The changing outlook shows how pessimistic the bond market has become as hopes for reflation have faded and the Trump administration fails to deliver on its fiscal-stimulus promises.
Vanguard's move was seen by analysts as a potential game-changer for the U.S. actively managed funds industry that would increase competition and push down costs.
ETF buyers are building their holdings, joining hedge funds that have boosted their net-long position in bullion futures by almost nine-fold since early July.