Vanguard’s Crypto ETF Flip Is Part of a Bigger Shift

Vanguard has launched 15 ETFs this year.

“That's Vanguard's busiest year for new products — mutual funds and ETFs — since 2010,” and that total doesn’t include the 10 target-maturity ETFs the company plans to launch as a bond ladder strategy in early 2026, The Independent Vanguard Adviser editor Jeff DeMaso told me in an email Wednesday.

Nor does it take into account the newly announced annuity option for employer-sponsored retirement plans, to be put into place in 2026.

The giant asset manager, one of the brokerage industry's highest profile crypto holdouts, implemented its new policy effective Tuesday, allowing clients to invest in third-party funds holding select cryptocurrencies.

The hiring of Ramji, who had spearheaded BlackRock’s bitcoin ETF filing, as Vanguard’s first outsider CEO last year fueled speculation that the Malvern, Pennsylvania-based company’s cryptocurrency ban would be lifted.

Vanguard sparked outrage among crypto fans in early 2024 when the Securities and Exchange Commission first approved spot bitcoin ETFs and the firm refused to allow them on its platform. Nearly two years later, crypto has gained traction and broader industry acceptance.

“While Vanguard has no plans to launch its own crypto products, we serve millions of investors that have diverse needs and risk profiles, and we aim to provide a brokerage trading platform that gives our brokerage clients the ability to invest in products they choose,” a spokesperson said in an email Tuesday.

“Cryptocurrency ETFs and mutual funds have been tested through periods of market volatility, performing as designed while maintaining liquidity; the administrative processes to service these types of funds have matured; and investor preferences continue to evolve,” the spokesperson said.

Vanguard watchers also cited strong demand for crypto.

“I think it's kind of Vanguard bowing to the inevitable,” ETF.com President Dave Nadig told me in an email. “It's very difficult for them to say with a straight face that ‘bitcoin is bad’ when it's being stockpiled by the federal government and COIN (the cryptocurrency exchange Coinbase Global) is in the S&P 500.

“It's hardly complete capitulation ... but it's definitely sliding in that direction,” he said.

Roxanna Islam, head of sector and industry research at TMX VettaFi, noted the implications for loyal Vanguard clients.

“Vanguard was one of the last large players restricting access to crypto ETFs, so this is a significant milestone for mainstream retail crypto adoption. This will open access to a segment of retail investors who are interested in crypto but haven't yet invested because they wanted to stay on Vanguard's platform,” she told me in an email.

“I think Vanguard is trying to meet clients where they are. There's probably more value in guiding clients in the right way to allocate to those ETFs than a wholesale ban,” Daniel Sotiroff, senior manager research analyst for Morningstar, told me in an email Tuesday.

“For context, these weren't the only ETFs and funds that were banned from its brokerage,” he said. “To my knowledge, it still has a ban on levered and inverse ETFs. That hasn't changed and there's no indication that it's going to.”

While the crypto news may have grabbed more headlines, it wasn’t the only ETF-related change Vanguard has made recently.
The firm, for example, also is introducing bond ladder ETFs, filing last month with the SEC to launch 10 target-maturity corporate bond funds, The Independent Vanguard Adviser reported.

iShares and Invesco lead that market, but Vanguard is beating them on ETF expenses, IVA editor Jeff DeMaso wrote. He said the index-based bond ladder ETFs are expected to launch in February.

“Each will hold a basket of investment-grade corporate bonds scheduled to mature in the target year. On December 15 of that year, the fund will close and return the proceeds to shareholders. In the meantime, investors will collect monthly interest payments,” he explained. “In short, they’re like buying an individual bond — but with built-in diversification and convenience.”

Vanguard’s new products and policies don’t appear to be random developments.

DeMaso wrote in a briefing Wednesday that the new retirement-plan annuity product the company is developing for 2026 is “another sign that Salim Ramji’s Vanguard is willing to push into new areas.”

Among other points, he noted, Ramji “wasn’t exaggerating” when he said he planned to strengthen Vanguard’s bond ETF offerings.
The firm has rolled out 11 new fixed income ETFs this year.

“So far, Salim Ramji's ‘mark’ on Vanguard has been to expand the lineup,” DeMaso told me, noting Vanguard has 103 ETFs. “That's a lot but iShares — Ramji's former shop — has 469. So, I think Ramji came in and said, ‘We can be doing more, a lot more,’ In particular, the firm has focused on leveraging its in-house fixed income team, which doesn't often get its due. Eleven of the 15 ETFs this year are bond ETFs.

“Ramji and company are not anywhere close to done,” DeMaso said. “I've got to think that more active ETFs are on the horizon.”

VettaFi’s Islam noted that nearly half the 15 ETFs that Vanguard has initiated this year are active strategies. That’s also a shift for an investment giant that made its mark as a low-cost, passive index fund icon.

“Under Salim Ramji, Vanguard has been subtly shifting course to lean into investor demand for active ETFs, while keeping fees low and its lineup core-focused,” Islam told me. “Vanguard's recent decision to allow crypto ETFs on its platform also proves it is responding to ETF investor sentiment, even as it maintains its stance of not launching its own crypto ETFs.”