Will Vanguard expand its product line? Only in a strategic way, Papariello says. “We’re always keeping an eye out for opportunities. We’ll only bring products to market with enduring investment value.” In other words, don’t expect a niche fund anytime soon.
Active management in ETF form may not be in the cards for Vanguard, either, because most of their active managers wouldn’t want to disclose their holdings on a daily basis. Papariello also feels that actively managed ETFs may be challenged industry-wide because it takes so long to establish a track record that most investors will trust, which she says is generally three years. Vanguard will, of course, stick with its actively managed mutual funds. “We don’t have a problem with active management in general,” she says.
Vanguard is sticking to what it does best, and by doing so, the provider should continue to win over new customers and make waves in the ETF industry.
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