Vanguard Russell 1000 Index Fund Institutional Shares VRNIX

Vanguard Russell 1000 Index I holds a quantitatively derived Gold Morningstar Medalist Rating. The rating reflects that it has scored particularly well on factors Morningstar research associates with future outperformance relative to category peers.

People: Above Average

Note: This share class' People Pillar rating and analysis are inherited from an analyst-covered share class under the same Strategy Provider Company (rolled up to Branding Name) and Morningstar Category Broad Group: Vanguard FTSE All-Wld ex-US SmCp ETF (SecID: FOUSA08NFZ).

Process: High

Note: This share class' Process Pillar rating and analysis are inherited from an analyst-covered passive share class, which tracks the same index: iShares Russell 1000 ETF (SecID: FEUSA0001A).

Performance (in US Dollar)

Over the past 12 months, Vanguard Russell 1000 Index I share class returned 30.3%, underperforming its category index, the Morningstar US Large-Mid TR USD Index (30.9%), but outperforming its Morningstar category peers (27.4%). Across the 10-year period, the fund returned 14.9% per year, underperforming the index (15.1% per year) and ahead of its Morningstar Category average (13% per year).

Price

Vanguard Russell 1000 Index I's Prospectus Adjusted Expense Ratio is 0.05% per year. It places it in the cheapest quintile of the Morningstar US Fund Large Blend Category, where the median fee is 0.67% per year. This cost positioning translates into a Medalist Rating Price Score of 2.28, which reflects its relative price positioning within the category. The Price Score ranges from -2.50 (most expensive) to +2.50 (cheapest), with higher scores indicating better cost competitiveness.

The Russell 1000 Index tracks the largest 1,000 US stocks that pass its eligibility screen and weights them by market cap. Stocks must meet minimum market-cap and liquidity requirements to join and remain in the index. The index also implements buffers along the lower band of the market-cap breakpoint for current constituents to reduce unnecessary turnover during reconstitution. The index rebalances quarterly. Russell moved to semiannual reconstitutions in 2026, which will help the index remain representative of its target market, but any benefits should be minor.

The US stock market's market-cap weighting is a sensible approach. Highly traded stocks usually reflect new information quickly, and market-cap-weighting requires minimal trading costs, which can detract from returns. It follows the wisdom of crowds and takes the guesswork out of stock selection. The US stock market has historically produced solid long-term gains, and owning most of the market has allowed investors to capitalize on those gains. Should strong market performance continue, the fund is well positioned to reap those rewards.

Market-cap-weighting tilts the index toward the largest and most established names. Companies with wide or narrow Morningstar Economic Moat Ratings dominate the portfolio, showcasing the strategy’s durability. Holding 1,000 stocks reduces the opportunity cost of missing out on strong performers, too. When a portfolio owns a greater chunk of the US stock universe, it has a better chance of capturing gains from companies that end up driving returns. Concentrated active funds are more likely to miss out if those stocks are excluded from their narrow portfolios.

Large allocations to the biggest names in the US stock market present some concentration risk, but the index simply represents the market. While higher concentration may be a concern for investors, there isn’t a clear relationship between index performance and market concentration. In addition, the largest companies, such as Apple and Microsoft, often have diversified business lines, so they don’t rely on a single product, service, or market to determine company success.

Note: This share class' Process Pillar rating and analysis are inherited from an analyst-covered passive share class which tracks the same index: iShares Russell 1000 ETF (SecID: FEUSA0001A).

Vanguard's equity index group earns an Above Average People Pillar rating for its well-supported and stable management team that's adept at leveraging Vanguard's comprehensive resources. Its portfolio managers benefit from the firm's global infrastructure and advanced portfolio management technology, which facilitates cost-efficient trading around the globe. The infrequent turnover of managers, coupled with Vanguard's practice of rotating them across various funds, enhances their expertise and understanding of different market segments.

The fund's managers directly handle trading, providing them with deeper insights into the portfolio's operations than a stand-alone trader might have. They are backed by a global team of dedicated personnel and employ sophisticated, scalable technology to minimize their workload and enhance tracking accuracy. Vanguard's independent risk management team plays a crucial role in ensuring its funds adhere to predetermined tracking tolerances. It collaborates closely with the managers to oversee trades and address potential issues proactively. Vanguard compensates managers based on tracking error and excess return metrics to foster a culture of accountability and ensure that the management team's interests are closely tied to investors'.

Note: This share class' People Pillar rating and analysis are inherited from an analyst-covered share class under the same Strategy Provider Company (rolled up to Branding Name) and Morningstar Category Broad Group: Vanguard FTSE All-Wld ex-US SmCp ETF (SecID: FOUSA08NFZ).

Vanguard maintains its High Parent Pillar rating as it continues to grow under new leadership.

CEO Salim Ramji has had a busy first year captaining Vanguard’s crew, and the ship remains pointed in the right direction. The firm made its largest round of fee cuts in early 2025, which came at an estimated cost of USD 350 million. It established a separate division dedicated to its advice and wealth management efforts, a sign that it wants to seriously compete within those lines of business. Asset growth has continued to be a huge success. Only BlackRock’s inflows rival the money Vanguard is taking in. Likewise, the number of clients it serves has more than doubled since 2015.

Despite that success, an ever-growing number of clients has presented a challenge: Vanguard can’t grow its services fast enough to keep up with demand. In some instances, it has had to curb certain services and capabilities or raise fees on others to cope, causing some loyal clients to criticize what they perceive as deteriorating services.

Vanguard has ambitions to bring its disruptive legacy to the bond market. It created roughly a dozen low-cost bond exchange-traded funds for US investors and several others abroad over the 12 months through June 2025. All have low fees in their respective categories, and the actively managed strategies align with Vanguard’s philosophy. They are relatively easy to understand and are conservatively managed.

Vanguard has another opportunity to prove that clients are still its priority. On the surface, its endeavor into the high-fee deal-making world of private assets alongside Wellington and Blackstone looks like a cultural mismatch. So far, the collaboration hasn’t produced anything that’s concerning.

Note: This share class' Parent Pillar rating is analyst-driven, as its Branding Name, Vanguard (Branding Name ID: BN00000AAL), is covered by Morningstar Manager Research.

Performance is evaluated in US Dollar, measured to the end of April 2026.

Short-Term Performance

Over the past 12 months, Vanguard Russell 1000 Index I share class returned 30.3%, underperforming its category index, the Morningstar US Large-Mid TR USD Index (30.9%), but outperforming its Morningstar category peers (27.4%). Over the three-year period, it returned 21.4% per year, lagging the index (21.9% per year) while outperforming its Morningstar category peers (18.7% per year).

Long-Term Performance

The fund's five-year annualized return of 12.3% fell short of the benchmark (12.5% per year) but exceeded the Morningstar Category average (10.8% per year). Over 10 years, the fund returned 14.9% per year, below the index (15.1% per year) but ahead of its Morningstar Category average (13% per year).

Vanguard Russell 1000 Index I's Prospectus Adjusted Expense Ratio is 0.05% per year. It places it in the cheapest quintile of the Morningstar US Fund Large Blend Category, where the median fee is 0.67% per year. This cost positioning translates into a Medalist Rating Price Score of 2.28, which reflects its relative price positioning within the category. The Price Score ranges from -2.50 (most expensive) to +2.50 (cheapest), with higher scores indicating better cost competitiveness.