Vanguard Swaps Out Subadvisor on $9.8B Fund

Toronto-based Sprucegrove Investment Management has become an external advisor for Vanguard, adding to its active management expertise, Vanguard said Friday.

The boutique asset manager, which has $13.8 billion in assets under management, joins Lazard Asset Management and ARGA Investment Management in overseeing the $9.8 billion Vanguard International Value Fund (VTRIX, with a 0.37% net expense ratio).

Sprucegrove is managing the 35% of the fund previously overseen by Edinburgh Partners, Vanguard said. Arjun Kumar and Shirley Woo are co-managing Sprucegrove’s portion of the fund.

Vanguard didn’t specify when and why Edinburgh stopped being a manager of the fund and did not immediately respond to a request for comment.

The Vanguard International Value Fund invests in companies from developed and emerging markets globally that its advisors view as temporarily undervalued by the markets, the company noted. The fund invests in large-, mid- and small-capitalization companies and diversifies its assets in countries across developed and emerging markets, it added.

As a result of Vanguard’s performance-based fee arrangements, the fund’s expense ratio is expected to increase 1 basis point to 0.38%, “well below the average asset-weighted expense ratio of 0.98% for foreign large value funds,” it said.

Employee-owned Sprucegrove, founded in 1993, maintains an investment philosophy focused on constructing portfolios of quality companies at attractive valuations, Vanguard said in its announcement.