Vanguard Makes Advisory Changes to Three Funds

Vanguard announced new investment advisory arrangements for Vanguard Windsor Fund, Vanguard International Value Fund and Vanguard Global Equity Fund.

All three funds follow a multimanager approach. The Board of Trustees for the funds added advisers to manage portions of two funds, and an existing adviser assumed greater responsibility for a portion of the third. AllianceBernstein LP will no longer serve as adviser to these funds.  

The $12.1 billion Windsor Fund added a new adviser, Pzena Investment Management LLC, which now oversees approximately 28% of the fund’s assets. Wellington Management Company LLP, which has served as an adviser since the fund’s inception in 1958, continues to manage the majority (approximately 71%) of the fund. The remainder of the fund’s assets is in cash investments.

Pzena employs a classic value investment approach, implementing their strategy through a combination of fundamental research and seeking the best value opportunities. Portfolio Managers Richard Pzena, John Goetz and Antonio DeSpirito, who have worked together since 1996, seek securities they believe are undervalued relative to long-term earnings.

ARGA Investment Management LP, a new adviser to the $6.1 billion International Value Fund, now advises about 21% of the fund’s assets. Lazard Asset Management LLC continues to manage about 29% of the fund, Edinburgh Partners Limited approximately 28%, and Hansberger Global Investors Inc. about 19%. Cash investments account for the remainder of the fund’s assets.

ARGA invests in undervalued businesses globally. Portfolio manager Rama Krishna and Steve Morrow use the dividend discount model and other valuation criteria as the framework to assess intrinsic value and conduct in-depth research to evaluate the quality of the business.

An adviser to the $3.7 billion Global Equity Fund since 2008, Baillie Gifford Overseas Ltd., has assumed responsibility for an additional 13% of the fund, and now manages about 19% of the fund’s assets. Marathon Asset Management LLP continues to manage about 44% of the fund, and Acadian Asset Management LLC about 33%. The remainder of the fund’s assets is in cash investments.

Baillie Gifford’s investment approach is based on long-term investments in well-researched and well-managed businesses that enjoy sustainable competitive advantages in their marketplaces. As they did prior to assuming greater responsibility for the fund, portfolio Managers Charles Plowden, Spencer Adair and Malcolm MacColl employ a fundamental “bottom up” approach to identify growth companies, screening them first for quality, then value.

According to Bill McNabb, Vanguard’s chairman and chief executive, the new advisory arrangements preserve the funds’ multimanager structure, which allows shareholders to benefit from the diversity of different investment approaches