Vanguard’s First Stock-Picking ETFs Come With Its Highest Fees Yet

Vanguard is preparing to do something it has never done before: launch ETFs that rely on fundamental stock picking. The firm has filed for three new active equity funds, each managed by Wellington Management Company, that are expected to debut in the fourth quarter of 2025.

The filings mark a big shift for Vanguard’s ETF lineup. The company currently runs 13 actively managed ETFs in the U.S. Eight of those are fixed income funds, and the other five are equity factor funds that use quantitative models to evaluate stocks. 

What Vanguard has never offered, until now, is an ETF built around a concentrated, manager-driven stock-picking strategy. The new funds will be exactly that.

Three New Strategies

The Vanguard Wellington Dividend Growth Active ETF (VDIG) will hold about 25 large-cap dividend payers with strong balance sheets and low turnover. It will be benchmarked to the S&P U.S. Dividend Growers Index, the same index tracked by the $95 billion Vanguard Dividend Appreciation ETF (VIG). 

VDIG will be managed by Peter Fisher, a Wellington partner who already manages several of Vanguard’s dividend growth mutual funds, including the Vanguard Dividend Growth Fund (VDIGX).

The Vanguard Wellington U.S. Growth Active ETF (VUSG) will own roughly 40 companies with high growth characteristics and will be benchmarked against the Russell 1000 Growth Index, which is tracked by the $31 billion Vanguard Russell 1000 Growth ETF (VONG). 

VUSG is essentially a carveout of Wellington’s strategy for the Vanguard Global Equity Fund (VHGEX), which holds more than 500 stocks across 30 countries. The ETF version will be far more concentrated and focused exclusively on U.S. stocks.

The Vanguard Wellington U.S. Value Active ETF (VUSV) will hold about 80 stocks and follow a contrarian value style. It will use the Russell 1000 Value Index as its benchmark, the index behind the $13.4 billion Vanguard Russell 1000 Value ETF (VONV). 

The strategy is based on the Wellington sleeve of the Vanguard Windsor Fund (VWNDX), which is currently co-managed by Wellington and Pzena Investment Management.

Higher Fees

As concentrated active strategies, the new Vanguard ETFs will depend heavily on the stock-picking skill of their managers. Stock-picking funds typically carry higher expenses than index funds, and these are no exception.

VDIG will charge 0.40%, VUSG 0.35%, and VUSV 0.30%. That makes VDIG and VUSG more expensive than any ETF Vanguard currently offers. 

By comparison, the median expense ratio of Vanguard’s active ETFs is just 0.13%, while the median for all Vanguard ETFs is 0.07%. The costliest ETF the firm offers today is the Vanguard Multi-Sector Income Bond ETF (VGMS), which charges 0.30%. 

That said, the new equity funds will land at roughly half the median cost of all U.S.-listed active equity ETFs, which is about 0.70%.

Active Is Bigger Outside ETFs

The filings underscore Vanguard’s push into active management, even if its ETFs remain overwhelmingly passive. Across its 97 U.S.-listed ETFs with $3.5 trillion in assets, only 13 are active, with a combined $13.4 billion in AUM—just 0.38% of the total. 

But when the mutual fund lineup is included, Vanguard is a much heavier player. Globally, the firm manages $1.8 trillion in active strategies, or about 18% of its $10.1 trillion in total assets. 

Those strategies range from money market funds and factor funds to hedge-fund-style approaches like the long-short Vanguard Market Neutral Fund (VMNFX), which carries a 1.4% expense ratio.

In ETFs, Vanguard’s biggest active product is the $5.5 billion Vanguard Ultra-Short Bond ETF (VUSB), which manages maturities in the 0–2 year range. The second-largest, the $3.6 billion Vanguard Core Bond ETF (VCRB), is an active alternative to the $133 billion Vanguard Total Bond Market ETF (BND). 

The only active equity ETF Vanguard offers with more than $1 billion in AUM is the Vanguard U.S. Momentum Factor ETF (VFMO), which relies on a rules-based model to buy stocks with strong recent performance.

The Wellington Connection

In its announcement of the new active ETFs, Vanguard emphasized both its decades-long relationship with Wellington and the pedigree of Wellington’s portfolio managers. 

Vanguard founder Jack Bogle once led Wellington before leaving to start Vanguard in 1975, and Wellington has remained one of Vanguard’s most important partners ever since. 

Many of Vanguard’s active mutual funds are run by Wellington portfolio managers. These new ETFs extend that relationship into the ETF space, giving Wellington’s stock-picking teams a chance to run concentrated equity strategies with the added advantages of tax efficiency, daily transparency, and intraday trading.