Vanguard in 2025: What Investors Need to Know

Key Takeaways

• For the most part, Vanguard funds performed with what we would expect across the board in 2024.
• There were a few changes to management at Vanguard.
• There isn’t a lot of changes to Morningstar Medalist Ratings for Vanguard funds, and that’s one of the reasons we like Vanguard as long-term investments.
• Unlike a lot of other managers that are sort of struggling, Vanguard is actually winning when it comes to flows.
• We’ve seen a lot more launches coming out of Vanguard than we have seen in a long time.
• Vanguard announced that it had brought in a new CEO from BlackRock, Salim Ramji. Vanguard’s new CEO wants to grow the firm to be relevant to newer investors and to meet the needs of retirees in drawdown mode.
• Vanguard is holding a virtual shareholder meeting in late February where fundholders are going to vote on the board of trustees for the funds.
• In 2025, we’re looking for what the leadership is prioritizing and what they investing in as far as the business goes.

Susan Dziubinski: I’m Susan Dziubinski with Morningstar. Vanguard made headlines in 2024 when it named its first outsider to the CEO spot. What should Vanguard investors be on the lookout for in 2025? And what questions does Morningstar have for management in the new year? Joining me for a comprehensive conversation about Vanguard today is Dan Sotiroff. Dan is a senior manager research analyst with Morningstar, as well as our specialist on Vanguard. Thanks for being here today, Dan.

Daniel Sotiroff: Thanks for having me again, Susan.

Vanguard Funds in 2024

Dziubinski: Good to see you. All right, so let’s start with a look back at Vanguard in 2024, maybe talking a little bit about the performance of its biggest funds. Did they perform as one would’ve expected for the year?

Sotiroff: So jokingly, we were just talking about this, right? The biggest funds are the index funds. So as you would expect when the market’s up, they’re going to be up. So that all looks great, tracking errors in line with what we would expect. So no surprises there, really. When you get outside of the index funds, it gets a little more nuanced, but one of the things we love about Vanguard and their actively managed funds is that they tend to pursue this relatively predictable sort of strategy. They’re not taking huge bets against the index. Some are a little more active than others, but for the most part, they’re relatively predictable. So when markets are up, they’re going to be up.

They may not be performing quite as well because the fees are a little bit higher and a lot of active managers tend to have a little bit of a value tilt, meaning they’re underweighting the biggest stocks. So those are some of the things to keep in mind when you’re looking at the performance of an individual fund. But by and large, a lot of them are doing what we would expect to be doing. If it were otherwise, we would be taking action and probably making some downgrades or something like that. But for the most part they’re pretty much in line with what we would expect across the board.

Vanguard Fund Performance Surprises in 2024

Dziubinski: Well, then talk about were there any performance surprises on the upside or to the downside in 2024?

Sotiroff: So the one I want to point out here,--and we’re actually going to talk about this a little bit later on when we get to flows because I know you wanted to talk about that—but the Primecap funds over the last couple of years, they’ve been through a bumpy ride. They’ve had some years where they’ve done great, they’ve had some years where they haven’t done so great, but when it washes out over the last five years—we’re talking beginning 2020 pre-covid to the end of December—Vanguard has three Primecap funds and they didn’t really look great on an annualized basis. So Vanguard Primecap, this is the OG Primecap fund that was launched back in the mid-’80s, that underperformed the Morningstar US LargeMid index by about 2.25 percentage points per year, so meaningful deficit. The other one that you want to look at there is Vanguard Capital Opportunity by a similar amount. These are all large-blend funds, so it’s a very competitive category. The S&P 500 is really hard to beat, and then the other one, Primecap Core was off by about 3 percentage points per year. So by and large, they are underperforming again, they’re tilting away from the biggest stuff that’s been driving the market, and we’ve been in a very concentrated market for the last few years. So in some ways that isn’t surprising. It’s almost kind of expected.

The big thing to reiterate here, for people that do own these, we still have a lot of conviction in the process and the people behind them. They have some of the highest marks, High People, HighProcess, Gold ratings on all those funds. So still long-term, we have a lot of conviction in them, and so this is what you get with active management: They’re going to go through these spells where they don’t look so great; they’re going to go through spells where they look awesome. You’re just going to have to tough it out probably.

How Manager Changes at Vanguard Affected Their Morningstar Medalist Ratings

Dziubinski: Right. How about manager departures or subadvisor changes at Vanguard last year? Were there any that you would say were particularly notable, and if yes, were there any changes to any of the Morningstar Medalist Ratings as a result of a manager change?

Sotiroff: So, there were a few changes. The first one, and I think you actually brought this up, was Jean Hynes on Vanguard Health Care. This was somewhat of an expected departure. If you go back to October 2020, Wellington actually announced that she was going to become the CEO of the Wellington Group, and they didn’t really forecast who was going to be her replacement on that fund, I guess is the way to say it. But we found that out in 2023, they added Rebecca Sykes as a comanager on that fund. So they actually co-ran the fund for about a year and a half, and now Jean Hynes is officially stepping off and she’s going to take on sole responsibility as a CEO. The good thing is this is kind of a model for how you want to do manager transitions. You name a successor, you bring the successor in for a little bit, awhile, there’s a little bit of a transition period, and then … Jean Hynes is not going anywhere. She’s still going to be there if you need her, but suffice to say, very well-organized transition. So we’re glad to see that that got over with. Similar to that, Donald Kilbride on Vanguard Advice Select Dividend Growth Fund VADGX is also going to be leaving that fund, and that’s going to be handed off to Peter Fisher, who’s been working with him since 2012, and I think we brought this up in prior conversations. He’s been the longtime manager of Vanguard Dividend Growth VDIGX. We loved that fund for many, many years.

Likewise, Peter Fisher took over that fund last year as he stepped down. So this has been part of a bigger transition plan that Vanguard and Wellington have been coordinating behind the scenes, and again, another model of how you should be transitioning from one manager to another. Largely the process isn’t really changing. We still like that. That’s a High-Process-rated fund. We did downgrade the People Pillar on that to Above Average from High just because this is a new manager. You have some other people that are changing on the team. So we want to make sure the team is gelling and everything’s working before we reassign that High People Pillar again in the future.

The one other thing I would point out—this was a recent announcement, came out at the end of last year—was Star Fund. So this is one of those multi-asset funds. It’s a combination of stocks and bonds. It’s basically a 60/40 portfolio, but it’s built up of other Vanguard actively managed funds. So the big change there is they’re going to be changing the underlying funds. It’s still going to be a 60/40 portfolio going forward. The split between foreign and domestic is staying the same, what you should expect, a little bit more exposure to large caps. They’re getting rid of some of the smid exposure, a little bit more exposure to value stocks. You think about just the dynamics of what’s been going on in the market. They’re going to be underweighting some of the biggest stuff out there that’s looking a little bit more expensive right now, and then a little less duration, a little more credit risk in the bond portfolio. They’re actually making a big change to the bond portfolio there, but we have more details on that if you look up the Star Fund. Suffice to say that those look like reasonable changes. So no huge surprise there. It’s still going to be a lot of what investors expect: 60/40 portfolio at the end of the day.

Did Morningstar Change its Medalist Rating on Notable Vanguard Funds for 2025?

Dziubinski: Did Morningstar upgrade or downgrade its Medalist Ratings on any what we might call “notable” Vanguard funds last year, and what were those changes?

Sotiroff: Not a lot. And again, this goes back to what we were talking about with performance, right? There isn’t a lot that changes, and that’s one of the reasons we like Vanguard. As long-term investments, you shouldn’t see a lot of things that are changing, so not a lot of changes. You might see a Medalist Rating go from Gold to Silver or Silver to Gold or something like that. You might see a notch or two change. Some of that actually might be driven by the model that we’re using in the background to actually assign the Medalist Rating. The pillars for the most part are not changing unless you see a manager change, like we just kind of covered—those instances where maybe we would downgrade something, but for the most part, most stuff has been pretty stable, which is actually great. That’s what you want to see, right? It’s pretty boring, but boring tends to win over the long run. So we’re pretty happy with that.

The things that I think are useful to point out, about Vanguard Core Bond and Core-Plus bonds. These are new ETFs that came out. They were sort of mimicking mutual funds that Vanguard has already had in the mix now for a couple of years. We actually did assign a rating to those at the end of last year. So the Process came out at Above Average, People Pillar came out at Average, and overall those came out at Bronze. That’s Vanguard Core Bond and Core-Plus Bond, both the ETF and mutual fund because they’re following the same strategy.

And then the other new one we picked up was Vanguard Emerging Markets Bond Investor VEMBX, and that came out at an Above Average Process, Above Average People. Also a Bronze-rated fund overall. So emerging-markets bond’s a little bit more competitive, harder to get those Gold and Silver ratings there. But that’s actually pretty good marks, and these are very cheap funds within their categories. So something to look into if you’re interested in any of those sort of fixed-income categories.

Dziubinski: All right, well it looks like from the investment perspective, the fund perspective: as expected in 2024, which is what we want.

Sotiroff: That’s a very good report card.

Vanguard Fund Flows for Active vs. Index Funds

Dziubinski: Exactly. All right, so talk a little bit, Dan, about flows last year at Vanguard’s funds, the index funds versus the active funds. How would you describe the story on the flows front?

Sotiroff: So to sum it up, it’s not a problem, right? Vanguard’s doing great in this department. Unlike a lot of other managers that are sort of struggling, Vanguard is actually winning and winning by a lot. So if you add up their US mutual funds and ETFs, Vanguard brought in $222 billion last year. It’s a mountain of money that was second only to BlackRock, which I had at about $285 billion. So they may not be first place, but there isn’t a lot to complain about there. They’re doing great.

When you dig beneath the surface a little bit more, it gets a little bit more nuanced. Its ETFs are really proven to be popular, right? No surprise. A lot of them are index-tracking and they’re coming out with a lot of the newer fixed-income type stuff now. So Vanguard ETFs took in $306 billion. Its mutual funds lost $84 billion. So that’s really just endemic of a much broader trend we’re seeing across the asset-management industry. A lot of people are leaving mutual funds and getting into low-cost, really more tax-efficient ETFs. Those are the two driving forces, taxes and fees.

But there’s another really interesting point here, and I’m going to steal a quote from Ryan Jackson who wrote this in his article actually a few weeks ago, about the end of year flows in 2024: Vanguard S&P 500 ETF VOO inhaled $117 billion itself.

Think about it. $117 billion of one ETF. That destroyed the previous individual ETF record of $51 billion and exceeded the 2024 flows to every ETF provider except iShares and naturally … That’s just a stunning number for a single ETF to take in, and it just shows you what is going on in this industry—the shift away again from actively managed mutual funds in the passively managed tax-efficient ETFs. And so that just really underscores it. So to circle back again to Primecap like we were talking about before, so the performance hasn’t been great over the last couple of years and I think the flows are kind of starting to show that, right? So Primecap and Primecap Core, remember that Vanguard opened those up in June because flows performance haven’t been great. So it’s like they’ve got capacity, they can take in some new money. So they opened those back up in June, but the flows really haven’t been there. They’ve continued to lose money ever since then. Primecap, this is the original Primecap, lost about $34 billion over, or excuse me, $3.4 billion. Let me correct that. $3.4 billion over those six months. Primecap Core lost around $950 million, close to a billion dollars over that period. So again, they’re struggling a little bit. This isn’t something that threatens the viability of the funds. These are very big funds, so they can absorb that a little bit, but it is something to keep an eye on and we’re watching.

And the other important thing with flows is you think about capital gains distributions because a lot of that can trigger managers to have to sell positions. Hasn’t been a big problem so far, but again, something worth keeping an eye on if you are invested in those funds.

Vanguard ETF Launches Investors Should Have on Their Radar

Dziubinski: We talked a little bit, of course, about that shift toward the ETF part of the business rather than the mutual fund part of the business. Did Vanguard launch, would you say, any notable ETFs in 2024 that maybe investors should have on their radar?

Sotiroff: Yes. So this has been an area where they’ve been very busy. We’ve seen a lot more launches coming out of Vanguard in the last, say, year and a half than we probably have seen in a long time. A lot of them fit with the expectations that we have for them. So it’s a lot of fixed income, it’s a lot of ETFs, which is proving to be pretty good.

So you brought up active muni-bond ETFs launched in November. So Vanguard Core Tax-Exempt Bond ETF VCRM, that’s a broad US muni-bond ETF, right? Cross durations across credit, well, investment-grade, I should say. And then Vanguard Short Duration Tax-Exempt Bond ETF VTEB. So that’s more focused at the short end of the curve, a little bit less interest-rate risk with that sort of vehicle. Very cheap, 12 basis points.

We’re still in the very early innings of this, so it’s hard to say how popular they’re going to be, how they’re going to resonate, but they have a seasoned manager from their management rank. Stephen McFee is going to be responsible for them. So all of that type of stuff seems to be in order. I think we’re just kind of waiting to see how these things shake out, how popular they prove to be and make a decision ultimately: Do we want to bring these under coverage or not and assign a rating to them? So those new muni-bond options there.

The rest of it has been short duration type stuff, really, at the very, very short end of the curve. So Vanguard Short-Term Treasury ETF VGSH and Vanguard 0-3 Month Treasury Bill ETF VBIL, basically two T-bill options. The very safest of the safest type stuff in the bond world. This is the spicy hot sauce at Vanguard. So they’re index-tracking, very boring, 7 basis points. They’re very cheap. No expected launch date yet. They said sometime in Q1, so something to watch out for if you’re interested in T-bills people, right? And then the other one is a little bit more nuanced. It is an actively managed option. Vanguard short duration bond ETF BSV, actively managed multisector short-term bond ETF, can hold up to about 25% high yield. We’ll see what that actually looks like in practice because sometimes that’s just a provision written in the prospectus. Expected expense ratio of around 15 basis points a year. So again, very cheap. I expect that’s probably going to follow a similar management process to what we’ve seen from the other core bond ETFs and stuff like that. Very much a team approach sort of thing. So there’s lots to keep an eye on there with the new launches, and I suspect we’re probably going to see more in the future.

Vanguard’s New Former BlackRock CEO

Dziubinski: So that’s a look at the funds and the investments. Now, you and I sat down about six months ago after Vanguard announced that it had brought in a new CEO from BlackRock, Salim Ramji. Now he’s only been on the job for six months, but what are your impressions so far of what he’s been saying? Anything that he’s been doing?

Sotiroff: This is like the $10 trillion question. It’s what everybody wants to know. So on the surface, you look at all the interviews he’s been doing, all the press he’s been doing. He’s saying all the right things, and I think he gets it. He’s a smart guy. He’s been around this industry for a while. He understands what Vanguard is, what it means to the industry, what it’s done for millions of investors. I’m pretty much sold on that. I’m not concerned about that. So far everything I would say has played out generally as I would expect. The first few months are pretty boring. And usually that’s just the CEO getting into the office, trying to figure out the lay of the land and what’s going on and how do I fit in here and everything like that.

You usually got to wait about six to 12 months with any CEO transition before you actually start to see things move around, start to take shape, and you can kind of see what he’s doing. In a lot of ways, Vanguard has been right on schedule, maybe a little bit early. So December, they announced they were going to do a little bit of a reorg. Basically what that means is they’re going to carve out the wealth and advice module from their Vanguard personal investor division, and they’re going to make that its own stand-alone division. And I don’t think there’s really anything you have to read into it. Basically it’s just Vanguard saying, “Hey, we’re getting really serious about the advice and wealth business.”

We’ve known that. This is not a surprise. We’ve known they’ve been going down this path. They’re just getting a little bit more serious about it, and they’re dedicating an entire division to that effort.

The other thing I’d mentioned here is along the lines of this $10 trillion question. With an external hire, a lot of people I think were questioning this: Is this going to be a problem? Is this something that’s going to throw Vanguard off its investor-friendly ethos? I’d like to point out two things I think really … They’re food for thought, let’s put it that way. A lot of people have been focused on Salim and Salim only, and I don’t think they’ve been paying attention to what has been going on with the other leadership ranks within Vanguard. So that gives us a little bit of a clue. So what I mean by that, Buckley and McNabb, the previous two CEOs before Salim, actually had multiple roles. So yes, they were the CEO, but they were also the president of Vanguard and they were the chairman of Vanguard’s board of trustees. So they actually had three roles and multiple responsibilities associated with those roles.

When Salim came on, those responsibilities were actually split between three people. So Salim’s the CEO, he’s definitely going to be leading the company, setting its direction, charting its course or whatever you want to say. But the role of president actually went to Greg Davis, who’s been their chief investment officer now going on eight years. So very experienced Vanguard veteran. He’s been there for a quarter-century plus or minus a few years. And then the other person that took over the chairman of the board position is a man most people have never heard of named Mark Loughridge, who’s Vanguard lead independent director on the board of trustees. And he’s now going to be Vanguard’s, I believe, first nonexecutive chairman. So what you’re seeing is that actually a lot of the responsibility of leading Vanguard has been split between those three people. So it’s not like Salim is doing this on his own. He’s actually going to have some Vanguard veterans right alongside him helping him out, which is good to know. This is a really tough job. This is a very different company that has been under past CEOs. It’s going to take a lot.

The other thing I would point out to people is that, again, we just talked about flows in the amount of money. Vanguard’s winning. There’s no incentive to change anything. Most asset managers would love to be in Vanguard’s position. So it’s like, why would you go out and change this when, really, the whole investor-friendly ethos thing, that’s working, that’s what people want. They want someone they can trust and that is really prioritizing their interests. So for those two reasons, it’s really hard to see that this is really going to be anything different in the future, I guess.

Vanguard Dividing Advice and Wealth With New Former Fidelity Management

Dziubinski: Now you mentioned the advice and wealth units, that they broke off into their own group now, and they did hire someone from the outside again to oversee this. I believe someone from Fidelity, right?

Sotiroff: Yes. I think you’re referring to Joanna Rotenberg, right? I hope I’m pronouncing her last name correctly. But she came over, well, she kind of came over from Fidelity. That was her past employer. She had a brief gap in her CV, I guess I would say. But yes, she was at Fidelity for about two years, came from their wealth advice sort of business. I believe her role there actually fits exactly with what Vanguard is actually trying to do now. She actually helped carve out that wealth business from what is Fidelity’s essentially personal investors. So she helped split it up between, I believe, their brokerage unit and then sort of their wealth. So they have essentially two units now at Fidelity, and that’s in part because of her and the other people she was working with. So in a lot of ways she’s maybe a perfect fit because that’s what Vanguard’s essentially trying to do here.

But if you look back further in her CV, she also has a lot more experience in the wealth and advice side. She actually worked for BMO for 11 years before Fidelity, and then right before she left BMO and moved over to Fidelity, she was actually heading up their wealth and advice unit as well. So a lot of experience in that side of the business. Again, it sounds like what she was doing at Fidelity fits hand in glove with what’s going on at Vanguard. So on paper, great fit.

Dziubinski: Now we’ve talked about, over the past couple of years, about Vanguard and trying to move more toward advice and wealth. What are some of the challenges you think that Vanguard’s facing on that front that may be breaking it off and having a new head is going to be able to help them with?

Sotiroff: I kind of put them into two broad categories, I guess I would say.

One is value proposition. What I mean by that is if you think about Vanguard, historically, it was always sort of this direct to investor experience, and that was where they banked their business. They cut the fees out by cutting out the middlemen, the distributors, all the commissions, and everything like that. And what you got was a very cheap, very well-managed mutual fund at the end of the day, and that was the secret sauce. That was what really created all the success for the investors at the end of the day. The other thing is this was something like one of Bogle’s sacred cows. If you go back to a lot of the books he wrote about, he did not want to get into the advice business at all, and they’ve tried it on and off for the last 30 years. They started to dabble in it in the nineties and it kind of fits and starts. It kind of worked. It kind of didn’t. They’ve been getting a lot more serious about it now since the mid-2010s when they started to get into the personal advisor space, and then they added the robo-advisor. So they’ve got this very well-structured progression where you start out with the robo and you can progress into these various levels of the personal advisor services now. So it’s a much more organized, it’s a much more serious effort this time around.

But again, is that going to sell with investors? We think that remains to be seen because that’s not what Vanguard is really known for, I guess is what I’m trying to say here.

The second one I really look at is client type. When I think of what Vanguard is trying to do, this almost sounds more of a remote virtual type of financial planner setup. I don’t see them setting up brick-and-mortar stores and having … Maybe they do, I don’t know. But it really seems to fit more with those sorts of clients that are going to be a little bit more hands-off, maybe bring you your financial life and say, “Hey, here’s my money. Let’s set up a plan and I’ll check in with you a few times a year,” or something like that. So for those that just want to outsource a lot of this stuff, they get it, and they’re too busy with the rest of their life: works great for those types of clients. For those that are more hands-on and they got to be in their advisor’s office face-to-face every week or something like that, and they need a lot of … I don’t know if that’s going to work for them, maybe it does, but I have a hard time seeing that. But we’ll see. We don’t really know what Vanguard is planning in this. They just brought in the new hire. I think we need to give her some time and let her figure out what she’s exactly going to do there. So it’ll be exciting to see.

How Vanguard Wants to Attract Newer Investors and Meet the Needs of Retirees in Drawdown Mode

Dziubinski: Now, we have seen some interviews with Ramji, as you noted, and he said in many of these interviews over and over again that he wants to grow the firm to be relevant to newer investors and to meet the needs of retirees in drawdown mode. What do you think from a practical standpoint that might mean?

Sotiroff: It’s an interesting question because you’re at two competing ends of the spectrum. It’s a very different set of goals that you’re trying to achieve here. But I think with the younger crowd, it’s relevance. You just think about what we’ve been through with the last couple of years with all the meme stocks and cryptocurrencies and whatnot, and it’s been this big speculative bubble after bubble. Some of it might just be education, teaching people, “Hey, that isn’t the way you really invest money. It’s really boring, and you don’t actually have to be that involved in it, which is actually nice. You don’t have to spend a lot of time doing this if you don’t want to.”

So I think along the lines, when I think of younger people, the stuff that’s really resonated with them, it’s the Robin Hood type stuff. It’s having more of that online digital experience that really works really well. So I think of things like Vanguard’s technology journey has been on. They’ve had some fits and starts with the app and the online interface and stuff like that, but it seems like they’ve improved some of that. So maybe there’s some things around the edges that they have to maybe fine-tune a little bit to resonate a little bit more with younger investors.

On the retiree and income side, Vanguard tried some solutions in the past. They had a managed payout fund for a number of years. I think there was some bad timing there around the GFC. That’s just something that’s really hard to do on its own, even under the right conditions. So that didn’t work out too well. I think some of this might actually be handled with the advice business. You think about it. I think if you’ve saved enough money, I think a big problem is just, Christine has commented on this before. It’s like, how do I sell this off and get comfortable with selling stuff and then actually taking out money and enjoying it? And I think if you have an advisor who is experienced in that, who knows how to do that, and can give you a repeatable paycheck over time by selling off your appreciated assets, I think that could really, really help.

There’s been some innovation with annuities and 401(k) plans. I was talking to Jason Kephart about this the other day. Jury’s still kind of out. I think the term he used is retirement income is the “holy grail” of this industry. Everybody’s trying to figure it out. But I think we’re in agreement that, at a certain point, this is off the asset managers, and I think a lot of the onus comes on to the individual investor and maybe their advisor to sort out what to do there. The one thing I would say, I would really use some caution around some of the mass-marketed solutions that are out there right now. So covered-call ETFs … When people want income, I think they want stable income and they leave the stable part out, but that’s really what they want. A lot of this covered-call, it’s not very … The income coming off of those things is not very stable. So I would use some caution around that. But we’re going to see if Vanguard does come out with anything in this area. But so far it’s been pretty quiet.

What Look for in Vanguard’s Virtual Shareholder Meeting

Dziubinski: Vanguard is holding a virtual shareholder meeting in late February where fundholders are going to vote on the board of trustees for the funds. Anything standing out here to you, Dan?

Sotiroff: It’s not too exciting, I guess I would say. This is governance in action. It’s the most boring side of this business you could possibly have, but it’s important to at least take note of. So really what I wanted to do is just sort of clarify a few things here. Anyone that owns a Vanguard Mutual Fund or ETF should have gotten a notification. I got mine through email in December, so that’s probably how most people are going to receive it. If you’re still signed up for the old snail mail, you might get it in your mailbox. But basically there’s a virtual shareholders meeting that’s being held on Feb. 26, like you said, to elect Vanguard’s board of trustees.

This is a formality that they’re required to go through. What’s important here is that these are the people that are actually responsible for managing and overseeing your funds. The buck stops with them sort of thing. So you want to make sure you’ve got some qualified people there. You actually have a couple options. You can vote by phone, by mail, or online before the meeting, so you don’t actually have to attend. Or if you’re really ambitious, you can attend virtually, and I believe you can vote, don’t quote, in person. I don’t know what that looks like, but again, this is largely a formality, so you do not have a list of candidates that you’re going to go through and you’re going to pick, right? This does not work like a presidential or congressional election like we just had here in November. Basically, you’re just approving the slate of candidates that Vanguard’s trustees are putting forward.

What does that look like? So you’ve got two board members that are actually retiring because they’ve sort of reached that mandatory retirement age. So Joe Loughrey and Emerson Fullwood, they’re both around 75, 76, and that’s where Vanguard says, “We need to move on, we need to bring some other people in.” So they are off the ballot, and they’re just going to age out and retire. To replace them, they’re bringing in two women. Rebecca Patterson is the recent chief investment strategist at Bridgewater Associates, and then Barbara Venneman recently retired as the global head of Deloitte Digital. I want to make sure I get that right. It’s a little bit of a tongue twister. So more on the consulting side, but also very much in the weeds on the technology-adoption type side of things. So they look very qualified. I’m not expecting too much surprises there. The other guy, Salim obviously, is on the ballot. He’s the new CEO, so he’s going to be voted in. The remaining 10 nominations, it’s just the current people that are there.

So what you’re going to get is a 13-person board when it’s all said and done, 10 of the 13 members are sort of current board members as it is today. So really not a lot is going to be changing there, I guess. Which again, good, you want stability, right? You don’t want to see a lot of turnover in your board.

What We’re Looking for From Vanguard in 2025

Dziubinski: And then lastly, you and some members of manager research, you typically go do your due diligence visit at Vanguard every year. I know you’re going in the next couple of months. What are some of the questions that you and the team have when you get there for management?

Sotiroff: The way I would describe it, the big thing we’re looking for is just to get more tiles to put in the Vanguard mosaic. What is the leadership prioritizing? What are they investing in as far as the business goes? Where are they putting the money to work? That type of thing. What problems are they trying to solve? We talked about some of those things like retirement income and appealing to younger investors. So hopefully we get a little bit better idea on those types of things. I think the big thing is going to be the advice and wealth business. We knew that was a big priority for Vanguard. It has been for a while. It seemed like they’re getting really serious about it. I don’t know how much they’re going to share, because Joanne is only going to be in the saddle for about three to four months at that point. So I think she’s probably still going to be figuring some things out. So I think that’s fair, but hopefully we get a little bit better picture of what they’re planning there, and then anything else they’ve got that they’re expecting in the next two years at Vanguard. So I think all in all, they’re in great shape. It’s just going to be meeting all the new executives and seeing what they got planned.

Dziubinski: Well, when you get off that plane, we want to tape a video with you.

Sotiroff: Fair enough.

Dziubinski: As soon as you land to hear about your trip at Vanguard.

Sotiroff: I’d be happy to.

Dziubinski: This was a terrific conversation. Thank you so much for your in-depth, thoughtful replies today. We appreciate it.

Sotiroff: No problem. Anytime.

Watch 3 Great International ETFs for 2025 and Beyond for more from Daniel Sotiroff.