Yes. Vanguard is launching its first actively managed ETFs with human stock pickers calling the shots. No. They haven’t received SEC approval to add ETF share classes to existing mutual funds. These will be standalone ETFs.
Backing up, Vanguard filed with the SEC to launch three ETFs this morning.
- Vanguard Wellington Dividend Growth Active ETF (VDIG)
- Vanguard Wellington U.S. Growth Active ETF (VUSG)
- Vanguard Wellington U.S. Value Active ETF (VUSV)
As the names imply, these are active ETFs, sub-advised by Wellington.
That Vanguard has turned to Wellington in launching its first active stock ETFs is no surprise—the two firms have a long history, and they’ve shown a renewed willingness to collaborate lately (see: the WVB All Markets interval fund). (Yes, Vanguard’s suite of Factor ETFs is actively managed, but the firm’s in-house quantitative team runs the show—the computers do the stock picking.)
What is surprising? Wellington’s name is on the label. Only a handful of other Vanguard funds—think, Wellington (VWELX), PRIMECAP (VPMCX), PRIMECAP Core (VPCCX) and Baillie Gifford Global Positive Impact Stock (VBPIX)—feature the sub-adviser’s name. In that latter case, Vanguard adopted an existing fund.
This feels different. Including Wellington in the title is a real commitment. If Vanguard changes managers down the road, will they have to rename the fund?