Vanguard Australia expands ESG line-up with actively managed positive impact fund
MELBOURNE, 18 October: Vanguard Australia today launched the Vanguard Active Positive Impact Fund, expanding its ESG and Active line-up to include a global equity fund seeking to outperform the broad global equities market while having a measurable impact on global environmental and social challenges.
Vanguard has appointed Baillie Gifford to manage the fund given their consistent framework for identifying high-quality growth companies that are driving solutions to global issues, as well as their significant expertise in fundamental equity research.
Evan Reedman, Head of Product at Vanguard Australia, said Vanguard continues to seek ways to deliver high quality and enduring ESG strategies to investors.
“We are thoughtfully broadening our ESG line-up with solutions that enable investors to align investment objectives with personal preferences and ESG considerations,” Mr Reedman 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. We believe Baillie Gifford's diverse team and commitment to thinking in decades rather than quarters is well suited to this style of investing.”
Baillie Gifford actively manages the portfolio of typically 25 to 50 global companies seeking long-term outperformance and positive impact in areas including: Social Inclusion and Education, Healthcare and Quality of Life, Environment and Resource Needs and Base of the Pyramid (addressing needs of the world’s poorest populations).
The fund aims to hold securities for at least five years, which generally results in relatively low portfolio turnover and is in line with the Fund’s long-term investment outlook.
Rosemary Shannon, Head of Australia for Baillie Gifford said:
“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. Everyone wants to make a difference, and capital thoughtfully and responsibly deployed is a powerful mechanism for change.”
Globally, Vanguard has been offering ESG products for over 20 years. With the launch of the Vanguard Active Positive Impact Fund, Vanguard Australia’s ESG product range now includes three 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,” said Mr Reedman.
“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”.
The new fund will soon be available to investors on the Vanguard Personal Investor platform for a low management fee of 0.79%, compared to similar funds in its category. Vanguard will list the Fund on third party platforms in due course.
The new product adds to Vanguard Australia's diverse offering of index and actively managed funds and ETFs, bringing the total number of fund offerings to 80, including 27 ETFs.