Vanguard exchange-traded funds (ETFs) have become a juggernaut in the world of passive investment management. They are widely used across retail, institutional, and retirement plans as an effective way to get low-cost, liquid, tax efficient and dependable exposure to both stocks and bonds. You simply can’t go wrong when choosing one of their funds as a core or tactical holding within your ETF portfolio.
One of the keys to their success is the ability to classify an ETF as a separate share class of their existing mutual fund platform. This creates the benefit of a built-in track record and a comparative index from which to evaluate even newly established ETFs. Think of them as just porting the mutual fund strategy to a vehicle with lower costs that you can trade throughout the day.
While the Vanguard ETF business is an unqualified success, in my opinion, there is still room for growth into active Vanguard funds.
Yeah, I said it. Vanguard needs to port some of their active strategies to ETFs as well.
Many investors overlook the actively managed suite of Vanguard mutual funds because they don’t follow the traditional “high cost, weak performance” mantra that dogs other fund companies. They have partnered with world-class asset managers to keep fees low and successfully navigate the markets for their investors for decades.
Let’s hope Vanguard considers my wish list of active funds that would make great ETFs.