BREAKING: Vanguard has just announced the launch of three new active fundamental stock exchange-traded funds (ETFs), marking a significant shift in its investment strategy. This development, unveiled today, positions Vanguard at the forefront of a growing trend among asset managers as they respond to ongoing outflows from traditional mutual funds.
The new ETFs will be actively managed by seasoned professionals from Wellington Management, Vanguard’s largest and oldest subadvisor. This move represents Vanguard’s first entry into ETFs managed by bottom-up stock-pickers, a strategy that aims to attract investors seeking more tailored investment options.
This announcement comes as investors increasingly prefer ETFs over traditional mutual funds due to their lower fees and tax efficiency. Over the past decade, a significant shift has been observed, with billions flowing out of mutual funds and into ETFs. Vanguard and its clients stand to benefit immensely, as the latter will enjoy reduced costs and improved long-term performance prospects.
The three new ETFs, which will inherit key investment strategies from existing mutual funds, include:
– **Vanguard Wellington Dividend Growth Active ETF (VDIG)**: Expect to see management from Wellington’s Peter Fisher, who will utilize a similar process to that of the existing Vanguard Dividend Growth Fund.
– **Vanguard Wellington U.S. Growth Active ETF (VUSG)**: Managed by Michael Masdea and Brian Barbetta, this fund will adopt an investment approach akin to Wellington’s sleeve of the Vanguard Global Equity Fund but will focus exclusively on U.S. stocks.
– **Vanguard Wellington U.S. Value Active ETF (VUSV)**: Under the guidance of David Palmer, this ETF will follow a strategy similar to that of Wellington’s management of the Vanguard Windsor Fund.
Each of these funds is designed to maintain Vanguard-like fees, with expected expense ratios positioned among the lowest in their respective categories. The Vanguard Wellington U.S. Growth Active ETF and Vanguard Wellington U.S. Value Active ETF are anticipated to rank in the bottom decile of large-growth and large-value categories, respectively, while the Vanguard Dividend Growth Fund sits just outside the cheapest quartile of the large-blend category.
While this marks a new chapter for Vanguard in the actively managed ETF space, it is essential to note that actively managed ETFs are not entirely new to the firm. Vanguard’s internal quantitative equity group has previously managed a limited lineup of rules-based stock ETFs in the U.S. and Canada and has expanded its footprint in actively managed bond ETFs in recent years. However, these efforts represent a modest fraction of Vanguard’s overall business, with approximately $15 billion in actively managed ETFs under its management as of the end of July 2025, compared to a staggering $10 trillion in total global assets.
The competitive landscape for ETFs is fierce, and merely launching new products doesn’t guarantee success. Vanguard’s distribution strategies, investment processes, and the expertise of the managers behind these new ETFs will be crucial in determining their market reception. As more fund managers shift focus to ETFs and fee structures continue to evolve, the stakes have never been higher.
Investors are urged to watch this space closely as Vanguard’s latest offerings could reshape the investment landscape, providing opportunities for growth and value in a rapidly changing market.