Dec. 11, 2003 — Vanguard Group today added Hotchkis & Wiley Capital Management LLC to the team of stock pickers who run the $25 billion Vanguard Windsor II/Inv (VWNFX).
Hotchkis & Wiley will be responsible for about 5% of the fund’s assets, Vanguard said. The Los Angeles-based money management firm, which oversees $7 billion in assets, primarily for institutions, focuses on undervalued stocks.
Hotchkis & Wiley’s portion of the fund will be managed by George H. Davis Jr., the company’s chief executive officer and the co-manager of the Hotchkis & Wiley Large Cap Value Fund/A (HWLAX); and Sheldon Lieberman, a principal of the firm who helps oversee the Hotchkis & Wiley All Cap Value Fund (HWAAX).
Hotchkis & Wiley’s retention was aimed at adding “another level of diversification” to the fund and was not related to the fund’s size or performance, a Vanguard spokeswoman said.
Vanguard Windsor II returned 22.3% this year through November, compared to gains of 21.8% by its peer large-cap value funds, and 22.3% by the Standard & Poor’s 500 index. The Vanguard fund returned 2.1% on average for the five years ended last month, while similar funds gained 2.4% and the index lost 0.5%.
Vanguard does not expect the new manager’s hiring to change expense ratios of the fund’s shares, which stand at 0.43% for investor shares and 0.32% for Admiral shares.
The fund’s management team includes Vanguard’s Quantitative Equity group, and three other outside managers: Barrow, Hanley, Mewhinney and Strauss; Equinox Capital Management; and Tukman Capital Management.