Vanguard's Best Active Large-Cap Funds
These strategies come at a very cheap price, giving the firm's large-cap equity lineup considerable appeal.
Alec Lucas: Well known for indexing, the Vanguard Group also has an underappreciated active management business, especially in large-cap equities. The bulk of Vanguard’s more than $300 billion in equity assets are outsourced to external subadvisors who run 15 separate strategies, ranging from domestic large-growth, -value, and -blend funds to an emerging-markets offering and even a recently launched ESG fund. Morningstar rates 12 of the strategies and assigns a Morningstar Analyst Rating of Bronze or higher to 11 of them, including four Gold-rated and three Silver-rated strategies.
The three Vanguard strategies run by Pasadena, California-based Primecap Management Company stand out. All three are rated Gold, and while closed to new investors, reopening at some point isn’t out of the question. Investors on the outside looking in must be ready to act quick, though. Vanguard Capital Opportunity, one of Primecap's funds, reopened to new investors in April 2013 only to close again in December of that year. The other Gold-rated strategy, Vanguard Dividend Growth, run by Wellington Management’s Donald Kilbride, had been closed to new investors since July 2016 but reopened on Aug. 1 of this year. Its reopening presents investors with a chance to buy into a resilient, mega-cap-oriented strategy that has proven its ability to growth wealth over time.
Alec Lucas has a position in the following securities mentioned above: VDIGX. Find out about Morningstar’s editorial policies.