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Vanguard files for two new ESG ETFs

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Vanguard has filed a preliminary registration statement with the Securities and Exchange Commission for Vanguard ESG Stock ETF and Vanguard ESG International Stock ETF.

The new ETFs, which will complement Vanguard’s existing FTSE Social Index Fund, are expected to begin trading in September 2018.
 
Vanguard ESG Stock ETF will seek to track the FTSE US All Cap Choice Index, a market-cap weighted benchmark comprising large-, mid-, and small-cap stocks screened on specific environmental, social, and governance criteria. Vanguard ESG International Stock ETF’s target benchmark will be the FTSE Global All Cap ex US Choice Index, a market-cap weighted benchmark comprising large-, mid-, and small-cap stocks in developed and emerging international markets (excluding the ) screened on specific environmental, social, and governance criteria. The estimated expense ratios for the new ETFs are 0.12 per cent and 0.15 per cent, respectively, making them among the lowest-cost ESG offerings available to investors.
 
“The adoption of ESG investing has accelerated in recent years, and more investors are looking for opportunities to align their investment choices with their values,” says Jon Cleborne, head of Vanguard’s Portfolio Review Group. “Our new ETFs marry Vanguard’s characteristic low-cost, diversified investment approach with a rigorous ESG screening process.”
 
In the development of the benchmarks, FTSE screens its broad domestic and international stock indexes and excludes stocks of companies in the following industries: adult entertainment, alcohol, tobacco, weapons, fossil fuels, gambling, and nuclear power. The construction methodology also screens the stocks of companies that do not meet certain diversity criteria as well as labour, human rights, anti-corruption and environmental standards defined by the UN global compact principles.
 
Vanguard’s Equity Index Group will serve as the investment advisor for both ETFs. The Equity Index Group manages more than USD3.1 trillion in assets across the globe, and draws on the diverse perspectives and knowledge of more than 75 team members to help deliver accurate benchmark tracking, prudent risk management, and highly competitive investment performance. 

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