As previously reported
by The MFWire
added a sixth manager –- Sanders Capital
–- to its Windsor II Fund
sub-advisory lineup on Wednesday. In Thursday's Fund Track column, the Wall Street Journal
's Jane J. Kim questions
the move and the fund firm's multi-manager approach.
According to the Journal, 15 of Vanguard's 27 actively managed equity funds count multiple managers –- a strategy that has been raising a few eyebrows among fund managers who closely watch the Valley Forge, Pennsylvania-based behemoth. So while some critics, such as Daniel Wiener
, a manager of an investment firm heavily invested in Vanguard, claim Vanguard is “adding too many 'chefs' in the kitchen", others defend the strategy as a means of offsetting risk and reducing portfolio volatility.
As Daniel Culloton
, associate director of fund analysis at Morningstar
points out, however, the quality of each manager is truly what is at stake rather than the quantity.
“If you add a bunch of mediocre managers to a fund, that could dilute performance,” Cullotn told the Journal. “But if you add a bunch of good managers to a fund who don't have a lot of overlap between their portfolios, theoretically it shouldn't.”
Sticking to its guns –- and to its affinity for multiple managers -– Vanguard plans to launch the Explorer Value Fund
, an actively managed small-to mid-cap value fund, in the first quarter of 2010.
Also noted in the column and previously reported
by The MFWire
, the Journal reports on the impending integration of Wells Fargo Funds Management
's Evergreen Investments
-- a union scheduled to transpire in July.
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