Why Vanguard’s CEO Cautions That Private Markets Could Feed the Industry’s Complexity

On this episode of The Long View, Vanguard CEO Salim Ramji joined Morningstar’s Christine Benz and Dan Lefkovitz live from the Morningstar Investment Conference 2025. Ramji, who joined Vanguard about a year ago, breaks down the transition from BlackRock, how Vanguard is using artificial intelligence to help its client-support challenges, and what is on the horizon for Vanguard when it comes to private markets, cryptocurrency exchange-traded funds, active fixed-income, and more.

Here are a few excerpts from Ramji‘s conversation with Morningstar.

Why Vanguard’s CEO Cautions That Private Markets Could Feed the Industry’s Complexity

Christine Benz: I wanted to get your perspective on whether the balance has shifted a little bit too much in the direction of complexity in investor portfolios. There’s been a big push to get smaller investors in private investments, whether private equity or credit. I’d like your take on complexity writ large, but also specifically the private market’s exposure and how you see that fitting into investor portfolios, if you do.

Salim Ramji: As a general matter, complexity for decades has really been a mask for charging higher fees. And I think part of what Vanguard’s been about has not just been about low fees, but simplicity. And I think that’s going to be a really important feature of Vanguard going forward as well around being able to keep things simple, to help clients invest for the first time, to help clients continue to invest in a good way for the long term.

There will be some segments of clients, perhaps in the very-high-net-worth area, for whom some exposure to private markets could make sense. But for us, it still has to adhere to the Vanguard principles. It’s got to be good quality. It’s got to be at a low fee. And it’s got to be done in a way that is intelligible and simpler, if you will, than the client could otherwise get. And we’re starting to experiment: Could we provide access to private market investors to certain segments of clients that fit the profile? And we’ll see how we get in terms of that journey.

What we do know is that for the right clients, with the right product, at the right fee, it can be additive to the overall risk/return profile of their portfolio. But there’s a lot of work to make sure that those conditions are met. And so that’s an area that I’d say we’re experimenting in and learning about.

But across the industry, I think it’s going to be some time, like a long time, longer than most people expect, before this really goes mainstream in a big way. And I think a lot of it is not just the complexity and the fees, but the complexity of consuming the product. Mutual funds are really easy to consume. Now, we’ve been at it for like 101 years. And the ETF is pretty easy to consume; we’re now in our fourth decade of ETFs. And so some of the things that people look at as democratizing investing, like mutual funds and ETFs, have been decades in the making. And so, any new features, even good features, often take longer than people expect. But that’s why we just wanted to start kind of understanding it because, done well, I think it can be additive. But there’s a lot of work and thinking and research to satisfy the “done well” in the Vanguard way.

Why Cash Flow Is King for Vanguard When It Comes to Cryptocurrency ETFs

Dan Lefkovitz: Crypto is an area where, before your arrival, Vanguard kind of drew a line in the sand and refused to add cryptocurrency ETFs to the platform. I’m curious what the decision-making framework is like and how you go about approaching a new sort of asset class or asset.

Ramji: It was pretty straightforward. Greg Davis, our CIO, and I had talked about it kind of early in my arrival. And at Vanguard, we like investments that deliver cash flow or have the prospect of delivering cash flow. That could be cash, could be bonds, could be equities, could, over time, if the circumstances are right, be private markets. We don’t like things that don’t. We don’t have a gold ETF. We don’t have a silver ETF. And so it’s a logical extension as to why we don’t have ETFs in other things that don’t either deliver cash flow or have the prospect of delivering cash flow. And that’s OK. The market’s well-served. Investors can decide. But we also want to be clear about what our own investing philosophy and investing thinking are. And we’re OK not being everything to everybody. And there are certain things that don’t fit our investment philosophy, or we don’t think we have particular scale or expertise in. And so I’d put some of those types of ETFs in that bucket.