Investment Stewardship 2024 Annual Report

Investment Stewardship program

Vanguard’s Investment Stewardship program has a clear mandate to safeguard and promote long-term shareholder returns on behalf of the Vanguard-advised funds and their investors. We carry out this mandate by promoting corporate governance practices associated with long-term shareholder returns at the companies in which the funds invest, without directing the strategy and operations or influencing the control of those companies. When portfolio companies held by the funds generate shareholder returns over the long term, the funds generate positive returns for their investors.

The Vanguard-advised funds

Vanguard-advised funds are primarily index funds managed by Vanguard’s Equity Index Group. [1] Vanguard-advised equity index funds are designed to track specific benchmark indexes (constructed by independent, third-party index providers), follow tightly prescribed investment strategies, and adhere to well-articulated and publicly disclosed policies. The managers of Vanguard’s equity index funds do not make active decisions about where to allocate investors’ capital. In other words, instead of hand selecting the stocks in which an equity index fund invests, managers of these funds buy and hold all (or a representative sample) of the stocks in a fund’s benchmark index. [2]

An equity index fund will generally hold stock in a company for as long as that company is included in the fund’s benchmark index. As a result, Vanguard’s equity index funds are long-term investors in public companies around the world. A small portion of the funds are managed by Vanguard’s Quantitative Equity Group using proprietary quantitative models to select a broadly diversified portfolio of securities aligned with a fund’s investment objective. [3]

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