Vanguard Taps T. Rowe Price to Advise 3 Equity Funds

The Vanguard Group Inc. announced on Monday the selection of T. Rowe Price Associates Inc., a subsidiary of T. Rowe Price Group Inc., as an adviser to three of its active equity funds: the Vanguard Explorer Fund, the Vanguard Variable Insurance Fund-Small Company Growth Portfolio and the Vanguard Growth and Income Fund. 

Vanguard has historically maintained a multi-manager structure for many of its active strategies.

Vanguard is adding two investment teams from T. Rowe Price. For the Explorer Fund and VVIF Small Company Growth, T. Rowe Price will use a small- and mid-cap growth strategy that combines insights from its research platform. For the Growth and Income Fund, T. Rowe Price will use insights from its analyst research platform with a risk framework.

T. Rowe Price is a global asset management firm which managed $1.89 trillion in client assets as of May 31.

According to the announcement, Vanguard expects the expense ratio for the Growth and Income Fund to increase to 0.40% from 0.39% for investor shares. The expense ratio for VVIF Small Company Growth is expected to increase to 0.32% from 0.29%. No changes are expected for the expense ratio of Explorer Fund.

As part of the changes, ArrowMark Colorado Holdings LLC will no longer serve as an adviser to the Explorer Fund and the VVIF Small Company Growth Portfolio, and Los Angeles Capital Management LLC will no longer advise the Growth and Income Fund.

In considering prospective advisers, Vanguard reported that it considered factors including investment philosophy, team stability, performance track record, risk characteristics and capacity.