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Vanguard Australia selects new FTSE Russell index for values-aligned ETF and index fund

  • FTSE Russell launches new FTSE Global Choice Index Series
  • Indexes help investors align their values with investments using ‘building block’ approach to allow for creation of customised solutions
  • Clear and simple exclusion methodology screens stocks according to social and environmental impacts
  • FTSE Developed ex Australia ex Non-Renewable Energy/Vice Products/Weapons Index selected by Vanguard Australia
  • Tracked by the Vanguard Ethically Conscious International Shares Index Fund and ETF
  • c.$650 billion ETF AuM linked to all FTSE Russell indexes globally


FTSE Russell, the global index provider, is delighted to announce that Vanguard Australia has licenced a new values-aligned index for two ESG-related investment products. The FTSE Developed ex Australia ex Non-Renewable Energy/Vice Products/Weapons Index forms part of the new FTSE Global Choice Index Series. It is the first FTSE Russell standard index family to incorporate several categories of ESG-related exclusions in its design. Increasingly, investors are looking to exclude stocks from their portfolios based on the impact of companies’ products and conduct on society and the environment. In addition to the standard index family, clients can construct bespoke ‘Choice’ indexes using an innovative ‘building blocks’ approach, to customise alignment with their particular values and investment objectives.

The FTSE Developed ex Australia ex Non-Renewable Energy/Vice Products/Weapons Index has been chosen by Vanguard Investments Australia for its new Vanguard Ethically Conscious International Shares Index Fund, and for its Vanguard Ethically Conscious International Shares Index Fund ETF (ticker: VESG). These new funds are expected to list on the Australia Securities Exchange in September 2018. The index fund and Exchange Traded Fund (ETF) are part of a new range of ESG-focused equity and bond products being issued in Australia and the US by the firm. Vanguard Australia is the largest provider of ETFs by AuM in Australia and has 24 ETFs with A$11.5 billion in funds under management, as of 31 July 2018.

The index methodology screens stocks in nine product involvement categories. The transparent, rules-based construction reflects the performance of eligible securities from the FTSE Developed ex Australia Index, excluding companies based on their business lines and product involvement in fossil fuels, nuclear power, adult entertainment, alcohol, gambling, tobacco, and weapons.

Evan Ong, Managing Director, Asia ETP and listed derivatives strategy and business development, FTSE Russell, said:  
“We are delighted that Vanguard Australia has selected our index for its latest ESG index fund and ETF. This new values-based index forms part of the FTSE Global Choice Index Series and helps meet the growing demand for integrating ESG preferences into investments. ESG-focused indexes constructed using our innovative ‘building block’ approach allow clients to align their values with their portfolios. We expect to see further iterations of new indexes being developed within the Index Series.”

Evan Reedman, Head of Product and Marketing, Vanguard Australia said:
“The adoption of ESG investing has accelerated in recent years, and more investors are looking for opportunities to align their investment choices with their values. Our new index fund and ETF marries Vanguard’s characteristic low-cost, diversified investment approach with a rigorous ESG screening process.”

The FTSE Developed ex Australia ex Non-Renewable Energy/Vice Products/Weapons Index is part of FTSE Russell’s extensive sustainable investment index and data offering which includes the Smart Sustainability indexes, FTSE4Good indexes, Green Revenues data model and ESG Ratings. London Stock Exchange Group is a pioneer in supporting the growing global green and sustainable financing movement, providing a comprehensive green and sustainable product offering.

Further information can be found online at the FTSE Global Choice Index Series page.

*Industry Classification Benchmark, is a globally recognised standard, operated and managed by FTSE Russell for categorising companies and securities across four levels of classification. 

For further information:
Lucie Holloway/ Alex Ritterman
+44 20 7797 1222
newsroom@lseg.com 

Regional Contacts:
Sydney: Laura McCrackle - +61 2 8823 3526
Tokyo: Toshi Okada - +81 3 3581 3443
Hong Kong: Fennie Wong - +852 2164 3267
 

Notes to editors:

About FTSE Russell:

FTSE Russell is a leading global index provider creating and managing a wide range of indexes, data and analytic solutions to meet client needs across asset classes, style and strategies. Covering 98% of the investable market, FTSE Russell indexes offer a true picture of global markets, combined with the specialist knowledge gained from developing local benchmarks around the world.

FTSE Russell index expertise and products are used extensively by institutional and retail investors globally. Approximately $16 trillion is currently benchmarked to FTSE Russell indexes. For over 30 years, leading asset owners, asset managers, ETF providers and investment banks have chosen FTSE Russell indexes to benchmark their investment performance and create investment funds, ETFs, structured products and index-based derivatives. FTSE Russell indexes also provide clients with tools for asset allocation, investment strategy analysis and risk management.

A core set of universal principles guides FTSE Russell index design and management: a transparent rules-based methodology is informed by independent committees of leading market participants. FTSE Russell is focused on index innovation and customer partnership applying the highest industry standards and embracing the IOSCO Principles. FTSE Russell is wholly owned by London Stock Exchange Group.

For more information, visit www.ftserussell.com

© 2018 London Stock Exchange Group plc and its applicable group undertakings (the “LSE Group”). The LSE Group includes (1) FTSE International Limited (“FTSE”), (2) Frank Russell Company (“Russell”), (3) FTSE TMX Global Debt Capital Markets Inc. and FTSE TMX Global Debt Capital Markets Limited (together, “FTSE TMX”), (4) MTSNext Limited (“MTSNext”), (5) Mergent, Inc. (“Mergent”), (6) FTSE Fixed Income LLC (“FTSE FI”) and (7) The Yield Book Inc. (“YB”). All rights reserved.

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