Vanguard Launches New Actively Managed ETFs
Vanguard has introduced three new funds that are trading on various active basic exchanges. These funds are managed by some of the well-known managers who oversee the family’s popular equity mutual funds, like the Vanguard Dividend Growth Fund. It’s worth noting that this marks Vanguard’s initial step into ETFs managed by bottom-up stock pickers, with Wellington Management leading the way as Vanguard’s largest and oldest sub-advisor.
This announcement aligns with recent trends among asset managers who have been experiencing significant outflows from their more aggressively managed mutual funds. Over the last decade, investors have increasingly shifted their preferences towards lower-cost, tax-friendly ETFs. This shift benefits both Vanguard and its clients, as clients enjoy reduced fees and improved tax efficiency. Generally speaking, these aspects can lead to better long-term performance. For Vanguard, having quality investments that are easier to sell is, well, a plus as well.
The three new ETFs aren’t entirely fresh; they all utilize Wellington Management, which already manages Vanguard mutual funds, incorporating elements of their existing investment strategies.
Among the new offerings, the Vanguard Wellington Dividend Growth Active ETF (VDIG) has the most straightforward lineage from mutual funds. Managed by Wellington’s Peter Fisher, it is expected to adhere closely to the established processes of both the Vanguard Dividend Growth Fund and the Vanguard Advice Select Dividend Growth Fund. The Vanguard Wellington US Growth Active ETF (VUSG) is managed by Michael Masdea and Brian Barbetta, employing strategies similar to those used in the Wellington sleeves of the Vanguard Global Equity Fund, though with a focus solely on US stocks. Lastly, David Palmer will oversee the Vanguard Wellington US Value Active ETF (VUSV) using a process akin to that of the Wellington portion of the Vanguard Windsor Fund.
Importantly, all three ETFs come with competitive fees. The expected expense ratios for the Vanguard Wellington US Growth Active ETF and the Vanguard Wellington US Value Active ETF are among the lowest in their respective large growth and large value categories. The expense ratio for the Vanguard Dividend Growth Fund lies just outside the cheapest quartiles in the broader blend category.
Although actively managed ETFs aren’t new to Vanguard, their internal quantitative equity group does manage a modest array of rule-based equity ETFs in the US and Canada. There has also been a noticeable push into more aggressively managed bond ETFs in recent years, but these still represent a small segment of Vanguard’s overall business. Excluding ETFs-of-ETFs, the firm reported around $15 billion in aggressively managed ETFs at the end of July 2025—just a tiny slice of the $10 trillion they manage worldwide.
The ETF market is incredibly competitive; merely launching them does not guarantee success for a company like Vanguard. Many competitors have tried, but results have varied widely. Here, effective distribution strategies, solid investment processes, and experienced managers are crucial. As more fund managers transition to ETFs and fees keep decreasing, these elements will only become more significant.
