Vanguard Charitable Adds New Investments with Emphasis on Active Management
For the second time in six months, Vanguard Charitable has added new investments to enhance its donors’ charitable asset allocation options. The 16 recently added investments offer donors greater portfolio customization capability, especially among U.S. equity options and active-strategy investments.
Last October, Vanguard Charitable added five popular, passively managed investments to our leading investment lineup. The most recent addition of 11 new investments made available to donors on March 30 brings its total to 36 high-quality, cost-effective investments.
As the nation’s highest-value donor-advised fund (DAF) provider, it's always looking to amplify its donors’ ability to make a difference.
These 16 new investment options are immediately available to donors.
- Donors can recommend placing charitable funds in the investment options when making their next contribution into their philanthropic account.
- Donors can also recommend an investment exchange (see steps below) to transfer existing DAF funds into the new investments.
As always, when choosing among charitable investments, donors should be guided by their giving goals. The investment options a philanthropic account is currently invested in may still, in many cases, be the right ones for that donor.
New investment options
To find a full analysis of each new investment option, see Vanguard Charitable's investments page.
| Investment Name | Management Style | Expense Ratio | Goal |
|---|---|---|---|
| Short-Term Inflation Protected Securities | Passive | 0.04% | Seeks to offer protection against inflation with reduced price volatility through exposure to shorter-duration inflation-protected treasury bonds. |
| S&P 500 | Passive | 0.02% | Seeks to track the performance of the Standard & Poor's 500 Index, which measures the investment return of large-cap stocks. |
| Large-Cap Value | Passive | 0.04% | Seeks to track the performance of CRSP U.S. Large Cap Value Index, providing exposure to a broad range of U.S. value-oriented stocks as determined by a variety of value factors. |
| Large-Cap Growth | Passive | 0.04% | Seeks to track the performance of CRSP U.S. Large Cap Growth Index, providing exposure to a broad range of U.S. growth-oriented stocks as determined by a variety of growth factors. |
| Real Estate | Passive | 0.10% | Seeks to provide a high level of income and moderate long-term capital appreciation by tracking a benchmark index that measures the performance of publicly traded REITs and other real estate-related investments. |
| Extended Market | Passive | 0.02% | Seeks to track the performance of the S&P Completion Index, providing broad exposure to U.S. small- and mid-cap stocks. |
| Ultra-Short-Term Bond | Active | 0.10% | Seeks to provide current income while maintaining limited price volatility and aggregate performance consistent with ultra-short-term, investment-grade, fixed-income securities. |
| Core Bond | Active | 0.10% | Seeks to provide total return while generating a moderate level of current income with diversified exposure primarily to investment-grade U.S. bonds. |
| High-Yield Corporate | Active | 0.13% | Seeks a high and sustainable level of current income by investing primarily in below-investment-grade corporate securities offering attractive yields. |
| Dividend Growth | Active | 0.27% | Seeks to invest in a diversified array of stable, well-managed companies that have a history of or a potential for growing dividends over time. |
| U.S. Growth | Active | 0.23% | Seeks long-term capital appreciation by investing in a portfolio of large-cap stocks believed to have superior sustainable growth potential at reasonable valuations. |
| Windsor II | Active | 0.26% | Seeks long-term capital appreciation and income by investing in a broadly diversified portfolio of mid- and large-cap value stocks. |
| Explorer | Active | 0.34% | Seeks long-term capital appreciation by investing in a broad universe of small- and mid-cap growth stocks. |
| International Core Stock | Active | 0.38% | Seeks to provide actively managed equity exposure to mid- and large-cap international stocks. |
| Commodity Strategy | Active | 0.21% | Seeks to provide broad commodities exposure and capital appreciation |
| Global Positive Impact | Active | 0.59% | Seeks capital appreciation with an emphasis on investing in businesses that deliver positive change by contributing towards a more sustainable and inclusive world. |
Substantial fee reduction scheduled for Moderate Growth investment
A separate change to the underlying funds in the Moderate Growth investment will cause the expense ratio to decrease from 0.11% to 0.03%, a fee reduction of 73% for one of our most popular investments. Moderate Growth will still maintain the same goals and overall asset allocation (approximately 60% stock/40% bond) with its new underlying funds, listed below.
This change took effect the week of April 10.
| Existing underlying funds | New underlying funds |
|---|---|
| 45% Vanguard Balanced Index Fund (VBAIX) | 42% Vanguard Total Stock Market Index Fund (VSMPX) |
| 45% Vanguard WellingtonTM Fund (VWENX) | 40% Vanguard Total Bond Market Index Fund (VBMPX) |
| 10% Vanguard Total International Stock Index Fund (VTPSX) | 18% Vanguard Total International Stock Index Fund (VTPSX) |
Moderate Growth’s construction will now be in line with that of our other Portfolio Solutions, which feature the same set of underlying funds in varying allocations and the same 0.03% expense ratio. These Portfolio Solutions represent Vanguard Charitable’s best thinking on charitable investments and most versatile investment options when it comes to near- and long-term charitable impact.
While the Wellington and Balanced Index funds will no longer underlie the Moderate Growth investment, they remain available in our lineup as standalone charitable investments.
How donors can recommend an investment exchange
You can recommend an investment exchange by logging into your secure online account. From there, you’ll hover over the Investments tab and then select “Recommend An Exchange.” Follow the instructions and you can recommend changes to your account’s investments.
The deadline to process exchanges on a given business day is 2 p.m., Eastern time. Exchanges involving very large dollar amounts may be processed over multiple business days.
The preceding press release was provided by a company unaffiliated with NonProfit PRO. The views expressed within do not directly reflect the thoughts or opinions of NonProfit PRO
