Ivanna Hampton: Vanguard is evolving as it grows bigger while keeping its investor-first reputation intact. Investing Insights recently examined the 2026 outlook for the large asset manager in a two-part series. I spoke with Dan Sotiroff on April 8, 2026. Here’s what the Vanguard analyst and associate director of US passive strategies research for Morningstar had to say about the firm.
It’s almost Salim Ramji’s second anniversary as the CEO of Vanguard. How has he influenced the firm since taking the helm?
Dan Sotiroff: So far, so good. I’d say he’s been pretty busy compared to past CEOs. We’re seeing a lot of stuff come out. As evident, you gave me something like 20 questions here to answer. So, we got a lot to go through, but there’s a lot going on. There’s a lot of questions. But I would say for the most part, it’s been pretty good. A lot of the stuff we’ve seen has been very Vanguard-like. Some of it expected, some of it unexpected, like the fee cuts. Did a lot of new ETFs last year. They did 15 ETFs. Most of those were fixed-income, which I know we’re going to talk about, but that’s the most on-year they’ve had. You have to go back to 2010, I think was when they had more ETF launches. So, doing a lot of cool stuff there. And then the fee cuts, nice surprise and not an insignificant amount of money that they’re giving up over the coming years.
I know we wanted to talk about that a little bit. It’s probably the one area that we’re still questioning is private assets right now, but they just haven’t come out with a lot of stuff yet. We’re kind of in wait-and-see mode there.
Hampton: What grade would you give them?
Sotiroff: We do grade them. We got a scale between 1 and 5, low to high, and right now, Vanguard is a 5, or a high, right now. There’s not too many asset management firms that get that rating. That rating is sticking until we see substantial enough evidence to change our minds on that.
Hampton: One of the big changes underway is the company splitting into two investment advisors: Vanguard Capital Management and Vanguard Portfolio Management. What are the responsibilities of each unit, and who’s leading them?
Sotiroff: Good question. I did put some information on this last year when they announced it, but it’s been a little while. Vanguard Capital Management, let’s start with that. My numbers are a little stale here, but at the time they announced it, that was definitely the larger of the two entities. Somewhere around 75% to 80% of Vanguard’s assets under management were with Capital Management. That includes all the bond funds, the broad index funds. So you think of [Vanguard] 500 VFIAX and Total Stock Market VTSAX, these USD 2 trillion mutual funds that are out there. International index funds are also part of that. And then any passive multi-asset funds. Think of the Target Retirement Funds that a lot of people may own in a retirement account. It’s index-heavy, is the way I think of it in Capital Management, although portfolio management also has some index funds, but the bigger ones are going to reside with Capital Management.
Actually, there are two leaders leading that. Rodney Comegys has the title of CIO, and he’s also been Vanguard’s head of equity indexing for a number of years. And then Sara Devereux also has the title of CIO, but she’s more head of global fixed income, so more on the bond side of the organization. That’s probably why they have two leaders there, because there is this mix of fixed income and equity. And so that makes sense. And it is the larger of the two, like I said. So, there’s a lot going on there. Portfolio Management, on the other hand, that’s where you’re going to find all the actively managed funds and some of the smaller index funds. I said there are some index funds there. Think of the Russell and S&P style box funds. And then the active multi-asset funds. So, think of Wellington Fund VWENX. Those would all land in Portfolio Management.
John Ameriks is CIO of Vanguard Portfolio Management. He was their head of the Quantitative Equity Group before that. I think he still has some role with QEG. That’s kind of how they’re laid out. The one thing I want to be really clear about. I’ve seen people floating rumors and speculation out there about how Vanguard was splitting these two up, and that was potentially going to be bad. And it’s not bad. Both entities, both subsidiaries are going to have the same resources, the same operations, the same processes, all that type of stuff. This is kind of a technicality. I’m not really worried about this if I’m an investor in either an active Vanguard fund or a passively managed Vanguard fund. Vanguard said they’re doing this to help them out as they continue to grow bigger and bigger and bigger because they are growing bigger and bigger and bigger.
They were short on details on that, but I have to believe there’s some technical reason in the background they’re doing this. I’m not worried about this if I’m an investor. And both of them report to global CIO Greg Davis at the end of the day. So, it’s still more or less one entity. There’s just sort of a technicality of why they’re splitting this up, and we’re still trying to figure that out, I guess.
Hampton: Why do this now after 50 years, and how would it benefit an everyday investor?
Sotiroff: Again, we don’t know the specific reason. We have had some theories. I did write a piece about this when they announced it. We thought this was more for a capacity management-type thing because we’ve seen some other larger firms do something similar in the past, and they said maybe, but it doesn’t really resolve all those problems for us. Certain regulators would still look at the entire fund complex and certain issues. I still think it’s tied to Vanguard size. They’re growing like a weed, and they’re so big. I mean, they’re managing somewhere like USD 12 trillion roughly today. But the other thing you’ve got to remember is they have something like 50 million clients, and they own a reasonably sized amount of most publicly traded stocks, at least here in the US. So, there are a lot of questions out there about why they did it.
I think all of that factors into the decision to do that now.
