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Vanguard International Explorer

Observant1
edited March 20 in Fund Discussions
"For the past decade or so, Vanguard has been searching for the right mix of managers for the actively managed foreign small stock fund. Today (March 17), Vanguard stopped the music, and Baillie Gifford is the odd manager out."

"Vanguard is not replacing Ballie Gifford with another sub-adviser but is redirecting the fund’s assets to Wellington Management. With the change, Wellington will invest 60% of International Explorer’s assets while Schroder Investment Management (the fund’s original manager) will oversee 40% of the portfolio."

https://www.independentvanguardadviser.com/iva-quick-take-vanguard-reshuffles-international-explorer-again/

Note: Full post is accessible to paid subscribers only (which I'm not).

Comments

  • Observant1
    Ballie Gifford is a well-regarded investment firm.
    They have co-managed Vanguard International Growth (VWILX) for many years along with Schroder Investment Management.
    VWILX has generated good long-term returns (with considerable volatility).
    Maybe Ballie Gifford's strategy did not mesh well with Wellington and Schroder at Vanguard International Explorer (VINEX)?
  • yogibearbullyogibearbull
    James Anderson (Ballie Gifford) retired from VWIGX / VWILX in 2022. Fund has a concentrated growth strategy that is hard to replicate, so the new team has to prove itself. Now it lags indexed VTIAX / VXUS for 1, 2, 3 years with higher volatility.

    Vanguard has been tinkering with VINEX for a long time and this is just the latest. Ballie Gifford was probably let go because of its inconsistent concentrated-growth strategy.
  • a2z
    edited March 20
    i like the change as longterm holder. disagree w/author that one should rationally choose an index in this space.
    "...no reason to rush into this active fund over its index fund sibling."

    speculating that vanguard finally accepted 'risk'-adj performance of BG was really bad even for growth sleeve.
  • mrc70
    It's been an underwhelming fund since I started observing it from 2005. I am not sure if multi-subadvisor approach leads to any significant outperformance over benchmark. There could be exceptions, but in general that is a questionable approach for active funds.

    I was in OAKEX for a while, and then moved last year to Artisan International Explorer (ARDBX) fund. Generally, Artisan did a good job with their new funds, especially when are new and small. I am a very happy investor of ARTKX since 2008, and then I also bought ARTYX within a few months of inception (believing in manager with track record with a new fund). More recently, I also invested in their EM debt fund along with ARDBX.
  • Observant1
    edited March 20
    "I am not sure if multi-subadvisor approach leads to any significant outperformance over benchmark.
    There could be exceptions, but in general that is a questionable approach for active funds."

    Some actively managed Vanguard funds have too many investment advisors.
    I don't want numerous cooks in the kitchen and typically prefer no more than two advisors per fund.
  • Observant1
    edited March 20
    List of Vanguard funds with three or more investment advisors:
    VMMSX - 3
    VEVFX - 3
    VHGEX - 3
    VGIAX - 3
    VTRIX - 3
    VASVX - 3
    VWUAX - 3
    VWNAX - 4
    VEXRX - 5

    https://institutional.vanguard.com/tools/investment/active-portfolio-managers.html
  • a2z

    wellington is co on 8 funds...but IVA is a wellington fan.

    has wellington ever been fired other than in a complete vanguard in-house takeover?
  • yogibearbullyogibearbull
    a2Z, you may know the background - the old load-fund family Wellington fired its CEO BOGLE in 1970s who then started Vanguard, convinced Wellington to offer its funds as no-load funds under Vanguard, and Wellington Management would serve as advisor/subadvisor for many of Vanguard's active funds. Of course, Bogle also moved Vanguard into indexing in a big way and those were run by computer algorithms.

    All of this was quite remarkable for a fired CEO.

    Relations between Wellington Management and Vanguard have remained good. They workout any problems behind the scenes and telegraph changes to each other in advance. In multimanager VG funds, Wellington Management's share may go up or down.
  • a2z

    yes. IVA could have basically stated he is against co-managers unless its wellington!
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