The majority of Vanguard’s active equity funds are managed by external firms. This approach provides us with diversity of thought and broader access to top talent. Each firm has its own philosophy and process, and many consider ESG factors when selecting securities.
Vanguard’s Oversight and Manager Search team is responsible for monitoring the external managers’ performance. As part of that oversight, the team reviews the external managers’ sustainability and ESG risk practices. By allowing the advisors to vote their own proxies, Vanguard enables our advisors to integrate their own analysis and direct engagement with portfolio companies into their investment strategies.