Vanguard to Offer ETF Versions of Popular Active Stock Funds

Vanguard will offer three new, active fundamental stock exchange-traded funds overseen by managers who run some of the family’s most storied stock mutual funds, including Vanguard Dividend Growth VDIGX, it said today. The new ETFs mark Vanguard’s first foray into ETFs run by bottom-up stock-pickers, and a first for the family’s largest and oldest subadvisor, Wellington Management.

The announcement follows a growing trend among asset managers who are experiencing persistent outflows from their actively managed mutual funds. Investors have increasingly shifted their money out of mutual funds and into cheaper and more tax-efficient ETFs over the past decade. Vanguard and its clients both stand to benefit. The latter gets lower fees and a more tax-efficient investment. All else equal, those traits lead to better long-term performance. Vanguard gets a more attractive investment that’s easier to sell for those same reasons.

The three ETFs won’t be completely new. All will use Wellington managers who currently oversee Vanguard mutual funds, and they will borrow aspects of existing investment processes.

Vanguard Wellington Dividend Growth Active ETF VDIG has the clearest lineage back to a mutual fund. Wellington’s Peter Fisher is expected to follow a process similar to the one he employs at Vanguard Dividend Growth Fund and Vanguard Advice Select Dividend Growth Fund VADGX. Michael Masdea and Brian Barbetta will manage Vanguard Wellington U.S. Growth Active ETF VUSG with a similar approach they use on Wellington’s sleeve of Vanguard Global Equity Fund VHGEX. However, they will limit holdings to US stocks. Finally, David Palmer will oversee Vanguard Wellington U.S. Value Active ETF VUSV following a similar process he employs on Wellington’s portion of Vanguard Windsor Fund VWNDX.

All three will also sport Vanguard-like fees. The expected expense ratios of Vanguard Wellington U.S. Growth Active ETF and Vanguard Wellington U.S. Value Active ETF land near the bottom decile of the large-growth and large-value categories, respectively. Vanguard Dividend Growth Fund’s expense ratio lands just outside the cheapest quartile of the large-blend category.

Actively managed ETFs aren’t new for Vanguard. Its internal quantitative equity group has managed a small lineup of rules-based stock ETFs in the US and Canada. It has also pushed further into actively managed bond ETFs over the past several years. However, they don’t represent a huge portion of its business. Excluding its ETFs-of-ETFs, Vanguard had approximately $15 billion sitting in actively managed ETFs at the end of July 2025—a tiny fraction of the $10 trillion that it manages globally.

The ETF landscape is immensely competitive. Simply offering them does not guarantee success, even for a firm as well positioned as Vanguard. Many of its competitors have tried, but few have succeeded. The distribution plans, investment processes, and managers of these new ETFs matter a lot. Those traits will only become more important as more managers move into ETFs and fees continue to decline.

A previous version of this article ran on Aug. 18, 2025.