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Investing Specialists

Vanguard Reins in Hot Fund while a New One Cools Its Heels

Family adds manager to Vanguard Capital Value and plots launch of new small-value fund.

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Vanguard has taken steps to tone down its hottest performing fund and laid plans to launch a new actively managed domestic small-cap value fund. The family also announced some routine manager changes to  Vanguard International Growth (VWIGX) and  Vanguard International Value (VTRIX).

Vanguard has added a manager to  Vanguard Capital Value (VCVLX), which has gained more than 80% this year and has been among the best performing domestic stock funds of 2009. David Palmer will join Peter Higgins, who has run the fund since June 2008. Both Palmer and Higgins work for subadvisor Wellington Capital Management but will run separate sleeves of the fund independently and in different styles.

Back to the Future
Ironically, Palmer is a member of the Radnor, Pa.-based team whose members still run most of  Vanguard Windsor (VWNDX) and used to run Capital Value until the Boston-based Higgins took over at Vanguard's request. Palmer has been listed as a manager of the Wellington subadvised Hartford Value Opportunities (HVOAX) for nearly seven years with former Capital Value and Windsor manager David Fassnacht, and current Windsor manager James Mordy.

Dan Culloton does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.