2019-05-01+Kiplingers+Personal+Finance

05/2019 KIPLINGER’S PERSONAL FINANCE 63

five of the past six calendar

years between 2013 and

2018. The table (left) shows
      the top performers.
      Vanguard isn’t new to
      ESG investing. The Valley
      Forge, Pa.–based firm
      already has three index-
      based ESG funds: Vanguard
      FTSE Social Index (symbol
      VFTAX), Vanguard ESG
      International Stock ETF
      (VSGX) and Vanguard ESG
      U.S. Stock ETF (ESGV).
      The introduction of an-
      other offering, this one ac-
      tively managed, shows that
      Vanguard is “going whole-
      hog into the ESG market-
      place,” says Dan Wiener,
      editor of the Independent Ad-
      viser for Vanguard Investors
      newsletter. Vanguard is fol-
      lowing the money in a mar-
      ket that continues to grow.
      According to Morningstar,
      ESG funds and ETFs pulled
      in $5.5 billion in 2018, the
      third straight year of record
      net inf lows (total money
      coming in, less money going
      out). Meanwhile, net f lows
      into the U.S. fund universe
      overall hit a nine-year low.
      NELLIE S. HUANG
      [email protected]

Vanguard’s New ESG Offering

An actively managed fund focused on sustainable investing will debut soon.

IN ANOTHER SIGN THAT

sustainable investing is

here to stay, Vanguard

announced it would launch

its first actively managed

fund with a focus on envi-

ronmental, social and

(corporate) governance

characteristics.

When it opens, in late

May at the earliest, Van-

guard Global ESG Select

Stock (no symbol yet) will

charge 0.55% in annual

fees, half the average ex-

pense ratio of all ESG stock

mutual funds.

Two managers from Wel-

lington Management, Mark

Mandel and Yolanda Cour-

tines, plan to hold roughly

40 stocks. They’ll scout

for profitable, smartly run

companies in the U.S. and

abroad that are also leaders

in integrating ESG practices

into their businesses.

ESG qualities entail more

MUTUAL FUND SPOTLIGHT

than just being anti-gun or

anti-tobacco. To earn the

mantle, generally, compa-

nies must be mindful of

their environmental impact;

treat customers, suppliers

and employees well; and

be run by a diverse pool of

managers who are aligned

with shareholder interests.

Fund investors don’t have

STOCK MUTUAL FUNDS

Rank/Name Symbol 1 yr. 5 yrs.

Assets†

(billions)

Max.

sales

charge

Annualized

total return

1.Vanguard Total Stock Market Idx Adm VTSAX $649.2 4.5% 10.6% none

2.Vanguard Total Intl Stock Index Adm VTIAX 351.2 –6.4 3.6 none

3.Vanguard 500 Index Adm VFIAX 345.7 4.8 11.2 none

4.American Growth Fund of America A AGTHX 187.5 2.0 11.3 5.75%

5.Fidelity 500 Index Inv FUSEX 170.8 4.8 11.2 none

6.American EuroPacific Growth A AEPGX 156.2 –7.8 4.4 5.75

7.American Balanced A ABALX 137.2 3.9 7.7 5.75

8.Fidelity Contrafund FCNTX 118.1 2.5 11.9 none

9.American Washington Mutual A AWSHX 112.1 5.6 10.1 5.75

10.American Income Fund of America A AMECX 107.4 3.0 6.3 5.75

S&P 500-STOCK INDEX 4.8% 11.2%

MSCI EAFE INDEX –5.0% 3.0%

20 LARGEST STOCK AND BOND MUTUAL FUNDS Ranked by size. See returns for thousands of funds at kiplinger.com/tools/fundfinder.

BOND MUTUAL FUNDS

Rank/Name Symbol

1-year

total

return

Assets†

(billions)

Max.

sales

charge

Current

yield

1.Vanguard Total Bond Mkt Index Adm VBTLX $171.8 3.6% 3.1% none

2.Pimco Income A PONAX 115.3 3.7 3.3 3.75%

3.Vanguard Total Intl Bd Index Adm VTABX 102.2 4.8 0.8 none

4.Metropolitan West Total Return Bd MMWTRX 71.0 3.7 2.9 none

5.Pimco Total Return A PTTAX 64.0 2.8 2.7 3.75

6.Vanguard Interm-Term Tax-Ex Inv VWITX 63.3 4.4 2.2 none

7.Vanguard Short-Term Inv-Grade Inv VFSTX 58.6 3.2 3.0 none

8.Dodge & Cox Income@ DODIX 54.9 3.5 3.7 none

9.DoubleLine Total Return Bond N DLTNX 49.8 3.6 3.5 none

10.Lord Abbett Short Duration Income ALALDX 45.0 3.2 3.0 2.25

BLOOMBERG BARCLAYS US AGGREGATE BOND INDEX 3.7% 3.1%

B OF A MERRILL LYNCH MUNICIPAL MASTER INDEX 4.4% 2.6%

ESG-FOCUSED WORLD LARGE-COMPANY

STOCK FUNDS Ranked by one-year return

Max.

sales

charge

1.Morgan Stanley Inst Glbl Franchise AMSFBX 11.7% 10.8% 5.25% 1.23%

2.Morgan Stanley Inst Glbl Sustain A MGQAX 9.9 9.2 5.25 1.28

3.Dreyfus Global Equity Income A DEQAX 4.4 7. 3 5. 7 5 1. 1 8

4.1290 SmartBeta Equity A TNBAX 4.3 —5.501.15

5.FundX Sustainable Impact@ SRIFX 3.6 —none1.35

6.Pax Ellevate Glbl Womens Ldrshp PXWEX 2.9 7. 7 n o n e 0. 8 1

7.Mirova Global Sustainable Equity AESGMX 2.5 —5.751.30

8.Eventide Global Div Opportunities NETNDX 2.2 —none1.15

9.Saturna Sustainable Equity@ SEEFX 2.1 —none0.75

10.AllianzGI Global Sustainability A ASUAX 1.4 —5.501.09

CATEGORY AVERAGE 1.0% 8.0%

to sacrifice performance in

support of their values. We

looked at 28 large-company

stock funds investing in

U.S. and foreign firms, with

ESG-focused strategies as

defined by fund tracker

Morningstar. On average,

the funds’ annualized re-

turns outpaced the MSCI

All Country World Index in

Rank/Name Symbol 1 yr. 5 yrs.*

Total return

Max.

sales

charge

Exp.

ratio

As of March 15. *Annualized. @Only share class. Unless otherwise indicated, funds come in multiple share classes; we list the share class that is best suited for individual investors. †For all share

classes combined. MSCI EAFE tracks stocks in developed foreign markets. SOURCES: Bank of America Merrill Lynch, Morningstar Inc., Vanguard.