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Products December 22, 2009
Vanguard to Offer New Active Equity Fund
December 22, 2009 (PLANSPONSOR.com) - Vanguard plans to introduce its first actively managed equity fund that invests primarily in small- to mid-capitalization U.S. value stocks.
Reported by Rebecca Moore
The firm has filed a registration statement with the Securities and Exchange Commission to offer Vanguard Explorer Value Fund, which is expected to be available for purchase in the first quarter of 2010. According to an announcement, it will mark the first time since the launch of Vanguard PRIMECAP Core Fund that Vanguard is introducing a new fundamentally managed equity fund.
“Over the past few years, Vanguard has focused primarily on building our
lineup of low-cost index funds and ETFs,” said Vanguard CEO Bill McNabb,
in the announcement. “Today, we’re rounding out our stable of active
equity funds by creating a value fund that focuses on small- to mid-sized
companies.”
The new fund will be value-oriented, seeking long-term capital appreciation by
investing in companies at attractive valuation levels. The fund will employ
three advisory firms, each of which adheres to a bottom-up, fundamental
approach to stock selection: Cardinal Capital Management, Sterling Capital Management,
and Frontier Capital Management Co.
Cardinal will use a cash-flow-oriented investment process in the management of
the fund. Sterling will seek to identify stocks of quality companies selling at
large discounts to the underlying value of the business. Frontier will work to
identify companies that are mispriced relative to their long-term intrinsic
value.
It is expected that each of the advisers will initially manage a third of the
fund’s assets.