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Vanguard offers investors greater choice with suite of ethically conscious funds

Vanguard | 30 August 2018


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Vanguard Australia has announced the launch of a range of Environmental, Social and Governance (ESG) funds, providing greater choice for investors who wish to reflect their values in their investment holdings.

The Vanguard Ethically Conscious International Shares Index Fund and Vanguard Ethically Conscious Global Aggregate Bond Index Fund will offer investors access to broadly diversified international equities and international fixed income exposures that exclude fossil fuel reserves, alcohol, tobacco, gambling, weapons, nuclear power and adult entertainment. The new funds will also be offered as exchange traded funds (ETFs) from September 2018.

The Vanguard Ethically Conscious International Shares Index Fund and ETF (ASX:VESG) will provide exposure to over 1,600 securities listed in major developed countries, at a low management expense ratio of 0.20 per cent and 0.18 per cent respectively.

The Vanguard Ethically Conscious Global Aggregate Bond Index Fund (Hedged) and the ETF (ASX:VEFI) include exposure to over 18,000 fixed income securities in major developed and emerging countries, and will be available at 0.28 per cent for the managed fund, and 0.26 per cent for the ETF.

The managed fund offerings will provide investors both hedged and unhedged options.

Evan Reedman, Vanguard Australia's Head of Product and Marketing, said Vanguard was committed to offering greater choice to investors while maintaining broad diversification at a low cost.

“We understand that some investors want products that allow them to achieve their investment objectives while also investing in line with their values. We are pleased to be offering ESG equities and fixed income funds that meet this need while maintaining the hallmarks of Vanguard funds, low cost and broad diversification,” Mr Reedman said.

The funds add to Vanguard Australia's existing ESG offering, joining the Vanguard International Shares Select Exclusions Index Fund that was launched in November 2016.

“We have been offering screened ESG products internationally for almost 20 years and are excited to be able to provide more choice for Australian investors while leveraging our global scale and investment management expertise,” Mr Reedman said.

The Vanguard Ethically Conscious International Shares Index Funds track the FTSE Developed ex Australia ex Non-Renewable Energy/Vice Products/Weapons Index, while the Vanguard Ethically Conscious Global Aggregate Bond Index Funds track the Bloomberg Barclays MSCI Global Aggregate ex SRI Exclusions Index hedged to Australian dollars.

Evan Ong, Managing Director, Asia ETP and listed derivatives strategy and business development, FTSE Russell said “We are pleased Vanguard has selected the FTSE Developed ex Australia ex Non-Renewable Energy/Vice Products/Weapons Index to offer investors a choice of aligning their values with their exposure to global equities. The index forms part of the FTSE Global Choice Index Series, and the comprehensive screening methodology helps meet continued demand for investment products that incorporate company impact on the society and the environment.”

Chris Hackel, Index Product Manager at Bloomberg said "As responsible investing continues to grow as a global theme, Bloomberg is committed to providing a comprehensive family of ESG-integrated fixed income benchmarks. We are pleased to work with Vanguard on this new ETF for fixed income ESG investors in Australia."

The new products will add to Vanguard Australia's diverse offering of index and active managed funds and ETFs, bringing the total number of fund offerings to 76, including 26 ETFs.

Fund NameBenchmarkManagement Expense Ratio
Equity
Vanguard Ethically Conscious International Shares Index Fund FTSE Developed ex Australia ex Non-Renewable Energy/Vice Products/Weapons Net Tax Index 0.20% pa
Vanguard Ethically Conscious International Shares Index Fund – AUD Hedged FTSE Developed ex Australia ex Non-Renewable Energy/Vice Products/Weapons 100% Hedged to AUD Net Tax Index 0.23% pa
Vanguard Ethically Conscious International Shares Index Fund – NZD Hedged FTSE Developed ex Australia ex Non-Renewable Energy/Vice Products/Weapons 100% Hedged to NZD Net Tax Index 0.26% pa
Vanguard Ethically Conscious International Shares Index ETF (ASX:VESG) FTSE Developed ex Australia ex Non-Renewable Energy/Vice Products/Weapons Net Tax Index 0.18% pa
Fixed Income
Vanguard Ethically Conscious Global Aggregate Bond Index Fund (Hedged) – AUD Hedged Bloomberg Barclays MSCI Global Aggregate ex SRI Exclusions Index hedged to Australian dollars 0.28% pa
Vanguard Ethically Conscious Global Aggregate Bond Index Fund (Hedged) – NZD Hedged Bloomberg Barclays MSCI Global Aggregate ex SRI Exclusions Index hedged to New Zealand dollars 0.28% pa
Vanguard Ethically Conscious Global Aggregate Bond Index (Hedged) ETF (ASX:VEFI) Bloomberg Barclays MSCI Global Aggregate ex SRI Exclusions Index hedged to Australian dollars 0.26% pa