Abhi Mathews CBV CFA Blog | Vanguard files for two ETFs with ESG focus | Talkmarkets

Abhi Mathews CBV CFA

Director - Valuations & Litigations at RSM

Abhi Mathews is a director at RSM in the Valuations team. Prior to that, Mr. Mathews spent the last 11 years working at several valuation firms, investment banks, and advisory firms. In this span, he has assisted in raising or advising on over $400 million in capital for public and private ... more

Vanguard files for two ETFs with ESG focus

Date: Friday, June 29, 2018 4:35 AM EDT


By ETFHeatMap team

Vanguard filed a preliminary registration statement with the SEC for two exchange-traded funds to complement its existing environmental, social and governance (ESG) mutual fund. Many funds are avoiding the sin industries (alcohol, tobacco, weapons, adult entertainment, gambling, and recreational drugs) and turning their focus towards greener pastures.

Vanguard’s FTSE Social Index Fund has beaten the S&P 500 and the Russell 1000 over the trailing 10-year period, returning 10.6% on an annualised basis. Naturally, they launched another couple to add to their current mix. The two new funds, the Vanguard ESG U.S. Stock ETF and the Vanguard ESG International Stock ETF, will join Vanguard’s FTSE Social Index Fund; Both will begin trading in September and add to Vanguard’s large arsenal of ETF products.

The Vanguard ESG U.S. Stock ETF will seek to track the FTSE US All Cap Choice Index, a market-cap weighted benchmark comprising large-, mid-, and small-cap U.S. stocks screened on specific environmental, social, and governance criteria.

Vanguard isn’t alone in offering ESG-focused ETFs. In May, Merrill Lynch announced the five portfolios that incorporate ESG factors in the mix. Merrill said at the time that the new investment portfolios were designed by the Global Wealth and Investment Management (GWIM) chief investment officer and incorporate the CIO’s investment process, portfolio construction views, portfolio management and oversight routines.

The green theme appears to be on a rise with one of the two ETF industry leaders, Vanguard, taking notice and setting sail.


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