Vanguard Buys Custom Portfolio Maker in Move Beyond Indexing (1)

Vanguard Group agreed to buy a company that helps financial advisers build custom portfolios, branching further beyond its roots in traditional index-based investing -- and marking its first-ever acquisition.

The firm, called Just Invest, oversees about $1 billion in assets managed with a “direct indexing” strategy, Vanguard said in a statement Tuesday. Direct indexing involves tailoring investments for a variety of customer preferences such as minimizing taxes. The approach is more customized than passively tracking the returns of an index, something that Vanguard has championed in its more than four-decade history. Terms of the deal weren’t disclosed.

Asset managers have ...