Vanguard launches Vanguard ESG U.S. Corporate Bond ETF

By Taylor Fox

New York, Sept. 24 – Vanguard launched the Vanguard ESG U.S. Corporate Bond ETF, the company’s first ESG-focused fixed-income product for U.S. investors today, according to a news release.

The fund expands Vanguard’s current index-and-actively-managed ESG offerings.

As previously reported, the ETF will have an estimated expense ratio of 0.12% and seek to track the Bloomberg Barclays MSCI US Corporate SRI Select index, a rules-based index that captures a broad cross-section of the U.S. corporate bond market and screens out the bonds of companies whose activities that do not meet specific ESG criteria.

The exclusionary screening process includes removing bonds of companies that are involved in or derive threshold amounts of revenue from activities related to gas, genetically modified organisms, oil and thermal coal businesses; vices like adult entertainment, alcohol, gambling and tobacco; and weaponry or warfare-related segments like civilian firearms, nuclear, controversial and conventional weapons and nuclear power.

In addition, Bloomberg and MSCI will exclude bonds of companies that do not meet certain diversity criteria or standards regarding ESG controversies linked to environmental impact, labor rights, human rights and community impact.

Vanguard’s fixed income group will act as the fund’s adviser. Josh Barrickman, principal, senior portfolio manager and head of Vanguard fixed income indexing Americas, will manage the ETF.

Vanguard is a Valley Forge, Pa.-based investment management company and provider of company-sponsored retirement plan services.

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