The Vanguard Group says it has been in talks with Charles Schwab Investment Management about the re-organization of the Laudus Rosenberg U.S. Large/Mid Capitalization Long/Short Equity Fund (RMNIX) into a new Vanguard fund. The $21 million open-end fund is sub-advised by AXA Rosenberg Investment Management LLC.
The fund’s shareholders will receive further details about the proposal in October, with a special meeting slated for mid-November. As part of the proposal, Vanguard has filed a registration statement with regulators for the Vanguard Market Neutral Fund. The new no-load fund would seek to provide long-term capital appreciation while limiting exposure to general stock market risk by using a long/short market-neutral strategy.
AXA Rosenberg, based in Orinda, Calif., would continue to serve as an investment advisor of the reorganized fund, while the Vanguard Quantitative Equity Group would also manage a portion of the fund.
“We view the adoption of the fund as an opportunity to expand our relationship with a respected advisor and bring a new investment strategy to our institutional clients through a relatively low-cost fund with an established track record,” says Vanguard CEO Jack Brennan.
Vanguard added AXA Rosenberg to the advisory teams of the $12 billion Vanguard Explorer Fund (VEXPX) and the $1.4 billion Vanguard U.S. Value Fund (VUVLX) in June. AXA Rosenberg manages 12 percent of the Explorer Fund and 50 percent of the U.S. Value Fund, according to the fund company.
Vanguard expects the new fund will require minimum initial investments of $250,000 for investor shares and $5 million for institutional shares.
“We have considerably expanded our product offerings and advisory services to institutional clients over the past several years,” explains Brennan, who noted that Vanguard’s institutional offerings now include structured equity funds and target retirement commingled trusts. Vanguard also plans to introduce an extended-duration U.S. Treasury index fund in the near future.
Vanguard Group also says that W. Michael Reckmeyer, III, CFA, vice president, Wellington Management Company, has been named to the portfolio management teams of the Vanguard Wellesley Income Fund (VWINX) and Vanguard Equity Income Fund (VEIPX). Reckmeyer, 48, will serve with John R. Ryan, CFA, senior vice president and partner at Wellington Management, who has managed the stock portion of the $13.1 billion Wellesley Income Fund since 1986 and co-managed the $5.5 billion Equity Income Fund since 2000 and the $626 million Vanguard Variable Annuity-Equity Income Portfolio since 2003.
Reckmeyer is set to take on the lead responsibility for these three funds in June 2008, at which time Ryan, 58, will relocate to Wellington Management’s London office to help develop the firm’s portfolio management and research functions, as well as to continue to manage a global investment strategy.
Wellington Management provides advisory services to 16 Vanguard mutual funds and annuity portfolios. The firm has more than $550 billion in assets under management.
Janet Levaux is the managing editor of Research; reach her at [email protected]