5 Best Actively Managed Vanguard Funds

Vanguard funds have become synonymous with index investing.

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Vanguard funds have become synonymous with index investing. But if you limit yourself to the firm’s passive strategies, you’ll miss some gems. Indeed, Vanguard fund managers actually invest more of their own money in the firm’s actively managed funds than in their index funds.

Vanguard has such good actively managed funds for two major reasons. One, because Vanguard is owned by its mutual fund shareholders, it has no outside owners to pay — and thus can keep its fees lower than most other fund firms. The other reason: Despite founder Jack Bogle’s advocacy of index-fund investing, he was surprisingly good at identifying talented outside stock pickers and signing them up to manage assets for Vanguard during his tenure.

Soon after Bogle founded Vanguard, he signed up Wellington Management, where he had formerly worked, to manage funds for Vanguard. Wellington runs some superb funds. His other find was Primecap, which was formed by three talented managers who left American Funds in 1983. Bogle signed them to launch Vanguard Primecap (VPMCX), one of the most successful mutual funds of the past 45 years.

Here are the five most impressive Vanguard actively managed funds that are open to new investors. (Note: Some are only available directly through Vanguard.)


Data is as of Sept. 20, 2018.

Steven Goldberg
Contributing Columnist, Kiplinger.com
Steve has been writing for Kiplinger's for more than 25 years. As an associate editor and then senior associate editor, he covered mutual funds for Kiplinger's Personal Finance magazine from 1994-2006. He also authored a book, But Which Mutual Funds? In 2006 he joined with Jerry Tweddell, one of his best sources on investing, to form Tweddell Goldberg Investment Management to manage money for individual investors. Steve continues to write a regular column for Kiplinger.com and enjoys hearing investing questions from readers. You can contact Steve at 301.650.6567 or sgoldberg@kiplinger.com.