Vanguard Emerging Markets Select Stock Fund has recently made headlines due to its impressive performance in the Indian stock market. As a major player in the $10.4 trillion Vanguard group, which ranks as the second-largest fund house globally, this fund has seen substantial growth in its portfolio over the last few months. With aggressive investments in Indian equities, it has achieved a remarkable 44% increase in its portfolio size, rising from Rs 43,047 crore to Rs 61,880 crore since the end of March.

Vanguard’s Market Performance

This significant growth can be attributed to both fresh investments and the rising share prices of key holdings. During the same timeframe, the Sensex and Nifty indices rose by 2.63%, while broader indices like BSE Midcap and BSE Smallcap only saw gains of up to 1.40%. This places Vanguard in a strong competitive position among foreign portfolio investors in India, alongside notable players such as sovereign wealth funds from Singapore and Norway.

Contrasting Trends Among Investors

Interestingly, Vanguard’s success starkly contrasts with the performance of other prominent investment firms. For example, the Government of Singapore’s India portfolio saw a slight decline of -0.3%, dropping to Rs 2.3 lakh crore. Similarly, Goldman Sachs experienced a 5.9% hit on its Indian portfolio, which now stands at Rs 11,235 crore. Other investors, like the Singapore-based Nalanda India Fund, reported a 5.8% decrease, with their portfolio now valued at Rs 29,264 crore.

Foreign Portfolio Investment Insights

Since April 1, foreign portfolio investors (FPIs) have turned net buyers in the Indian market, investing around Rs 14,591 crore (approximately $1.7 billion). While specific data on Vanguard’s recent purchases is not disclosed, it is known that the fund made substantial bulk purchases of over 1% in ten different stocks during the January-March period. Its largest investment was in ICICI Bank, valued at Rs 10,708 crore, followed by Mahindra and Mahindra and Eternal (Zomato).

Strategic Stock Selections

In addition to its significant investments in major banks, Vanguard has also increased its stakes in various companies, including:

• Hindustan Construction Company
• Va Tech Wabag
• Samman Capital
• Zee Entertainment

Among its top holdings are HDFC Bank (1.2% stake worth Rs 15,431 crore), Infosys (2.6% stake valued at Rs 14,260 crore), and Axis Bank (1.1% stake worth Rs 3,814 crore).

Historical Context and Future Prospects

The fund’s assets under management (AUM) in India have experienced dramatic growth, climbing from Rs 5,433 crore at the end of December 2015 to Rs 43,047 crore by March 2025. However, it’s worth noting that the AUM suffered a 19% decline during a market correction between December 2024 and March 2025, reflecting the volatility in broader market indices.

Vanguard, established in 1975 by John Bogle, is renowned for its low-cost investment options and is the second-largest fund manager after BlackRock. Under the leadership of Salim Ramji, who took over as CEO in mid-2024, Vanguard continues to innovate and adapt its strategies, offering various funds, including its Vanguard FTSE Emerging Markets Fund.

Investment Offerings

Vanguard provides two categories of funds: investor shares and admiral shares, with the latter offering lower expense ratios. The Vanguard Emerging Markets Select Stock Fund is actively managed, requiring a minimum investment of $3,000 and featuring an expense ratio of 0.75%. This fund is managed by a consortium of investment firms, including Wellington Management Company and Baillie Gifford Overseas.

As Vanguard continues to capitalize on emerging markets and innovative investment strategies, its influence in the Indian stock market is poised to grow, making it an intriguing player to watch in the coming years.