Vanguard Put Gun Stocks in a Gun-Free Fund After Index Error

The transcript discusses the discovery of gun stocks in Vanguard's ESG fund, which was meant to be weapons-free. The error was attributed to Footsie Russell's rebalancing of the index. Despite the mistake, the fund's performance was not materially impacted. The discussion highlights the importance of scrutinizing ESG funds, as mandates can be vague. Vanguard's low fees and popularity are noted, but the incident underscores the need for better controls in passive funds. The lesson for investors is to thoroughly examine fund contents, as ESG criteria can be ambiguous.

What does the term 'look under the hood' imply in the context of investing in ESG funds?

What actions did Footsie Russell take to prevent future occurrences of the error?