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December 17, 2018 at 10:52 AM
Vanguard announced plans to merge the $15.1 billion Vanguard Morgan Growth Fund into the $10.2 billion Vanguard U.S. Growth Fund.
Following the merger, which is scheduled to be completed in early 2019, the fund will retain the U.S. Growth Fund name and continue to invest primarily in large-cap stocks of U.S. companies considered to have above-average earnings growth potential and reasonable stock prices in comparison with expected earnings.
Four current advisors of the U.S. Growth Fund will be retained — Wellington Management Company, Jackson Square Partners, Jennison Associates and Baillie Gifford Overseas — and Vanguard Quantitative Equity Group will be added to the advisory team.
Given the similarities in objectives, strategies, portfolios and performance between the funds, Vanguard determined that the merger results in a stronger combination of investment advisors and in greater efficiencies in administration.
Following the merger, the expense ratios for the fund’s Investor and Admiral Shares are expected to be 0.38% and 0.28%, respectively. This is lower than the current expense ratios of the U.S. Growth Fund and equal to those of the Morgan Growth Fund.
Vanguard is also realigning the multi-manager approach teams of three funds.
The $5.4 billion Vanguard Global Equity Fund will be advised by two of the current advisors, Baillie Gifford and Marathon Asset Management LLP. Acadian Asset Management LLC will no longer manage a portion of the fund.
The team for the $4.2 billion Vanguard Mid-Cap Growth Fund will include current advisor RS Investment Management Co., along with two new advisors to the fund: Frontier Capital Management LLC and Wellington.
The $664 million Growth Portfolio of Vanguard Variable Insurance Fund will be managed by two of the current advisors: Jackson Square and Wellington.
The merger and the advisory changes are a result of Vanguard’s ongoing and comprehensive review of its global fund and ETF lineup.
Scaramucci’s Firm and EJF Capital Launch Opportunity Zone REIT
SkyBridge Capital, a global alternative investment firm, and EJF Capital, a hedge fund and private equity fund manager, launched the SkyBridge-EJF Opportunity Zone REIT (SOZ REIT).
The new REIT has a mandate to invest in U.S. Treasury-certified Opportunity Zones, which are low-income communities where recycled capital gains can receive favorable tax treatment.
According to Anthony Scaramucci, founder and co-managing partner of SkyBridge, the SkyBridge-EJF Opportunity Zone REIT was launched in response to demand from investors, who “correctly see the OZ program as a chance to potentially generate attractive returns while having a positive societal impact.”
According to the Real Deal, a New York real estate news site, the Opportunity Zones program, created as part of last year’s tax overhaul plan, offers tax deferrals and benefits to investors who park their money in assets located within designated low-income neighborhoods. There are more than 8,700 designated zones nationwide. Despite the interest the program has already stirred among developers and investors, final regulations have yet to be released.
To be eligible for the Opportunity Zones program, census tracts must have a 20% poverty rate or median family income of less than 80% of the surrounding area. Governors then chose 25% of eligible tracts in their state to be certified by the Treasury Department as Opportunity Zones.
