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Fund Times

Vanguard Moves Closer to Offering a Hedge Fund

Plus, Jensen's Millen to retire, new SEC money market rules, two Royce funds close, and more.

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Vanguard has taken another step toward offering an "absolute return" fund, more than two years after Morningstar first reported that the family was experimenting with a hedge fund.

Vanguard has filed an exemptive relief application with the SEC seeking the OK to launch an absolute return fund (one that attempts to achieve positive returns in all markets) that would be used as a component of the family's Managed Payout Funds. Vanguard essentially wants to create a separate, off-shore alternative strategies fund that would invest in a wide range of alternative strategies at lower cost and with less risk than the Managed Payout Funds could do on their own directly, according to the filing. The alternative strategies fund is a subfund of an umbrella fund called Vanguard Investments Select Series I, PLC, which is registered in Ireland as a limited liability variable capital corporation.

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