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ESG

Vanguard taps Wellington as subadviser for first actively managed ESG fund

Vanguard Group hired Wellington Management as the subadviser for its first actively managed environmental, social and governance fund, the $5.2 trillion asset manager announced Thursday.

Vanguard Global ESG Select Stock Fund is expected to be available for investment in mid-2019 and will join its growing lineup of low-cost indexed ESG offerings, a news release said. Vanguard also on Thursday filed a registration statement for the fund with the SEC.

Vanguard said its active ESG fund will aim to outperform the FTSE All-World index, a global benchmark covering a majority of developed and emerging markets. Wellington would select about 40 companies with long-standing ESG practices and also would be responsible for related governance activities for the fund, such as integrating proxy voting and company engagements into the investment strategy, the news release said.

Wellington portfolio managers Mark D. Mandel and Yolanda C. Courtines, who are both senior managing directors and partners at the firm, will manage the fund. Mr. Mandel also is a vice chairman at the firm.

The new fund would complement Vanguard's existing lineup of index-based ESG funds: the $4.8 billion Vanguard FTSE Social Index Fund, which was introduced in 2000; and the $110 million Vanguard ESG International Stock ETF and $146 million Vanguard ESG U.S. Stock ETF, both of which launched last year.

Vanguard's actively managed ESG fund would have expense ratios of 0.45% and 0.55% for Admiral and Investor shares, respectively, the news release said.

A Wellington spokeswoman declined to comment.