Vanguard Group has announced that it will introduce its first actively managed equity fund in five years.
The Vanguard Explorer Value Fund, which will be available to investors in January, will be fundamentally managed and will specialize in small- to mid-cap U.S. value stocks, the Valley Forge, Pa., company said on Monday.
In December 2004, Vanguard started its last actively managed equity fund, Primecap Core Fund, a large-cap growth portfolio that now has $4.5 billion of assets under management. Since then, the company has focused on developing index funds, to ensure that it was covering all aspects of the investment "style box," said Rebecca Katz, a spokeswoman. Now, Vanguard wants to do the same with actively managed equity funds, she said.
The new fund will complement the $7.9 billion-asset, growth-oriented Vanguard Explorer Fund, an actively managed fund launched in 1967. "We are probably best known for our index funds," Katz said, "but our assets are fairly evenly split between index and active. Some of our oldest funds are actively managed."
Cardinal Capital Management in Raleigh, Sterling Capital Management in Charlotte and Frontier Capital Management in Boston are to manage the portfolio in keeping with Vanguard's style of outsourcing the management of active equity funds.