Vanguard redefined investor-first for the better, and it’s aiming to maintain that reputation.
Why it matters: Vanguard revolutionized passive investing when it created the first retail index fund. The behemoth asset manager continues to attract swells of everyday investors and money with headline-making fee cuts that put pressure on rivals to follow suit. But Vanguard is also seeking to develop an edge in new areas. It’s going full force on active bond ETFs, for example, and creating a target-date trust series to provide retirees with the security of a predictable income.
This week’s episode is the second of a two-part series examining what’s going on with Vanguard in 2026.
Dan Sotiroff, associate director of US passive strategies research for Morningstar, covers Vanguard.
10 Questions on Vanguard in 2026
- Vanguard has grown significantly over the past decade, more than doubling its clients between 2015 and 2025. What have been the ups and downs of this expansion, and how is the firm handling them?
- Vanguard CEO Salim Ramji came from BlackRock. He’s bringing in high-profile talent from his former firm. Who are these folks, and what roles have they stepped into at Vanguard?
- Vanguard made it a two-peat: They cut fund fees for a second year in a row. How does this year’s trim compare with last year’s, and how much are investors expected to save?
- Where is the company making up the revenue loss, estimated at around $600 million for both years?
- Vanguard has recently partnered with TIAA to launch a target-date fund series with guaranteed income. Can you explain?
- The fund giant is also collaborating with Wellington and Blackstone to combine public and private assets in multi-asset investments. What do you make of this, and does this fit with Vanguard’s mission?
- You believe that Vanguard is going full force in active fixed income. Why is the firm betting big on this area?
- It recently launched a high-yield index-tracking bond ETF and an actively managed ETF. What are the details, and which kinds of investors are suited for these?
- Any word on when these will come under Morningstar coverage?
- What do you think should be the top priorities for Vanguard in 2026?
Key Quote on Vanguard Cutting Hundreds of Millions in Fees
The bigger point that I make with this is that Vanguard didn’t have to do this. That’s what sends such a big, powerful signal to me. Most of their funds were already really cheap. The cuts were maybe a basis point, maybe two, to a lot of these funds, on average. It’s not going to be life-changing money for me or anybody else that’s holding a Vanguard fund, but the fact that they’re willing to part with a pretty big chunk of revenue, I think, sends a real signal about their financial stability as well as their intention to continue the mission.
Dan Sotiroff, associate director of US passive strategies research, Morningstar
The Takeaway: Vanguard should stick to its mission as it grows and evolves. That has contributed to the large asset manager’s success for its first five decades, according to Sotiroff. The waves of new clients and money have created challenges that could risk steering the firm away from what makes it attractive in the first place. The Vanguard analyst says as long as the company continues to stand up for investors, deliver low fees, and manage funds well, it should be fine. He believes, so far, Vanguard is striking the right balance.
More From Morningstar on Vanguard’s Push Into Active Fixed Income
Vanguard is pushing into active fixed income for several reasons. Sotiroff says the asset manager has spent more than a decade building out its fixed-income portfolio management team. It has developed new capabilities and hired new talent. He thinks another reason is that a lot of stock strategies, such as indexing, environmental, social, and governance, and strategic beta, are picked over. Also, the zero-interest-rate environment has ended. Bonds are attractive because of their higher yields and may appeal to investors who want to reduce portfolio risk or generate a little income.
In case you missed part one of the two-part series on Vanguard in 2026, watch this Investing Insights episode for more analysis from Sotiroff. Read about how Morningstar’s Dan Culloton found a top-performing Vanguard fund by accident. Find out how Vanguard investors made $5 trillion over the past decade. Buy-and-hold investors can check out top-rated Vanguard ETFs and mutual funds.
Securities Mentioned in This Article
Vanguard High-Yield Active ETF VGHY
Vanguard US High-Yield Corporate Bond Index ETF VCHY
The fund’s ticker will be VCHY when it starts trading.