Vanguard Group is also joining the growing group of socially responsible ETFs with the launch of its first two strategies that cover environmental, social and governance, or ESG, principles.
On Thursday, Vanguard rolled out the Vanguard ESG U.S. Stock ETF (NYSEArca: ESGV) and the Vanguard ESG International Stock ETF (NYSEArca: VSGX), which have a 0.12% and 0.15% expense ratio, respectively.
“Vanguard’s new ETFs can serve as core components of a portfolio for individuals, institutions, and advisors who wish to invest in broadly-diversified, low-cost ETFs screened for certain ESG criteria,” Matthew Brancato, head of Vanguard’s Portfolio Review Group, said in a note. “At the same time, investors should recognize that funds with ESG screens may perform differently than the broad market due to the exclusion of stocks of certain companies.”
The new ETFs cover more than 80% of the U.S. equity market capitalization and nearly 70% of the international equity market capitalization, with a focus on those companies that adhere to ESG principles.