Manager Leaves Vanguard US Growth Fund

Dec. 19, 2003 -- Stock picker Christopher Toub has left the team of portfolio managers at Alliance Cap Mgmt Holding L.P. (AC) who oversee the $7.2 billion Vanguard US Growth (VWUSX).

Vanguard said Toub stepped down because of his increased responsibilities at Alliance, where he has taken over its global growth team, which focuses on domestic and foreign stocks. His leaving the fund is not related to improper mutual fund trading at Alliance, a Vanguard spokeswoman said.

Alliance yesterday agreed to cut its mutual fund management fees by 20% and to pay a $250 million fine as part of a settlement with federal and New York State regulators over improper trading in its funds.

Two other Alliance money managers, John Blundin and Alan Levi, who had run Vanguard US Growth Fund with Toub since July 2001, continue to oversee the fund. Vanguard retained Alliance to replace Lincoln Capital Management in an effort to improve the fund's performance.

Vanguard US Growth returned 22.1% through November this year, while its large-cap growth fund peers gained 24.6% and the S&P 500-stock index rose 22.3%. The Vanguard fund lost 19.5% on average for the three years ended last month, compared with losses of 10.6% by similar funds and 5.5% by the index.

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