What is an Ethically Conscious Global Aggregate Bond Index Fund (Hedged)?

I must be falling behind in my knowledge of investments. It is reported in the business press that global giant fund manager Vanguard offers this fund to investors in Australia. I have no idea what it is. None whatsoever.

Then again, perhaps Vanguard doesn’t know either. The reason the business press is discussing the fund is because – wait for it – Vanguard is being sued by the market conduct regulator ASIC. It is, according to ASIC, another greenwashing crime. It turns out that ASIC believes the fund isn’t ethical, conscious or otherwise. Did someone say ‘Scam’? Or was it ‘Bungling stupidity?’

Greenwashing is becoming entrenched in the operation of the funds management sector in Australia. Here’s what happens: a fund manager sets up a product, calls it green, sells it to the public and is then sued by the regulator when it turns out the fund isn’t green after all. Fund manager apologises.

I think the fund would have been better named Ethically Unconscious than Ethically Conscious. Or maybe Unhedged (ed note: Unhinged?) rather than Hedged. Certainly, it must take a brazen executive to claim a fund meets ethical standards and not actually ensure it does. Or an executive who calls the fund ‘hedged’ and then forgets to hedge. That is asking for trouble as well as being unethical.

I am not in the least bit surprised. I covered another greenwashing case earlier this year.

Larry Fink won’t be happy. He has been pushing his fascist ESG initiative for years. To have Vanguard allegedly stick an ESG sticker on the Fund and then not actually check it meets Larry’s ESG orders is surely disrespectful to the little chap. Not to mention the poor clots that believed the sticker and invested. How will they absolve their sins? Imagine the handwringing in the dining rooms of the comfortably off, the ones who choose such virtuous funds. Ordinary punters just want to invest to get a leg up for their kids and retirement. Virtue signalling is too expensive for them. Imagine the teeth gnashing in the parental homes of the Just Stop Oil kids? Such betrayal. Time to use more epoxy glue (spoiler alert: derived from fossil fuels; I use epoxy on my yacht) to glue themselves to a road. Or a painting.

In the ASIC press release, ASIC states that Vanguard promised to exclude bond issuers with activities in fossil fuels. Inexplicably, Vanguard management didn’t. Vanguard has subsequently apologised and said there was no deliberate intent to mislead investors.

After delivering these remarks to the press, the Vanguard executive climbed into a waiting fossil fuelled powered car to be driven away. Back in the office, the air conditioners, powered by fossil fuelled electricity generators, worked extra hard to cool down the tense atmosphere in tactical meetings to plan the public response. Hypocrisy watched from the background.