Vanguard Shakes Up International Explorer Fund
Vanguard determined changes to the fund’s advisory structure would best serve shareholders.
Vanguard on Tuesday announced changes to the investment advisory arrangements and the benchmark for its $1.68 billion Vanguard International Explorer Fund.
Following a transition period, investment advisors Wellington Management Co. LLP, Schroder Investment Management North America Inc. and Baillie Gifford Overseas Ltd. will now manage 40%, 40% and 20% of the fund’s assets, respectively, effective Tuesday, the mutual fund giant said.
TimesSquare Capital Management LLC will no longer advise the fund.
Under the previous arrangement, Wellington managed 30%, Schroders 40%, TimesSquare 20% and Baillie Gifford 10%, a Vanguard spokesman said.
Vanguard said it maintains a dedicated team of investment experts focused on evaluating and overseeing its investment managers.
As part of the team’s ongoing, multifaceted review process that emphasizes qualitative and quantitative attributes leading to long-term results, Vanguard said, it determined that changes to the fund’s advisory structure would best serve shareholders.
Vanguard has long employed multiple managers on certain investment strategies, as the combination of high-caliber investment management teams with differentiated but complementary strategies can reduce portfolio volatility and provide the potential for long-term outperformance, the company added.
The fund also has replaced the benchmark S&P EPAC SmallCap Index with the MSCI EAFE Small Cap Index. The new benchmark should improve investors’ ability to assess performance relative to peer funds, according to Vanguard, which said it adheres to a thorough process to evaluate and select fund benchmarks.
The suitability of each fund’s benchmark is based on index construction methodology, market coverage, classification criteria, rebalancing schedule, cost and other standards, Vanguard said. The funds’ investment objective, philosophy, principal investment strategy and overall portfolio management process will remain the same, and the expense ratio is not expected to change.
The non-U.S., small-cap-stock fund aims to provide long-term capital appreciation, according to a Vanguard fact sheet.