New Vanguard launches include four sustainable, actively managed funds

8 December 2021

Vanguard has launched four sustainable, actively managed funds, designed for investors aiming to achieve sustainable returns, in a manner that aligns with their values.

The new Vanguard SustainableLife range is a set of three all-in-one sustainable multi-asset portfolios consisting of the Vanguard SustainableLife 40-50% Equity Fund, the Vanguard SustainableLife 60-70% Equity Fund, and the Vanguard SustainableLife 80-90% Equity Fund.

The funds invest in equities and bonds from around the world and are designed as a core solution for investors looking to generate sustainable long-term growth. They carry an ongoing charges figure (OCF) of 0.48%[1].

The range will be managed by Wellington Management Company LLP, a manager experienced in integrating ESG considerations into its investment processes.

Vanguard said the range has a strict investment philosophy, which considers not just the investment potential, but also the environmental, social and governance characteristics of each company the funds invest in.

Central to this approach are four sustainability principles, namely, a commitment to net zero emissions by 2050 in alignment with the Paris agreement, exclusion of companies that may have a negative impact on society and the environment (e.g., thermal coal, tar sands, tobacco), engagement with portfolio companies on material ESG issues, and the requirement for companies to follow good governance practices as a precondition for investment.

Vanguard has Laos launched a Global Sustainable Equity Fund, an actively managed equity fund that provides UK investors with exposure to global companies, while actively incorporating sustainable investment criteria to better align with investor values and help reduce ESG-related risks. 

The fund is also managed by Wellington, has a commitment to net zero emissions by 2050 and carries an OCF of 0.48%.

Fong Yee Chan, head of ESG Strategy, Europe, Vanguard, said the launch represents Vanguard’s “commitment to helping investors balance their personal values with their financial goals as interest in sustainable investing continues to grow.

“At Vanguard, we integrate ESG considerations into our investment processes and product design in three key ways. We engage with the companies in which we invest through our investment stewardship activities. We offer funds that allow investors to avoid certain ESG risks, and, thirdly, we allocate capital to companies based on certain sustainability criteria in our new actively managed funds, with the aim to outperform the market.”

[1] The ongoing charges figure (OCF) covers management fees and service costs such as administration, audit, depository, legal registration  and regulatory expenses incurred in respect of the funds.

Professional Paraplanner