Vanguard, Index Investing’s High Priest, Makes Big Bet on Active

For half a century, Vanguard has been the high priest of passive investing. Its low-cost index funds have reshaped finance, humbled stockpickers, and made the Pennsylvania-based firm an $11.6 trillion behemoth.

But now, with billions of dollars flowing in the other direction — into active exchange-traded funds, specifically — Vanguard is in an unusual position: compete, or risk becoming an afterthought in virtually the only part of the ETF industry it doesn’t dominate.