Vanguard's Bond Chief to Retire

March 18, 2003 — Vanguard Group said Ian MacKinnon is retiring as head of its fixed income group, which manages $225 billion in assets.

In connection with MacKinnon’s departure, the company appointed George Sauter, who currently oversees its stock index funds, chief investment officer, a new position in which he is responsible for Vanguard’s in-house stock and fixed-income managers.

Sauter said Vanguard bond fund manager Robert Auwaerter will assume the majority of MacKinnon’s duties, including the oversight of the company’s bond funds. Sauter said Auwaerter will report to him.

In his expanded role, Sauter will oversee nearly $400 billion in assets, or about 70% of Vanguard’s $550 billion in mutual fund assets. Sauter said he does not plan to change the way Vanguard’s stock and bond funds are managed. “We’re very pleased with the development of our fixed-income group,” he said.

Daniel Wiener, editor of The Independent Adviser for Vanguard Investors, a newsletter, said MacKinnon’s departure will have no affect on the way Vanguard’s bond funds are run. That, he said, is because their managers have little leeway to adjust the types of securities they invest in.

“For the most part,” the funds are “very plain vanilla,” Wiener said. As for MacKinnon, Wiener said “he’s had a long and solid career.0″