08.23.19
Vanguard Social-Investing Error Prompts Funds to Check Controls
by: Annie Massa; Emily Chasan; Rachel Evans
Managers overseeing trillions in exchange-traded funds (ETFs) have been quietly meeting to check the quality controls on their funds, after Vanguard mistakenly added shares of 11 companies, including a gun manufacturer and a private prison operator, to its socially responsible ETF. Vanguard apologized to investors, citing a mistake in the underlying index provided by FTSE Russell, and both companies are adding new controls in the aftermath of the error. While the error at Vanguard was short-lived and the dollar value small, the mishap raises new questions about how ETF managers monitor the indexes that underlie their portfolios.
Read the full article on Bloomberg