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By Nesil Staney
Vanguard Emerging Markets Select Stock Fund, part of the $10.4-trillion Vanguard group, the second-biggest fund house globally, has hit pay dirt with its aggressive contra bets in Indian stocks in the past few months.
Since March-end, its portfolio size has gone up 44% to Rs 61,880 crore from Rs 43,047 crore, according to data from market tracking website Trendlyne.
The sharp rise is due to fresh investments and rise in the share prices of some of its holdings, said industry players. The Sensex and Nifty have gone up by 2.63% in the same period, while broader indices BSE Midcap and BSE Smallcap have gained only up to 1.40%.
Vanguard is among the four biggest foreign portfolio investors in India, trailing the sovereign wealth funds of Singapore and Norway and the Capital Group. They are followed by Goldman Sachs, JP Morgan Asset Management and GQG Partners.
Vanguard’s stand-out performance is in sharp contrast to some other big names. During the same period, Government of Singapore’s India portfolio fell by -0.3% to Rs 2.3 lakh crore. Goldman Sachs took a 5.9% hit on its 76-stock India portfolio since March 25 to Rs 11,235 crore. Among others, Singapore-based Nalanda India Fund’s India portfolio fell 5.8% to Rs 29,264 crore. Portfolio data for Capital Group, JP Morgan funds and Norges Bank’s sovereign wealth fund, also known as Norway Oil Fund was unavailable.
Since April 1, FPIs have turned net buyers of Rs 14,591 crore ($1.7 billion) in the Indian market.
While the data on its purchases since March are not available, the fund house made fresh bulk buys of more than 1% in ten stocks in the January-March quarter. Its biggest bet was in ICICI Bank at Rs 10,708 crore (1.3%), followed by Mahindra and Mahindra at Rs 3,798 crore (1%) and Rs 2,459 crore for 1.1% stake in Eternal (Zomato). Among mid and small-cap stocks, it picked 1% stake in Cipla for Rs 1,205 crore and Rs 468 crore for a 1% stake in APL Apollo Tubes and Reliance Power in which it bought a 1% stake for Rs 157.3 crore.
It also increased the portfolio holdings in Hindustan Construction Company, Va Tech Wabag, Samman Capital and Zee Entertainment. Among its largest holdings in the portfolio are HDFC Bank, Infosys and Axis Bank. It owns 1.2% of HDFC Bank worth Rs 15,431 crore, 2.6% stake in Infosys worth Rs 14,260 crore and 1.1% of Axis Bank worth Rs 3,814 crore.
Its India assets under management (AUM) was just Rs 5,433 crore in end-December 2015 which rose to Rs 43,047 crore by 2025 March-end. What is interesting is that the fund house’s AUM took a 19% hit between December 2024 and March 2025 when India’s broader markets corrected sharply. That is, the Sensex was marginally down 0.93% while BSE Midcap and Smallcap Index declined 10.58% and 15.48%, respectively between December 2024 to March 2025.
An email query sent to the fund house was unanswered.
Vanguard, founded in 1975 by John Bogle, is the world’s second-biggest fund house after Blackrock with assets of $10.4 trillion as of January 2025. It is known for its exchange traded funds (ETFs), mutual fund schemes and brokerage services. In mid 2024, it appointed Salim Ramji, a BlackRock veteran as its Chief Executive (CEO).
The fund house offers two classes of funds: investor shares and admiral shares. The latter has lower expense ratios and higher investment thresholds. The Vanguard FTSE Emerging Markets (EM) Fund is a passive ETF is a diversified Emerging Markets fund with an expense ratio of 0.07%. Its current net asset value is $46. The fund’s largest exposure is in China, Brazil, Taiwan and South Africa, as per the index’s portfolio. The fund’s net portfolio size is $112 billion as of March 2025.
On the other hand, the Vanguard Emerging Markets Select Stock Fund is an actively managed international fund. It seeks a minimum investment of $3,000 at unit value of 22.7. Its expense ratio is 0.75% and year to date return is 7.51%. The latter fund is managed by Boston based Wellington Management Company, Scotland based Bailllie Gifford Overseas and New York-based Pzena Investment Management.
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