New Vanguard impact fund

By Penny Pryor

Vanguard has launched the Vanguard Active Positive Impact Fund, which is managed by UK-based Baillie Gifford. The fund invests in a portfolio of 25 to 50 global companies that focus on positive impact in areas like social inclusion and education, healthcare and quality of life, and environment.

"The fund also aims to contribute towards a more sustainable and inclusive world by investing primarily in the equities of companies whose products and/or services make a positive social or environmental impact," Vanguard says in the fund's product disclosure statement.

The fund also restricts investments relating to how companies meet certain ESG criteria e.g. those involved in tobacco related products and nuclear weapons.

The investment manager applies an impact screen independently of the investment screen. The impact screen assesses whether particular companies contribute to one of the positive impact themes linking the contribution with the United Nations Sustainable Development Goals. A report is published each year outlining the outcomes of these impact assessments on investments.

The fund also aims to hold stocks for at least five years and says that results in generally low portfolio turnover.

It is an actively managed fund and aims to outperform the MSCI All Country World Index (with net dividends reinvested) in Australian dollars. It has a management fee of 0.79 per cent.