Vanguard, the giant mutual fund company, is adding two international balanced funds to its actively managed lineup, both managed by longtime Vanguard subadvisor Wellington Management, with an expected launch in mid-October..
The Global Wellington Fund is a diversified portfolio investing approximately 65% of its assets in equities and 35% in fixed income securities in pursuit of long-term capital appreciation and moderate current income.
The Global Wellesley Income Fund reverses those allocations to 65% bonds, 35% stocks in order to achieve high and sustainable current income along with moderate long-term capital appreciation.
“The Global Wellington and Global Wellesley Income Funds will offer investors the convenience of a turnkey investment program in a single fund, providing broad diversification among global stocks and bonds,” said Vanguard CEO Bill McNabb.
“The funds reflect a thoughtfully constructed mix of domestic and international securities and represent Vanguard’s fundamental, time-tested investment principles — balance, diversification, discipline, low cost, and a long-term orientation.”
The Global Wellington Fund will charge an estimated expense ratio of 0.45% for Investor shares, with a minimum initial investment of $3,000, and 0.35% for Admiral shares, which requires an initial minimum of $50,000.
The Global Wellesley Income Fund will have an estimated expense ratio of 0.42% for Investor shares and $0.32 for Admiral shares. Minimums will be the same as the Global Wellington Fund.
The portfolio managers for the fixed income allocations of both funds are John Keogh, Michael Stack and Loren Moran. Nataliya Kofman will manage the equity portion of the Global Wellington Fund and Ian Link will serve as the portfolio manager for the equity portion of the Global Wellesley Income Fund.
(Related: Not All Active Managers Are Poor Performers)
The two funds are additions to the $1 trillion in actively managed funds that Vanguard already manages. Though renowned for its low-cost index funds, actively managed funds comprise roughly 25% of the company’s total assets under management. They account for 102, or 41%, of the company’s global funds.
Wellington Management is a prominent manager of Vanguard’s actively managed funds, and the Vanguard Wellington Fund was the firm’s first fund. Introduced in 1929, it’s the nation’s oldest balanced fund and the industry’s largest, with more than $100 billion in AUM. Vanguard currently manages $4.4 trillion in global assets.
— Related on ThinkAdvisor:
- Vanguard Strategy Exec to Retire
- Vanguard CEO McNabb to Step Down
- Vanguard Announces Fifth Round of Fee Cuts Since December
- How ETFs and Indexing Took Over Active Management