Vanguard has announced the formation of the Vanguard Global Environmental Opportunities Stock Fund.

The actively managed fund will invest in a concentrated portfolio of companies that are both participating in the decarbonisation process and generating at least half of their revenue from activities that the fund's advisor believes contribute favourably to environmental change. 

Ninety One, an experienced active investment manager with a track record in environmental, decarbonisation, and global investing will handle the fund.

Dan Reyes, head of the Vanguard Portfolio Review Department, said: 

"Vanguard has been thoughtful and deliberate in building out our ESG lineup by ensuring each new fund addresses investors’ enduring needs. We are confident that Ninety One's differentiated approach to global ESG investing will add long-term value for risk-tolerant investors who have a preference for environmental investing.”

Ninety One manages $160 billion worldwide. The Global Environmental Opportunities Stock Fund adopts a disciplined, research-driven approach to investing in low-carbon firms. Ninety One's investing philosophy is based on the belief that regulatory, technological, and consumer factors are driving a multi-decade energy shift. The firm believes companies that handle this transformation will create long-term investor value.

The fund is intended for environmentally conscious investors with a high-risk tolerance who want to add a satellite investment to a broadly diversified portfolio. The fund, which is slated to start in the fourth quarter of 2022, will have a competitive expense ratio of 0.75% for Investor Shares and 0.60% for Admiral Shares, compared to the industry average of 0.99% for comparable funds. The minimum investment in the fund is $3,000 for Investor Shares and $50,000 for Admiral Shares.

Vanguard has a systematic, research-based approach to product creation and methodically developed its array of ESG products, offering funds and ETFs that demonstrate long-term investing potential while catering to customers' changing preferences.

Vanguard's existing ESG lineup, which includes two actively managed ESG funds, will be supplemented by the new fund. The newly established Vanguard Baillie Gifford Global Positive Impact Stock Fund is intended for clients seeking a strategy that combines investment and impact goals. 

The Vanguard Global ESG Select Stock Fund is designed for investors who seek to optimise profits while increasing their exposure to companies with appealing ESG attributes. Vanguard also provides exclusionary-screened index stock and fixed income ETFs for investors who want to avoid or decrease their portfolio's exposure to specific sectors or ESG risks.

Source: Vanguard

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