Vanguard has launched two new exchange-traded funds (ETFs) for investors who want to mitigate certain environmental, social and governance-related (ESG) risks and to avoid or reduce exposure to companies that don’t align with their ESG preferences.
The Vanguard ESG Developed Europe All Cap UCITS ETF and the Vanguard ESG North America All Cap UCITS ETF are designed to serve as core building blocks for ESG-aware portfolios, offering a combination of global and regional exposure to maintain broad diversification at low cost.
The Vanguard ESG Developed Europe All Cap UCITS ETF tracks the FTSE Developed Europe All Cap Choice Index, providing exposure to large-, mid- and small-cap stocks in developed European countries. The ETF has an ongoing charges figure (OCF) of 0.12%1.
The Vanguard ESG North America All Cap UCITS ETF tracks the FTSE North America All Cap Choice Index, providing exposure to large-, mid- and small-cap stocks in the US and Canada. The ETF has an OCF of 0.12%.
The ETFs promote environmental and social characteristics by excluding companies from the portfolios that are involved with weapons, non-renewable energy and vice products2.
The ETFs also exclude companies that are determined by index provider FTSE to be involved in severe controversies related to the United Nations Global Compact Principles, which cover labour, human rights, the environment and anti-corruption. Further details are available on the product pages for Vanguard ESG Developed Europe All Cap UCITS ETF and Vanguard ESG North America All Cap UCITS ETF.
With today’s launches we are building out a suite of “building block” ESG ETFs, designed to help investors construct ESG ETF portfolios for the long term, at a low cost.
With the addition of the two new ETFs, Vanguard’s line-up of funds for environmentally and socially conscious investors consists of the funds and ETFs listed below.
Fund Name |
Strategy |
Domicile |
OCF3 |
|---|---|---|---|
Vanguard ESG Developed Europe All Cap UCITS ETF |
Index |
Ireland |
0.12% |
Vanguard ESG North America All Cap UCITS ETF |
Index |
Ireland |
0.12% |
Vanguard ESG Global All Cap UCITS ETF |
Index |
Ireland |
0.24% |
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 SRI European Stock Fund |
Index |
Ireland |
0.14% |
Vanguard ESG Global Corporate Bond UCITS ETF |
Index |
Ireland |
0.15% |
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% |
1 Source: Vanguard. Data as at 16 August 2022. The ongoing charges figure (OCF) covers administration, audit, depository, legal, registration and regulatory expenses incurred in respect of the funds.
2 Companies are screened for both primary (e.g., producer/ manufacturer) and secondary (e.g., retailer/ supplier) involvement in the exclusion categories using revenue thresholds. The exceptions are cannabis and fossil fuels which are screened only for primary involvement. There are three levels of restriction—least, moderate and most restrictive—based on different revenue thresholds.
3 Source: Vanguard. Data as at 16 August 2022. The ongoing charges figure (OCF) covers administration, audit, depository, legal, registration and regulatory expenses incurred in respect of the funds.
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.
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.
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 in order 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.
For further information on risks please see the “Risk Factors” section of the prospectus on our website at https://global.vanguard.com.
Important information
For further information on the fund's 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.
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