esg investing at vanguardmar 31, 2019 · for more information about vanguard funds, to obtain a...
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ESG investing at VanguardLearn more about ESG investing and Vanguard’s
suite of ESG products—active and index
For financial advisor and institutional use only.
ESG integration
Systematic inclusion of financially material ESG information (risks and opportunities) to complement standard investment analysis.
Currently employed by Vanguard.ESG integration
ESG
Investment stewardship
The use of shareholder power to influence corporate behavior, including direct corporate engagement, and proxy voting.
We believe that good governance and effective stewardship can add value over the long term for all shareholders. Vanguard’s Investment Stewardship program remains grounded in our four principles of good governance: board composition, oversight of strategy and risk, executive compensation,and governance structures.
What is ESG investing?
Environmental, social, and corporate governance (ESG) is an investment-related activity
that accounts for some type of ESG consideration.
Investment screening
The inclusion in or exclusion from a portfolio of certain sectors, companies, or practices based on specific ESG criteria or minimum standards of practice (norms-based).
Currently employed by Vanguard.
Screening
Impact investing
Targeting specific social or environmental outcomes alongside financial returns, either through private or public investments.
Not currently employed by Vanguard.
Impact investing
ESG integration/Active Wellington Management Company LLC votes proxies for ESG portfolio securities.
Vanguard Global ESG Select Stock Fund
Admiral shares: VESGX Investor shares: VEIGX
• No front-end exclusionary screen
• Bottom-up security selection utilizing proprietary investment and ESG research analyst teams at Wellington Management Company
• Seeks companies that have both fundamental investment characteristics and leading ESG practices
• Wellington actively engages with management teams of companies in which it invests
• Long-term and low turnover
• Highly selective, concentrated portfolio
• Lower volatility and beta with defensive investment profile relative to FTSE All-World Index
• May own companies in sectors traditionally excluded by screening approaches (i.e., energy)
Actively managed global large-cap fund
Number of holdings: 40–50
Admiral expense ratio: 0.45% Investor expense ratio: 0.55%
Vanguard’s ESG product lineup
ESG screening/Index Vanguard votes proxies for ESG portfolio securities.
FTSE Social Index Fund
Admiral™ shares: VFTAX
Excludes:
• Alcohol, tobacco, gambling, and adult entertainment
• Civilian, controversial, and conventional weapons
• Nuclear power
• Gender diversity and equal opportunity challenges
• Human rights, labor, or environmental controversies
Market-cap-weighted U.S. mid- and large-cap index
Number of holdings: approx. 500
Expense ratio: 0.14%
ESG U.S. Stock ETF
ESGV
Excludes:
• Alcohol, tobacco, gambling and adult entertainment
• Civilian, controversial, and conventional weapons
• Nuclear power
• Fossil fuel companies (oil, gas, and coal)
• Companies involved in corruption controversies
• Gender diversity and equal opportunity challenges
• Violations of labor rights, human rights, and environmental issues as defined by UN Global Compact Principles*
Market-cap-weighted U.S. all-cap index
Number of holdings: approx. 1,500
Expense ratio: 0.12%
ESG International Stock ETF
VSGX
Excludes:
• Alcohol, tobacco, gambling and adult entertainment
• Civilian, controversial, and conventional weapons
• Nuclear power
• Fossil fuel companies (oil, gas, and coal)
• Companies involved in corruption controversies
• Gender diversity and equal opportunity challenges
• Violations of labor rights, human rights, and environmental issues as defined by UN Global Compact Principles*
Market-cap-weighted international all-cap index
Number of holdings: approx. 3,000
Expense ratio: 0.15%
* For more information, go to unglobalcompact.org/what-is-gc/mission/principles
© 2019 The Vanguard Group, Inc. All rights reserved. Vanguard Marketing Corporation, Distributor of the Vanguard Funds.
U.S. Pat. Nos. 6,879,964; 7,337,138; 7,720,749; 7,925,573; 8,090,646; and 8,417,623.
INPESGOP 052019
P.O. Box 2900Valley Forge, PA 19482-2900
Connect with Vanguard® > vanguard.com
Financial advisors should visit advisors.vanguard.com or call 800-997-2798.
Institutional investors should visit institutional.vanguard.com or call 800-523-1036.
For more information about Vanguard funds, to obtain a prospectus or, if available, a summary prospectus, contact Vanguard using the information provided below. Investment objectives, risks, charges, expenses, and other important information about a fund are contained in the prospectus; read and consider it carefully before investing.
Vanguard ETF Shares are not redeemable with the issuing Fund other than in very large aggregations worth millions of dollars. Instead, investors must buy and sell Vanguard ETF Shares in the secondary market and hold those shares in a brokerage account. In doing so, the investor may incur brokerage commissions and may pay more than net asset value when buying and receive less than net asset value when selling.
All investing is subject to risk, including possible loss of principal. Expense ratio data are as of March 31, 2019.