Vanguard has added a fifth fund to its Ucits ESG roster with the launch of an all cap global equity exchange traded fund as the firm plays catch-up in the responsible investing arena.
The Dublin-domiciled Vanguard ESG Global All Cap Ucits ETF has an OCF of 0.24% and will track the FTSE Global All Cap Choice Index. The index excludes companies involved in weapons, non-renewable energy, vice products and those that do not meet the UN Global Compact Principles.
Vanguard said the ETF is designed to “serve as a core building block for ESG-aware portfolios” and will be managed by its equity index group, which manages more than $4.8trn (£3.5trn) in assets.
Vanguard head of ESG strategy Fong Yee Chan said that its further expansion into ESG addresses client demand as “many want to put their money to work in a way that enables them to mitigate certain ESG-related risks, aligns with their values and meets their investment goals”.
Vanguard was late to the party in terms of profiting from the ESG trend. The asset manager launched a dual ESG offering last June, with the Vanguard ESG Developed World All Cap Equity Index and the Vanguard ESG Emerging Markets All Cap Equity fund, nearly 10 years after the launch of its SRI European Stock fund.
Willis Owen head of personal investing Adrian Lowcock said “for a group the size of Vanguard their range of ESG offerings might seem low at first glance” but that “it is more important to get the approach right and have relevant offerings than it is to have large range of options available”.
He added: “The ESG trend is a long term one, so does not need to be rushed.”
Morningstar research last year found that Vanguard’s ESG commitment level was ‘low’, while a report by Reclaim Finance revealed last month that Vanguard was the world’s largest institutional investor in the coal industry, with holdings of almost $86bn across 222 companies that produce or burn coal.
