Vanguard to Offer New Active Equity Fund
Vanguard plans to introduce its first actively managed equity fund that
invests primarily in small- to mid-capitalization U.S. value stocks.
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.
More information about Vanguard funds can be found at www.vanguard.com or by calling 800.662.7447.
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