Vanguard adds active fund to ESG suite

Yasmine Raso

Senior Journalist, Financial Newswire

19 October 2022

Vanguard Australia has today announced the launch of the Vanguard Active Positive Impact Fund, the latest global equity addition to its environmental, social and governance (ESG) and Active fund range.

The fund aims to outperform the wider global equities market by holding securities for at least five years, aligning with the firm’s long-term investment approach and also having a “measurable” impact on global environmental and social issues.

“We are thoughtfully broadening our ESG line-up with solutions that enable investors to align investment objectives with personal preferences and ESG considerations,” Evan Reedman, Head of Product at Vanguard Australia, said.

“Australian investors are increasingly weighing ESG factors alongside more traditional considerations such as risk and return. This fund allows investors to target positive impact alongside financial outperformance.

“Impact investing, an investing style targeting a dual objective of generating long term returns and a positive social or environmental outcome, requires creativity and patience.”

The investment manager appointed Baillie Gifford to also manage the fund.

“Core to our philosophy is a belief that investment returns, and impact go hand in hand. In seeking out companies whose products and services are providing solutions to global challenges, we believe a proactive investment approach can also be the basis of attractive investment returns,” Rosemary Shannon, Head of Australia for Baillie Gifford, said.

“Everyone wants to make a difference, and capital thoughtfully and responsibly deployed is a powerful mechanism for change.”

The Vanguard Active Positive Impact Fund also takes the firm’s ESG product suite up to three exchange traded funds (ETFs) and five managed funds.

“Our suite of ESG index products include exclusionary-screened equity and fixed income index funds and ETFs which serve investors who want to avoid or reduce exposure to certain sectors or business-related activities that pose heightened ESG-related risks or conflict with their personal values,” Reedman said.

“Vanguard believes that an active approach to impact investing enables skilled managers to better navigate the complexities of identifying companies driving positive change to build a portfolio with the potential to deliver on outperformance and impact objectives.”