Vanguard Personal Advisor Services to Introduce Three Active Equity Funds

Vanguard

VALLEY FORGE, PA — Vanguard recently filed initial registration statements with the Securities and Exchange Commission to launch three new active equity mutual funds: Vanguard Advice Select Dividend Growth Fund, Vanguard Advice Select Global Value Fund, and Vanguard Advice Select International Growth Fund.

The funds are expected to launch in the fourth quarter of 2021 and will be available exclusively to clients of Personal Advisor Services (PAS), Vanguard’s industry-leading advice offer1 that combines sophisticated and customized portfolio management, financial planning tools, and a virtual experience with the behavioral coaching and guidance of a financial advisor. The funds will be made available for PAS clients investing through their advised portfolios as part of a five-fund active equity offer, along with two existing products—Vanguard International Core Fund and Vanguard Capital Opportunity Fund.

The active equity offer will primarily serve as a complementary allocation to PAS clients’ broadly diversified and low-cost index fund core portfolio holdings. Vanguard believes the funds’ concentrated, higher-alpha strategies are an ideal fit for PAS clients with sufficient risk tolerance and patience for active exposure as they can materially impact portfolio performance even at a relatively small allocation. PAS advisors will assess suitability and ensure the funds are prudently incorporated into their clients’ portfolios.

“We are enhancing our world-class investment lineup by introducing a thoughtfully designed, active equity offer to Personal Advisor Services,” said Matt Benchener, managing director of Vanguard Retail Investor Group. “Vanguard has delivered consistent and sustained outperformance as a leader in active investment management,2 and the introduction of this active equity offer will build upon that success. The funds, managed by top-tier portfolio managers, will enable more personalized portfolio construction and provide the potential to drive improved client outcomes over the long-term.”

PAS portfolios currently utilize both active and passive fixed income and equity products to meet client preferences and needs. The new offer will deliver global active equity exposure through a combination of five single-manager funds, including the three new funds:

  • Vanguard Advice Select Dividend Growth Fund will seek to outperform the broader U.S. market, focusing on financially sound, large-cap companies across a diverse range of sectors that have prospects for long-term total returns, as a result of their ability to grow earnings and their willingness to increase dividends over time. A more concentrated version of the strategy used in Vanguard Dividend Growth Fund, the fund will be managed by Wellington Management Company LLP and will have an estimated expense ratio of 0.45%, compared with the average expense ratio for large-cap core funds of 0.90%.3
  • Vanguard Advice Select Global Value Fund will provide global, all-cap, contrarian-value exposure by investing in discounted companies that are being avoided or overlooked. The fund will be managed by Wellington Management Company LLP and will have an estimated expense ratio of 0.40%, compared with the average expense ratio for global multi-cap value funds of 1.10%.4
  • Vanguard Advice Select International Growth Fund will employ a bottom-up equity strategy—analyzing the fundamentals of specific companies instead of broad sectors or industries—focused on exceptional international growth companies. The fund will be managed by Baillie Gifford Overseas Ltd., as a more concentrated version of the strategy used in Vanguard International Growth Fund. The fund will have an estimated expense ratio of 0.42%, compared with the average expense ratio for international large-cap growth funds of 1.13%.5

“Patience, discipline, and a long-term perspective are central to Vanguard’s investment philosophy and portfolio construction methodology, and are especially vital for active management,” said Jon Cleborne, head of Vanguard Personal Advisor Services. “Active management is particularly well-suited for advised portfolios because advisors can ensure expectations are managed appropriately, allocations are consistent with risk tolerance, and clients are supported and coached through periods of underperformance.”

Thanks for visiting! MyChesCo brings reliable information and resources to Chester County, Pennsylvania. Please consider supporting us in our efforts. Your generous donation will help us continue this work and keep it free of charge. Show your support today by clicking here and becoming a patron.