The flow of money to the impact investing space just got stronger with the announcement that Vanguard filed an initial registration statement with the SEC to introduce Vanguard Baillie Gifford Global Positive Impact Stock Fund.
“Impact investing a dual-mandate strategy in which portfolio managers target companies that will generate returns as well as positive social and/or environmental impact.”
The fund is designed to “meet the needs of investors seeking actively managed global equity returns along with measurable impact on environmental and social challenges.”
It’s expected to launch in the second quarter of 2022 and subsequently seek to adopt the existing Baillie Gifford Positive Change Equities Fund, contingent upon shareholder approval. Vanguard expects to make the combined fund available for public investment in the third quarter.
“We’ll continue to thoughtfully expand our ESG lineup, introducing funds and ETFs with enduring investment merit that reflect clients’ needs and preferences,” Vanguard Chairman and CEO Tim Buckley said in a statement. “The new Global Positive Impact Stock Fund will tap Baillie Gifford’s significant expertise in fundamental equity research and impact analysis, helping our clients to achieve both their impact and investment goals.”
Vanguard describes impact investing as a dual-mandate investment strategy in which portfolio managers target companies that will generate returns as well as positive social and/or environmental impact.
The company said it believes an active approach to impact investing enables skilled managers to better navigate the complexities of identifying companies driving positive change and build a portfolio with the potential to deliver on both excess return and impact objectives.
“We hope that this fund adoption will broaden access to impact investing at a very competitive cost,” said Andrew Telfer, Baillie Gifford Joint Senior Partner. “As a result, it should help to channel more capital towards companies driving positive change.”
Current shareholders of the Positive Change Equities Fund are expected to realize an expense ratio reduction of approximately 0.06%. With an estimated expense ratio of 0.59%, the new Vanguard fund will be favorably priced compared to similar funds in its category, which have an average expense ratio of 1.49%, the company concluded.
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