Vanguard Group’s board of directors has elected F. William McNabb III as president and director of Vanguard effective March 1. McNabb, 50, is set to succeed Jack Brennan as chief executive officer within a year.

“Working in concert with our experienced senior management team and board, Bill is the ideal person to lead Vanguard into the future,” Brennan says. “I am thrilled that our directors have named him as my successor.”

Brennan, 53, has been Vanguard’s president since 1989 and CEO since 1996; he will remain chairman of the board, the fund company says.

Jack Brennan “has been a driving force in all our efforts to advance the interests of funds and their shareholders and to sustain the highest ethical and fiduciary standards in our business,” shares Investment Company Institute President & CEO Paul Schott Stevens.

McNabb joined Vanguard in 1986, and as a managing director he oversees Vanguard’s institutional and international businesses with some $700 billion in assets under management.

Vanguard, based in Valley Forge, Pa., manages $1.25 trillion in U.S. mutual fund assets and offers more than 150 funds to U.S. investors and 50-plus funds in foreign markets.

In the latest estimates from Financial Research Corporation of Boston, Vanguard is leading the industry in terms of estimated net flows in January 2008 with some $8 billion of new flows in January 2008, giving it some $1 trillion in assets, net of proprietary funds of funds.

The Vanguard Total Stock Index fund had some $2.5 billion of net inflows in January, according to FRC, while the Vanguard Institutional Index fund had $1.3 billion of new inflows. The Vanguard Total Bond Fund had some $990 million of inflows and the Vanguard Inflation Protection Fund had $960 million.

Recently, Vanguard changed the management of some funds. M&G Investment Management has been added to the advisory team of the $18.3 billion Vanguard International Growth Fund and the $1.9 billion Vanguard Variable Insurance Fund-International Portfolio. M&G joins advisory firms Schroder Investment Management North America and Baillie Gifford Overseas in managing the funds.

According to Vanguard, M&G utilizes a long-term, bottom-up investment approach that focuses on identifying underappreciated, quality companies that may deliver high returns and that demonstrate potential for growth. Schroder has served as investment advisor for the Vanguard International Growth Fund since its inception in 1981.

“Vanguard has enjoyed a nearly 25-year association with M&G, which has managed Vanguard Precious Metals and Mining Fund since its inception. We’re pleased to broaden this relationship to include two additional Vanguard portfolios,” explains Brennan.

Vanguard Quantitative Equity Group has begun managing the portions of the $975 million Vanguard U.S. Value Fund and the $695 million VVIF-Small Company Growth Portfolio previously managed by Grantham, Mayo, Van Otterloo & Co. (GMO). Vanguard has also assumed primary responsibility for the assets previously managed by GMO for the $10.5 billion Vanguard Explorer Fund.

In replacing GMO, Vanguard’s Quantitative Equity Group joins AXA Rosenberg Investment Management as a co-advisor for Vanguard U.S. Value Fund. Vanguard’s internal equity management team, which now oversees roughly one-third of the fund, employs a quantitative investment approach to select stocks from the Russell 3000 Value Index.

In addition, Vanguard says, Earl E. McEvoy, co-manager of the $13.3 billion Vanguard Wellesley Income Fund and lead manager of the $8.8 billion Vanguard High-Yield Corporate Fund and $5.7 billion Vanguard Long-Term Investment-Grade Fund, will retire on June 30. McEvoy is a senior vice president and partner of Wellington Management Company, which provides investment advisory services to the funds. He joined Wellington in 1978.

Janet Levaux is the managing editor of Research; reach her at jlevaux@researchmag.com.