Vanguard has rolled out a mutual fund focused on environmental, social and governance (ESG) principles, though it cautions the product might invest in sectors or companies that ESG diehards might not approve of.

The Vanguard Global ESG Select Stock Fund that launched on Tuesday is an actively-managed product holding 40 to 50 stocks that its portfolio managers at Wellington Management deem to have strong business fundamentals and ESG practices. 

The fund is offered as both Admiral Shares ($50,000 investment minimum and an expected expense ratio of 0.45 percent) and Investor Shares ($3,000 minimum and expense ratio of 0.55 percent). 

Vanguard is now accepting investments in the fund during a two-week subscription period ending on June 4, when it is expected to start trading.

But fans of ESG investing should look before they leap regarding the Vanguard Global ESG Select Stock Fund.

“At times, the fund may hold companies that would be omitted by some exclusionary ESG strategies, so the fund may not be ideal for investors seeking to exclude particular sectors or companies involved in activities that are at odds with their individual values,” Vanguard said in a press statement announcing the fund's launch.

Vanguard could not be reached for comment.

The company has three existing U.S.-listed passively managed ESG-focused funds, all of which have a clear mandate regarding the types of sectors excluded in these products.

The Vanguard FTSE Social Index Fund Admiral Shares (VFTAX) is a $5.6 billion mutual fund that tracks the FTSE4Good US Select Index composed mainly of large- and mid-cap stocks screened for certain social and environmental criteria related to the environment, human rights, health and safety, labor standards and diversity. The fund had 494 holdings as of April 30, and its underlying index excludes companies involved with weapons, tobacco, gambling, alcohol, adult entertainment and nuclear power.

The fund debuted in 2000, and according to Morningstar its average annual returns have topped the S&P 500 Index in the past one-, three-, five- and 10-year periods.

Last September, the company launched the Vanguard ESG U.S. Stock ETF (ESGV) and Vanguard ESG International Stock ETF (VSGX).

Both ETFs specifically avoid the adult entertainment, alcohol and tobacco, weapons, fossil fuels, gambling, and nuclear power industries. They also exclude stocks of companies that don’t meet the standards of U.N. global compact principles for corporate responsibility and sustainability, and which don’t satisfy diversity criteria.

The Vanguard ESG U.S. Stock ETF has garnered $411 million in assets and charges an expense ratio of 0.12 percent. The Vanguard ESG International Stock ETF has assets of nearly $270 million and an expense ratio of 0.15 percent.