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Financial management

Invest in companies looking to make an impact

Looking for an ESG fund that has the possibility of performing well and making an impact? Exciting news: We’re expanding our relationship with Baillie Gifford to bring a new—and different—stock fund.
2.5 minute read
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July 18, 2022
Financial management
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ESGs

Looking for an ESG fund that has the possibility of performing well and making an impact? Exciting news: We’re expanding our relationship with Baillie Gifford to bring investors a new—and different—stock fund.


Vanguard Baillie Gifford Global Positive Impact Stock Fund has 2 goals:

  • Outperform its benchmark over the long term.
  • Support measurable positive change in the world.

These 2 goals support Vanguard’s belief that investors can meet their financial goals and invest according to their values.

Real impact

The Positive Impact Fund invests in companies that the fund's advisor determines contribute toward a more sustainable and inclusive world. The intended outcome is a portfolio of between 25 and 50 growth companies with the potential to outperform the benchmark over the long term, and which the portfolio managers consider to have core ambitions of delivering a positive change in at least one of the following areas:

Social inclusion and education

Environment and resource needs

Health care and quality of life

Base of the pyramid

Social inclusion and education

Companies that (i) contribute to a more inclusive society through business practices, products or services, or (ii) are improving the quality or accessibility of education.

Environment and resource needs

Companies committed to improving resource efficiency and reducing the environmental impact of society’s economic activities.

Health care

Companies that are actively improving quality of life in developed and developing countries.

Base of the pyramid

Companies that are addressing the basic and aspirational needs of the world’s poorest populations.

Investors in the fund will receive annual impact reports detailing tangible examples of the positive impact the companies have made.

Expert management

The existing Baillie Gifford Global Positive Change Equities Fund has been reorganized into the Positive Impact Fund. Since its inception in 2017, the Baillie Gifford Fund has built an impressive track record and delivered exceptional returns compared to its benchmark:

The fund performance shown below is the performance of the Baillie Gifford Positive Change Equities Fund (the predecessor fund), the performance predecessor to the fund, as a result of a reorganization of the predecessor fund into the fund (the Reorganization). The predecessor fund was managed using investment policies, objectives, guidelines, and restrictions that were substantially similar to those of the fund. Prior to the Reorganization, the fund had not yet commenced operations. The table below shows how the performance of the Class K shares of the predecessor fund has varied from one calendar year to another over the periods shown, and how the average annual total returns of the Class K shares of the predecessor fund compare with those of a relevant market index. Keep in mind that the fund’s (and the predecessor fund’s) past performance (before and after taxes) does not indicate how the fund will perform in the future.

  Annualized total returns Expense ratio
  1-Yr. 3-Yr. S.I.1 N/A
Vanguard Baillie Gifford Global Positive Impact Stock Fund2 –38.20% 15.25% 12.83% 0.59%
MSCI ACWI Index –20.18% 6.21% 5.61% N/A

Source: Bank of New York Mellon and relevant underlying index provider(s) (as of 6/30/2022). 

The performance data shown represent past performance, which is not a guarantee of future results. Investment returns and principal value will fluctuate, so investors' shares, when sold, may be worth more or less than their original cost. The performance of an index is not an exact representation of any particular investment, as you cannot invest directly in an index. Current performance may be lower or higher than the performance data cited. For performance data current to the most recent month-end, visit our website at vanguard.com/performance.

Vanguard Baillie Gifford Global Positive Impact Stock Fund2

Annualized total returns
1-Yr.: –38.20%
3-Yr.: 15.25%
S.I.1: 12.83%

Expense ratio
0.59%

MSCI ACWI Index

Annualized total returns
1-Yr.: –20.18%
3-Yr.: 6.21%
S.I.1: 5.61%

Expense ratio
N/A

Source: Bank of New York Mellon and relevant underlying index provider(s) (as of 6/30/2022). 

The performance data shown represent past performance, which is not a guarantee of future results. Investment returns and principal value will fluctuate, so investors' shares, when sold, may be worth more or less than their original cost. The performance of an index is not an exact representation of any particular investment, as you cannot invest directly in an index. Current performance may be lower or higher than the performance data cited. For performance data current to the most recent month-end, visit our website at vanguard.com/performance.

Source: Bank of New York Mellon and relevant underlying index provider(s) (as of 3/31/2022). 

The Baillie Gifford fund managers have established themselves as deeply skilled in impact investing by identifying successful companies that meet ESG criteria and make a positive global impact. This partnership enables us to offer our sixth ESG fund and our first ESG impact fund while building on our relationship with Baillie Gifford.

“We’ll continue to thoughtfully expand our ESG lineup, introducing funds and ETFs with enduring investment merit that reflect clients’ needs and preferences,” said Vanguard Chairman and CEO Tim Buckley. “The new 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.”

The value in active

Active funds have been a part of our history since 1975; our active approach is designed to deliver strong long-term performance that ultimately drives better investor outcomes.

An active fund such as the Positive Impact Fund could be a great addition to an already diversified portfolio of an investor with a higher risk tolerance. Since the Positive Impact Fund is a highly concentrated, high-risk fund, we consider it to be an addition to a balanced portfolio, rather than a core holding.

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1Inception date: December 14, 2017.

2On July 18, 2022, the Baillie Gifford Positive Change Equities Fund (Predecessor Fund), was reorganized into the Vanguard Baillie Gifford Global Positive Impact Stock Fund (Vanguard Fund). Historical performance information prior to July 18, 2022, is representative of the Predecessor Fund and is included in the Vanguard Fund’s performance history. The Predecessor Fund's inception date is December 14, 2017. Baillie Gifford Overseas Limited serves as the sole advisor to the Vanguard Fund.

All investing is subject to risk, including the possible loss of the money you invest.

For more information about Vanguard funds or Vanguard ETFs, obtain a mutual fund or an ETF prospectus or, if available, a summary prospectus. Investment objectives, risks, charges, expenses, and other important information are contained in the prospectus; read and consider it carefully before investing.

You must buy and sell Vanguard ETF Shares through Vanguard Brokerage Services (we offer them commission-free) or through another broker (which may charge commissions). See the Vanguard Brokerage Services commission and fee schedules for full details. Vanguard ETF Shares are not redeemable directly with the issuing fund other than in very large aggregations worth millions of dollars. ETFs are subject to market volatility. When buying or selling an ETF, you will pay or receive the current market price, which may be more or less than net asset value.

ESG funds are subject to ESG investment risk, which is the chance that the stocks or bonds screened by the index provider for ESG criteria generally will underperform the market as a whole or, in the aggregate, will trail returns of other funds screened for ESG criteria. The index provider’s assessment of a company, based on the company’s level of involvement in a particular industry or the index provider’s own ESG criteria, may differ from that of other funds or of the advisor’s or an investor’s assessment of such company. As a result, the companies deemed eligible by the index provider may not reflect the beliefs and values of any particular investor and may not exhibit positive or favorable ESG characteristics. The evaluation of companies for ESG screening or integration is dependent on the timely and accurate reporting of ESG data by the companies. Successful application of the screens will depend on the index provider’s proper identification and analysis of ESG data. The advisor may not be successful in assessing and identifying companies that have or will have a positive impact or support a given position. In some circumstances, companies could ultimately have a negative impact, or no impact.