Vanguard says that a new advisory firm will become a manager of its $11.9 billion Vanguard Explorer Fund (VEXPX): ClearBridge Investments. At the same time, Granahan Investment Management and Kalmar Investment Advisers will no longer be advisors to the fund.

“The investment professionals in Vanguard’s Portfolio Review Department continuously scour the globe for top-tier talent to enrich our active management capabilities,” said Vanguard CEO Bill McNabb, in a statement. “The addition of ClearBridge’s experience and expertise, particularly in the small and mid-cap market segments, brings further depth to the fund and to our diverse active management roster.”

According to Vanguard, the expense ratios for Explorer Fund’s Investor Shares and Admiral Shares are “not expected to increase” as a result of these changes, and the investment objective and core investment strategies for the fund will “remain the same.”

After these shifts, the Explorer Fund will allocate assets among five advisors as follows: Wellington Management Co., 34%; Vanguard Quantitative Equity Group, 18%; ClearBridge, 15%; Arrowpoint Asset Management, 15%; and Stephens Investment Management Group, 14%.

The remaining 4% of assets will be held in cash investments.

ClearBridge, a global investment management firm, was founded in 1962. It has a seven-member small/mid-cap team which focuses on identifying companies that are “category leaders or have [the] potential to become category leaders, and display capital allocation discipline aimed at fueling long-term, sustainable growth,” Vanguard says.

The ClearBridge team includes Jeffrey Russell, CFA; Derek Deutsch, CFA; Brian Angerame; and Aram Green, who have a combined 90 years of investment management experience.

The Explorer Fund has a three-star rating from Morningstar and a 0.45% expense ratio. According to the research firm, the fund is up 6.5% so far this year, beating its small-cap growth category average by 0.68%. Its 10-year average yearly improvement is 7.39%, 0.04% below the category average. 

The fund’s largest holdings include Cadence Design and the Vanguard Small-Cap ETF (VB).

— Check out Putnam Boosts Its Small-Cap Equity Team on ThinkAdvisor.