VALLEY FORGE, PA — Vanguard has appointed T. Rowe Price Associates as an investment advisor for three actively managed equity funds while replacing two existing external managers, a move that reshapes oversight of the portfolios and modestly increases expenses for two of the funds.
The changes affect Vanguard Explorer Fund, Vanguard Variable Insurance Fund – Small Company Growth Portfolio, and Vanguard Growth and Income Fund, the company announced.
T. Rowe Price will assume advisory responsibilities across all three funds, marking the first time the firm has managed assets for Vanguard. At the same time, ArrowMark Colorado Holdings will cease advising Explorer Fund and the Variable Insurance Fund – Small Company Growth Portfolio, while Los Angeles Capital Management will no longer serve as an advisor to Growth and Income Fund.
For Explorer Fund, Vanguard is also adjusting allocations among its remaining managers to increase the portfolio’s exposure to growth stocks while maintaining its existing investment objective and overall risk profile.
“T. Rowe Price is a trusted name in active management,” said Dan Reyes, Vanguard’s global head of investment product. “Their long-standing commitment to fundamental research and consistent performance makes them a strong complement to our advisor lineup.”
T. Rowe Price will manage Explorer Fund and the Variable Insurance Fund – Small Company Growth Portfolio using a small- and mid-cap growth strategy that combines fundamental research with quantitative portfolio construction. For Growth and Income Fund, the firm will employ a research-driven stock selection strategy while maintaining industry allocations broadly in line with market benchmarks.
“For nearly 90 years, T. Rowe Price’s active investment approach has been grounded in deep fundamental research,” said Eric Veiel, the firm’s president, co-head of global investments and chief investment officer. “We will apply our proven strengths and expertise across these mandates.”
The advisory changes will increase annual expense ratios for Growth and Income Fund to 0.40% from 0.39% for Investor Shares and to 0.29% from 0.28% for Admiral Shares. The expense ratio for the Variable Insurance Fund – Small Company Growth Portfolio will rise to 0.32% from 0.29%, while Explorer Fund’s expense ratio will remain unchanged.
Vanguard said the boards overseeing the funds approved the changes following a review of the advisory arrangements. The funds’ investment objectives and principal investment strategies will not change.
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