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Rekenthaler Report

Whither Vanguard’s Active U.S. Equity Funds?

Their future is becoming decidedly uncertain.

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Fewer Survivors
The number of actively managed diversified U.S. equity funds offered by Vanguard continues to dwindle. The company terminated seven such funds last decade, another in 2020 (Vanguard Capital Value), and this week announced a ninth candidate: Vanguard U.S. Value (VUVLX). Over the same period, the company has added but one new entrant, Vanguard U.S. Multifactor (VFMFX) (VFMF), which was launched in 2018.

The fate of Vanguard U.S. Value is particularly symbolic, as the fund is to be merged into Vanguard Value Index (VIVAX). Out with active, in with passive. This is not the first occasion in which Vanguard has folded an actively managed fund into an index fund, but it represents the first time it has done so for a diversified U.S. stock fund, save for a tax-managed vehicle. Might other instances follow?

John Rekenthaler does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.