ESG Fund Factsheet

For adviser use only

Vanguard Sustainable Life

Classification: Sustainable
Management style: Active

Introduction

Vanguards Sustainable Life funds are designed for investors who want to generate long-term growth from their investments, alongside the incorporation of sustainable investment criteria. There are three funds to choose from each designed to broadly meet a set risk-return profile.

The funds are managed in partnership with Wellington Management Company who have a long history of managing multi-asset funds in conjunction with Vanguard.

Name Launch Date IA Sector Portfolio OCF* Fund Size (m)
Vanguard SustainableLife 40-50% Equity 08/12/2021 Mixed Investment 20-60% Equity 0.48% £57.7
Vanguard SustainableLife 60-70% Equity 25/05/2016 Mixed Investment 40-85% Equity 0.48% £716.8
Vanguard SustainableLife 80-90% Equity 08/12/2021 Flexible Investment 0.48% £99.1

About Vanguard

Vanguard was founded in 1975 on a simple but revolutionary idea: that an investment company should manage it’s funds solely in the interests of it’s clients.

Rather than being publicly traded or owned by a small number of individuals, The Vanguard Group is owned by Vanguards US-domiciled funds, which in turn are owned by their investors.

Assets under management*

£874m

Total Assets in Sustainable Life Range:

*As at 10/11/2023

ESG Process

Vanguard Sustainable Life funds operate with four pillars of sustainability;

Net zero commitment: The managers have set a 2050 net zero commitment aligned to the Paris Agreement.

ESG Risk Avoidance: The fund managers implement a set of clear exclusions.

Engagement with Portfolio Companies: The fund managers engage with company management on ESG matters and promote net zero targets.

Good Governance Assessment: The companies in which the fund invests must follow good governance practices as a precondition for investment.

The fund managers work closely with dedicated ESG analysts who provide a quantitative rating on more than 8,500 companies on E, S and G factors as well as additional fundamental ratings for many of these, reflecting the differentiating perspectives on a company.

Fund managers can invest in securities which have ESG momentum behind them encompassing both companies with low ESG risks, as well as companies which have the potential to improve their ESG credentials.

Exclusion Policies

The Vanguard Sustainable Life funds have a clear set of exclusion criteria:

Nuclear weapons Involvement in Tobacco production.
Above 5% of revenue from oil sands Above 10% of revenue from thermal coal extraction
Controversial weapons Above 25% of revenue from tobacco distribution, retail or supply.
Above 30% of revenue from thermal coal power generation.

Cost

The OCF for each fund is 0.48% which is a very competitive figure for an actively managed multi-asset ESG fund range.

*based on a comparison of the average cost of a range of select multi asset active ESG funds

Investment Performance

Both the 40-50% Equity and the 80-90% equity funds have been in existence since December 2021 and as such have very short performance records, but the 60-70% equity fund came into being in 2016, however it’s name and strategy changed at the same time the other two funds were created and therefore only the performance since this point is relevant. Over the relevant period, all of the funds have outperformed their benchmarks (source FE Analytics).

Past performance is not a guide to future performance.

Platform availability

Vanguard Sustainable Life funds are available on the following platforms:

7IM AEGON ARC
AJ Bell M&G Wealth
Aviva AEGON
Abrdn Elevate Embark
Fidelity Hubwise
Transact Wealthtime
James Hay Nexus
Novia Nucleus
Parmenion Quilter
Raymond James Standard Life Wrap
Advance by Embark

Risk tools

Vanguard Sustainable Life funds are mapped to the following risk tools:

  • Dynamic Planner
  • Defaqto
  • Evalue
  • Oxford Risk
  • Finametrica
  • Synaptic

Tenet Opinion

Vanguards Sustainable Life range is significantly different to the very popular LifeStrategy range, employing an active investment strategy rather than the passive strategy Vanguard are more famous for. Despite this the costs remain very competitive for an active multi-asset fund when compared to funds that sit in a similar space.

The process employed by the fund covers a wide range of both qualitative and quantitative research, making use of negative screening, ESG scores, dedicated ESG analysts and active engagement with portfolio companies.

The fund may be suitable for clients who want to exclude certain ‘sin stocks’, as well as those who are looking to invest in a portfolio with better sustainable characteristics than the average fund and a fund manager who looks to actively engage with the members of the portfolio.

Information approved for Professional Adviser use only and should not be relied upon by private investors (this is not for Retail Clients).