Fund Times: Vanguard Gives AXA Rosenberg the Ax
Also, new bond funds from American Funds, Perritt's founder cashes out, and a small fund learns to hedge.
Vanguard took more time and was more deliberate than many clients of AXA Rosenberg in deciding how to handle the subadvisor's belated revelation of a coding error in one of the computer models it uses to run money. Ultimately, however, Vanguard reached the same decision that other firms did sooner: It was time to part ways.
Vanguard has fired quant manager AXA Rosenberg as a subadvisor of Vanguard Explorer (VEXPX), Vanguard U.S. Value (VUVLX), and Vanguard Market Neutral (VMNFX) little more than three years after hiring the firm for the first two funds and adopting the third. The remaining subadvisors of those funds will take up AXA's roughly $1.8 billion in assets for now, Vanguard said. That means the fate of U.S. Value and Market Neutral, which have both struggled to compete with their peers and meet their objectives in recent years, will rest solely with Vanguard's own Quantitative Equity Group that, until recently, had managed about half of each fund. The change leaves Explorer with six subadvisors, five of whom are bottom-up fundamental managers.
Dan Culloton does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.