An exclusive strategy from Vanguard Personal Advisor Services
How we make active investing personal
Looking for greater portfolio customization and the chance for increased returns?
Vanguard Personal Advisor Services® has enhanced our approach to incorporating actively managed funds in your portfolio. The evolution in our strategy is fueled by Vanguard’s industry-leading active expertise and leverages world-class talent who have a history of delivering results for Vanguard investors.
Active investing isn’t right for everyone—it inherently carries greater risk and cost. But in the right circumstances, it can give you a chance to get closer to your goals.
Our success with active
As a whole, active funds can struggle to meet their goal of benchmark outperformance,** mainly because of the accompanying higher costs they need to overcome. But at Vanguard, we’ve developed a rigorous, disciplined approach that’s led to sustained success.*
That’s partly thanks to our low costs.*** The other half of the equation is the world-class fund managers we partner with.
Our formula for active investing
Our results prove it: Active Vanguard funds that outperformed their peer-group averages*
Personalizing active recommendations
Talented managers and low costs are critical for successful active funds, but when it comes to your personal success with active, there’s a third component—patience.
Our clients know how to wait out market downturns and short-term movements. But active investing requires even more patience than index investing, because it’s almost guaranteed there will be periods when the market’s doing well but your active funds aren’t. You need to be ready to endure these periods of underperformance—sometimes extended ones—to reap any benefits over the long run.
Your financial situation also plays a part. For example, investors with tax-advantaged accounts and long-term goals can benefit more from active, since they can shield more-frequent distributions from taxes and wait out periods of underperformance.
Your advisor will consider your:
- Comfort with extreme volatility and periods of underperformance.
- Conviction in the potential value of active and willingness to pay extra costs and take on additional risk.
- Investment timeline, and whether it will allow you to realize the long-term growth potential of the active strategy.
- Tax situation, and whether it’s financially advantageous for you to invest in funds that are expected to have a higher tax burden than index funds.
The combination of advice + active can lead to powerful results.
Explore our active roots and capabilities
Cost, talent, and patience have given us an edge when it comes to active investing.
See how teams from around Vanguard and around the world collaborate to find opportunities for our clients.
On screen: Christopher W. Alwine, Global Head of Credit, Fixed Income Group
Christopher: Our roots are really in active management, going back to 1929 with the launch of the Wellington™ Fund. Today we have over $1.3 trillion in active assets in over 70 U.S.-based funds.
On screen: Arvind Narayanan, Senior Portfolio Manager, Fixed Income Group
Arvind: Our active fixed income process at Vanguard is really built around 3 key tenets. First, having a long-term perspective. Second is to have diversified sources of alpha, where we’re not reliant on a single market risk factor to drive returns in the portfolio. And third is to have a disciplined approach to risk-taking, where our cost advantage gives us that benefit and allows us to be patient and take risk in the market only when the opportunities are there.
On screen: Matthew C. Brancato, Principal, Institutional Investor Services
Matthew: Our active funds have outperformed over the last 10 years. We’ve been able to do that by getting 3 things right: cost, talent, and patience. We’ve allowed investors to keep more of their return. We’ve hired some of the best managers in the world, and we’ve been patient in allowing that alpha to materialize over a period of time.
On screen: Sara Devereux, Global Head of Fixed Income
Sara: Our active edge in fixed income investing revolves around compounding alpha. We focus on a diversified set of reliable strategies that are repeatable and scalable, and we don’t have an overreliance on large macro bets. In addition, we have a differentiated risk framework that is strengthened by our low fees. This gives us the breathing room to take risk up and down according to the opportunity set, and ultimately results in the best risk-adjusted returns over time.
On screen: Kaitlyn Caughlin, Global Head of IMG Risk
Kaitlyn: We complement our internal approach with external partnerships. Many investors don’t realize the depth of our subadvised active franchise, where we actually can complement our internal expertise with expertise that’s built in many other firms around the world.
On screen: John Ameriks, Global Head of Quantitative Equity Group
John: A lot of the rigor comes in in the debates that we have. A lot of people with very strong academic backgrounds—Ph.D.s in finance, economics, mathematics, a couple of physicists thrown in as well—who bring a variety of different lenses to analyzing whether a model is well-designed, whether it’s fit for purpose, and how it fits into all of the pieces of the process.
On screen: Sam Priyadarshi, Global Head of Portfolio Risk and Derivatives
Sam: On a typical day, my team is looking at portfolios and our positions, and how they’re trending, how the market is trending. They’re monitoring geopolitical events, macro events, movements in the marketplace. It’s a very fast-paced, dynamic, and fluid workplace.
On screen: Gemma Wright-Casparius, Senior Portfolio Manager, Fixed Income Group
We work in conjunction with the investment strategy team, so the economists at Vanguard, and we define where we see the spectrum of probabilistic outcomes in the marketplace: What’s our central view, what’s our tail risks up and down from that.
Christopher Alwine: Successful investing requires a long-term perspective as well as a disciplined approach. So you’re going to see a very collaborative environment, with a very focused team looking to drive value into the portfolios by identifying those opportunities that make sense to implement.
John Ameriks: We’re looking to try to find an insight that others may find harder to uncover, or may be not patient enough to take advantage of. And that just takes an awful lot of work and focus and rigor to get right.
Important information:
For more information about Vanguard funds, visit vanguard.com to obtain a prospectus or, if available, a summary prospectus. Investment objectives, risks, charges, expenses, and other important information about a fund are contained in the prospectus; read and consider it carefully before investing.
For the three-year period ended September 30, 2021, 7 of 7 Vanguard money market funds, 46 of 52 bond funds, 6 of 11 balanced funds, and 22 of 45 stock funds, or 81 of 115 Vanguard funds outperformed their peer group averages. For the five-year period ended September 30, 2021, 7 of 7 Vanguard money market funds, 49 of 51 bond funds, 6 of 7 balanced funds, and 28 of 38 stock funds, or 90 of 103 Vanguard funds outperformed their peer group averages. For the ten-year period ended September 30, 2021, 7 of 7 Vanguard money market funds, 39 of 44 bond funds, 6 of 6 balanced funds, and 29 of 36 stock funds, or 81 of 93 Vanguard funds outperformed their peer group averages.
Only funds with a minimum three-, five-, or ten-year history, respectively, were included in the comparison. Results will vary for other time periods. Source: Lipper, a Thomson Reuters Company. Note that the competitive performance data discussed represent past performance, which is not a guarantee of future results, and that all investments are subject to risks. For the most recent performance, visit our website at www.vanguard.com/performance.
As of September 30, 2021, Vanguard managed $1.7 trillion in actively managed assets. All investing is subject to risk, including the possible loss of the money you invest.
Investments in bonds are subject to interest rate, credit, and inflation risk. Diversification does not ensure a profit or protect against a loss.
©2021 The Vanguard Group, Inc. All rights reserved. Vanguard Marketing Corporation, Distributor.
Potential outperformance at a fraction of the industry cost***
- Explore the funds
- Vanguard Capital Opportunity Fund
- Vanguard Advice Select International Growth Fund
- Vanguard Advice Select Dividend Growth Fund
- Vanguard Advice Select Global Value Fund
- Vanguard International Core Stock Fund
The 5 stock funds included in Vanguard Personal Advisor's active strategy are thoughtfully designed and managed by top-tier portfolio managers who have a history of delivering results for Vanguard clients.
This strategy gives you the opportunity to outperform the global stock market at a fraction of the industry cost.
This aggressive growth fund invests in companies of various sizes that the managers believe will grow in time, but may be volatile in the short-term. The fund managers have a long-term perspective and ignore short-term market ”noise.“ This investment approach, coupled with a focus in certain market sectors, including information technology and health care, helps differentiate the fund from its benchmark and peer funds.
Fund manager: PRIMECAP Management Company
Expense ratio: 0.36% (68% less than average)***
The International Growth Fund focuses on non-U.S. companies with high growth potential. The fund employs an aggressive approach that attempts to capitalize on global economic expansion. For example, an attractive investment opportunity could be a non-U.S. consumer-products company that is experiencing rapid earnings growth. Because it invests in non-U.S. stocks, including those in developed and emerging markets, the fund can be more volatile than a domestic fund.
Fund manager: Baillie Gifford Overseas Ltd.
Expense ratio: 0.42% (63% less than average)***
This fund is designed to provide investors with some income while offering exposure to dividend-focused companies across all industries. The fund focuses on high-quality companies that have both the ability and the commitment to grow their dividends over time. One of the fund’s risks is the possibility that returns from dividend-paying stocks will trail returns from the overall stock market during any given period. Another risk is the volatility that comes with the fund's full exposure to the stock market.
Fund manager: Wellington Management Company LLP
Expense ratio: 0.45% (49% less than average)***
The fund will provide global, all-cap, contrarian value exposure by investing in discounted companies that are being avoided or overlooked due to uncertainty or complacency. The investment style involves identifying deeply mispriced companies with moderate risk expectations and blends it with strategies designed to exploit inefficiencies in the market, and in particular those created by behavioral biases.
Fund manager: Wellington Management Company LLP
Expense ratio: 0.40% (63% less than average)***
This actively managed fund offers exposure to developed and emerging non-U.S. markets and will be diversified across a range of sectors. The fund’s advisors look to construct a portfolio that blends growth and value styles to serve as a core holding in a globally balanced portfolio. Because it invests in non-U.S stocks, the fund can be more volatile than a U.S. stock fund.
Fund manager: Wellington Management Company LLP
Expense ratio: 0.35% (72% less than average)***
The 5 stock funds included in Vanguard Personal Advisor's active strategy are thoughtfully designed and managed by top-tier portfolio managers who have a history of delivering results for Vanguard clients.
This strategy gives you the opportunity to outperform the global stock market at a fraction of the industry cost.
This aggressive growth fund invests in companies of various sizes that the managers believe will grow in time, but may be volatile in the short-term. The fund managers have a long-term perspective and ignore short-term market ”noise.“ This investment approach, coupled with a focus in certain market sectors, including information technology and health care, helps differentiate the fund from its benchmark and peer funds.
Fund manager: PRIMECAP Management Company
Expense ratio: 0.36% (68% less than average)***
The International Growth Fund focuses on non-U.S. companies with high growth potential. The fund employs an aggressive approach that attempts to capitalize on global economic expansion. For example, an attractive investment opportunity could be a non-U.S. consumer-products company that is experiencing rapid earnings growth. Because it invests in non-U.S. stocks, including those in developed and emerging markets, the fund can be more volatile than a domestic fund.
Fund manager: Baillie Gifford Overseas Ltd.
Expense ratio: 0.42% (63% less than average)***
This fund is designed to provide investors with some income while offering exposure to dividend-focused companies across all industries. The fund focuses on high-quality companies that have both the ability and the commitment to grow their dividends over time. One of the fund’s risks is the possibility that returns from dividend-paying stocks will trail returns from the overall stock market during any given period. Another risk is the volatility that comes with the fund's full exposure to the stock market.
Fund manager: Wellington Management Company LLP
Expense ratio: 0.45% (49% less than average)***
The fund will provide global, all-cap, contrarian value exposure by investing in discounted companies that are being avoided or overlooked due to uncertainty or complacency. The investment style involves identifying deeply mispriced companies with moderate risk expectations and blends it with strategies designed to exploit inefficiencies in the market, and in particular those created by behavioral biases.
Fund manager: Wellington Management Company LLP
Expense ratio: 0.40% (63% less than average)***
This actively managed fund offers exposure to developed and emerging non-U.S. markets and will be diversified across a range of sectors. The fund’s advisors look to construct a portfolio that blends growth and value styles to serve as a core holding in a globally balanced portfolio. Because it invests in non-U.S stocks, the fund can be more volatile than a U.S. stock fund.
Fund manager: Wellington Management Company LLP
Expense ratio: 0.35% (72% less than average)***
- Explore the funds
- Vanguard Capital Opportunity Fund
- Vanguard Advice Select International Growth Fund
- Vanguard Advice Select Dividend Growth Fund
- Vanguard Advice Select Global Value Fund
- Vanguard International Core Stock Fund
The 5 stock funds included in Vanguard Personal Advisor's active strategy are thoughtfully designed and managed by top-tier portfolio managers who have a history of delivering results for Vanguard clients.
This strategy gives you the opportunity to outperform the global stock market at a fraction of the industry cost.
Explore the funds
This aggressive growth fund invests in companies of various sizes that the managers believe will grow in time, but may be volatile in the short-term. The fund managers have a long-term perspective and ignore short-term market ”noise.“ This investment approach, coupled with a focus in certain market sectors, including information technology and health care, helps differentiate the fund from its benchmark and peer funds.
Fund manager: PRIMECAP Management Company
Expense ratio: 0.36% (68% less than average)***
The International Growth Fund focuses on non-U.S. companies with high growth potential. The fund employs an aggressive approach that attempts to capitalize on global economic expansion. For example, an attractive investment opportunity could be a non-U.S. consumer-products company that is experiencing rapid earnings growth. Because it invests in non-U.S. stocks, including those in developed and emerging markets, the fund can be more volatile than a domestic fund.
Fund manager: Baillie Gifford Overseas Ltd.
Expense ratio: 0.42% (63% less than average)***
This fund is designed to provide investors with some income while offering exposure to dividend-focused companies across all industries. The fund focuses on high-quality companies that have both the ability and the commitment to grow their dividends over time. One of the fund’s risks is the possibility that returns from dividend-paying stocks will trail returns from the overall stock market during any given period. Another risk is the volatility that comes with the fund's full exposure to the stock market.
Fund manager: Wellington Management Company LLP
Expense ratio: 0.45% (49% less than average)***
The fund will provide global, all-cap, contrarian value exposure by investing in discounted companies that are being avoided or overlooked due to uncertainty or complacency. The investment style involves identifying deeply mispriced companies with moderate risk expectations and blends it with strategies designed to exploit inefficiencies in the market, and in particular those created by behavioral biases.
Fund manager: Wellington Management Company LLP
Expense ratio: 0.40% (63% less than average)***
This actively managed fund offers exposure to developed and emerging non-U.S. markets and will be diversified across a range of sectors. The fund’s advisors look to construct a portfolio that blends growth and value styles to serve as a core holding in a globally balanced portfolio. Because it invests in non-U.S stocks, the fund can be more volatile than a U.S. stock fund.
Fund manager: Wellington Management Company LLP
Expense ratio: 0.35% (72% less than average)***
- Funds
- Vanguard Capital Opportunity Fund
- Vanguard Advice Select International Growth Fund
- Vanguard Advice Select Dividend Growth Fund
- Vanguard Advice Select Global Value Fund
- Vanguard International Core Fund
Your personalized recommendation is coming
Before your next appointment, you’ll receive an email invitation to begin your assessment. At the appointment, your advisor will review your assessment, go over your personalized recommendation, and answer any questions.
Still have questions? More about our active strategy
Our team dedicated to fund oversight began by considering a wide range of potential active strategies. They prioritized strategies that have already been successfully implemented by some of the most renowned fund managers in the world—fund managers who have a history of delivering results for Vanguard investors. The chosen strategies are based on thorough, proprietary research that can uncover valuable insights not reflected in raw data and thus being overlooked by the markets.
Two of the funds selected for the strategy are existing Vanguard funds. The other 3 funds are new.
The enhanced active strategy uses funds that are more concentrated in terms of their number of holdings. We believe these funds are most appropriate as part of an advised portfolio because advisors can ensure our clients understand what to expect from the funds, their allocations are consistent with their risk tolerance, and they’re supported and coached through periods of underperformance.
Vanguard Personal Advisor Services will continue to recommend active funds for the bond portion of client portfolios where it makes strategic sense. Almost half of our clients’ bond portfolios are currently invested in active funds, and we expect that to continue.
The assessment will walk you through a few questions designed to help your advisor understand your desire for and conviction in an active strategy, as well as your comfort with active risk. The active strategy can and likely will lead to periods of underperformance that are of greater length, magnitude, and frequency than you’d experience with index investing.
In addition, your advisor will review your goals and portfolio to make sure active is a good fit for your personal situation.
Once the assessment is complete, your advisor will meet with you to walk through the recommendation and answer questions. If you’re already invested in active funds, your advisor will help you determine whether it’s more advantageous to keep your current active funds or implement the new strategy.
*For the three-year period ended March 31, 2022, 6 of 6 Vanguard money market funds, 50 of 54 bond funds, 8 of 11 balanced funds, and 29 of 46 stock funds—for a total of 93 of 117 Vanguard funds—outperformed their Lipper peer-group averages. For the five-year period ended March 31, 2022, 6 of 6 Vanguard money market funds, 49 of 51 bond funds, 6 of 7 balanced funds, and 27 of 39 stock funds—for a total of 88 of 103 Vanguard funds—outperformed their Lipper peer-group averages. For the 10-year period ended March 31, 2022, 6 of 6 Vanguard money market funds, 41 of 44 Vanguard bond funds, 6 of 6 Vanguard balanced funds, and 29 of 37 Vanguard stock funds—for a total of 82 of 93 Vanguard funds—outperformed their Lipper peer-group averages. Results will vary for other time periods. Only actively managed funds with a minimum 10-year history were included in the comparison. Source: Lipper, a Thomson Reuters Company. The competitive performance data shown represent past performance, which is not a guarantee of future results. View fund performance
**Over the past 15 years, only about 37% of active stock fund managers and 19% of active bond fund managers have outperformed their designated benchmarks. Sources: Vanguard calculations, using data from Lipper, a Thomson Reuters Company. Based on funds’ excess returns relative to their prospectus benchmark for the 15-year period ended March 31, 2020. Only funds with a minimum 15-year history were included in the comparison. Results for other periods will vary.
***The Lipper category for Vanguard Advice Select International Growth Fund is international large-cap growth with an average expense ratio of 1.13%. The Lipper category for Vanguard Advice Select Global Value Fund is global multi-cap value with an average expense ratio of 1.09%. The Lipper category for Vanguard Advice Select Dividend Growth Fund is large-cap core with an average expense ratio of 0.89%. The Lipper category for Vanguard International Core Stock Fund is international large-cap core with an average expense ratio of 1.23%. The Lipper category for Vanguard Capital Opportunity Fund is multi-cap growth with an average expense ratio of 1.12%. Source: Lipper, a Thomson Reuters Company, as of December 31, 2021.
For more information about Vanguard funds or ETFs, visit vanguard.com to obtain a prospectus or, if available, a summary prospectus. Investment objectives, risks, charges, expenses, and other important information about a fund are contained in the prospectus; read and consider it carefully before investing.
All investing is subject to risk, including the possible loss of the money you invest. Diversification does not ensure a profit or protect against a loss. There is no guarantee that any particular asset allocation or mix of funds will meet your investment objectives or provide you with a given level of income.
Advice services are provided by Vanguard Advisers, Inc., a registered investment advisor, or by Vanguard National Trust Company, a federally chartered, limited-purpose trust company.