Vanguard's New ESG Fund: 40 Stocks And A Marketing Plan

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Vanguard, the $5.3 trillion-in-assets behemoth that popularized index investing, announced it’s jumping on the ESG bandwagon

, a wealth management firm with $5 billion in assets. “It’s a very different thing than what Jack Bogle used to do. He was not driven by the same kind of marketing incentives that Vanguard is driven by today.”

A Vanguard spokesperson says the company only launches funds that meet investor needs. “We have a long history of fund innovation, and we take a highly thoughtful approach to product development.” ESG funds continue to attract record numbers of assets. In 2018, they received $5.5 billion in net inflows, reaching a record for the third straight year and bucking the trend of declining inflows in the overall mutual fund market, MorningstarEveryone loves the idea of making money and doing good, but investors should be wary of industry hype.

Vanguard already has a few ESG offerings, but they haven’t attracted much attention. Its FTSE Social Index Fund, which launched in 2000 and holds more than 500 stocks, is the largest, with $5.1 billion in assets, according to . Its ESG International Stock Fund ETF has $214 million in assets, while its ESG U.S. Stock ETF has $266 million. By contrast, its Total Stock Market Index Fund has $757 billion.

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