Investments Funds ICVC is Vanguard Investments UK, Limited. Vanguard Asset Management, Limited is a distributor of Vanguard Investments Funds ICVC.

For further information on the funds’ investment policy, please refer to the Key Investor Information Document (“KIID”). The KIID and the Prospectus for this fund is available from Vanguard via our website https://www.vanguardinvestor.co.uk.

The Indicative Net Asset Value (“iNAV”) for Vanguard’s ETFs is published on Bloomberg or Reuters. Refer to the Portfolio Holdings Policy at https://global.vanguard.com/portal/site/portal/ucits-documentation for holdings information.

Vanguard Group (Ireland) Limited has implemented the EU Sustainable Finance Disclosure Regulation (EU) 2019/2088 (“EU SFDR”), as appropriate. Vanguard has introduced an internal product classification framework that helps to identify whether certain Vanguard funds promote, among other characteristics, environmental and/or social characteristics, or whether a fund has sustainable investment as its objective. Vanguard also considers the degree to which sustainability risks are integrated into the investment decision making process. Statements explaining Vanguard’s approach to the integration of sustainability risk, including into its remuneration policy and a transition statement to support the consideration of Principal Adverse Indicators (this is the impact of its investment decisions on sustainability factors, commonly referred to PAI), will be available on the policy page of Vanguard’s global website.

Issued by Vanguard Asset Management Limited, which is authorised and regulated in the UK by the Financial Conduct Authority.