Vanguard Brings on Kalmar for Explorer Fund

The suburban Philadelphia mutual fund family said in a news release that it has brought Kalmar Investment Advisers to the five-member panel now running the fund.

According to Vanguard, the Wilmington, Delaware-based Kalmar is a research driven investment firm that manages “growth-with-value” smaller cap equity portfolios. Together with Kalmar Investments Inc., its parent formed in 1982, Kalmar Investment Advisers manages approximately $1.7 billion in assets primarily for institutional clients.

Vanguard said Kalmar’s investment strategy is to seek out promising growth companies undervalued by the market, with the expectation of generating both higher return and lower risk. The firm’s fundamental approach to stock selection integrates creative smaller growth company investing with strong value-seeking discipline in a long-term context., Vanguard said.

As of December 31, 2004, the other advisers included.

• Grantham, Mayo, Van Otterloo & Co., LLC, with approximately 28% of the fund’s assets
• Vanguard’s Quantitative Equity Group, 24%
• Granahan Investment Management, Inc., 21%
• Wellington Management Company, LLP, 15%
• Chartwell Investment Partners, 7%.

The remaining 5% was held as cash.

To minimize the tax consequences of reapportioning assets to the new advisor, Vanguard will direct new cash inflow and a designated amount of the fund’s current cash position to the new adviser. The addition of the new adviser is not expected to have a material impact on the 0.57% expense ratio of the Investor Shares of the fund, Vanguard said.