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Portfolio > Asset Managers

Vanguard Adds Managers to Two Funds

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April 19, 2004 — Vanguard Group on Monday added portfolio managers to help oversee the Vanguard US Growth Fund (VWUSX) and the Vanguard International Value Fund (VTRIX), which have combined assets of about $9 billion.

A team from William Blair & Co. LLC joined the $7.3 billion US Growth Fund and will handle 25%-30% of its assets. The fund’s other manager, Alliance Cap Mgmt Holding L.P. (AC), will be responsible for the remainder.

A team from Alliance’s Sanford C. Bernstein & Co. LLC subsidiary was added to the $1.9 billion International Value Fund, joining Hansberger Global Investors Inc. Vanguard said it will shift 25%-30% of the fund’s assets to the new managers over the next “several” months by redirecting new investments and reallocating current assets. Hansberger, a value-oriented firm, has served as the fund’s outside manager since 2000.

The moves are aimed at improving the funds’ performance by combining teams with “complementary” investment styles, a Vanguard spokeswoman said. Bernstein is a value-oriented shop, while Blair seeks growing companies.

Blair principals James L. Barber, John F. Jostrand and Robert Truderung joined the U.S. Growth Fund. The trio also oversees Blair’s $6 million Large Cap Growth Fund. Jostrand also has run the $276 million William Blair Mutual Fds:Growth Fund/A (BGFAX) since 2001.

Henry S. D’Auria and Kevin F. Simms, Bernstein’s chief investment officers for international value equities, will manage that firm’s portion of the International Value fund.

Vanguard US Growth returned 1.9% this year through March, versus 1.4% for its large-cap growth fund peers. For the five years ended last month, the Vanguard fund lost 11.9%, on average, versus 3.6% for similar funds. The portfolio is ranked 2 Stars by Standard & Poor’s.

Vanguard International Value returned 4.2% in the first quarter, versus 5% by the average international equity fund. For the five years ended in March, the fund returned an average annualized 4.1%, versus 2.5% for its peers. The fund is ranked 4 Stars by Standard & Poor’s.


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