Vanguard Group plans to start its first set of exchange-traded funds that invest using environmental, social and governance criteria.
The company filed with the Securities and Exchange Commission to create a U.S. stock ETF and an international stock ETF that will screen for ESG factors, according to a statement Wednesday. The firm has an existing mutual fund tied to such strategies, the $4.4-billion Vanguard FTSE Social Index Fund, that was launched in 2000. That fund has gained 3.5 per cent this year, trailing 89 per cent of peers, according to data compiled by Bloomberg.
The new ETFs, which are expected to begin trading in September, will exclude investments in a variety of industries, including alcohol, tobacco, weapons, fossil fuels and nuclear power, the Valley Forge, Pennsylvania-based company said in the statement. Vanguard, the second-biggest U.S. provider of ETFs, manages $5.1-trillion.
BlackRock Inc., the world’s largest asset manager, announced plans earlier this year to start two ETFs that exclude producers and big retailers of civilian firearms. The move followed a high school shooting in February that reignited the debate around gun control.