Star Vanguard Health Care Manager to Retire

Vanguard announced Ed Owens, manager of  Vanguard Health Care (VGHCX) for 28 years, will retire at the end of 2012.

Owens, manager since the fund's 1984 inception, has compiled one of the best records of any mutual fund manager. From his May 23, 1984, start through Sept. 4, 2012, Vanguard Health Care returned 16.3% annually, versus 10.7% for the S&P 500 Index. That success enriched scores of investors. Vanguard Health Care has long been the largest sector-focused mutual fund, a distinction it holds today, with $22.4 billion in assets.

Owens charted a different course from his competitors. In marked contrast to most health-care investors--generally a fast-trading, growth-leaning bunch--he employed a slow-moving, value-oriented approach. He was among the first managers to appreciate the health-care sector's global nature. Even today, the fund's non-U.S. stake remains above the health-care category norm. Ballooning assets in the late 1990s and early 2000s made it increasingly difficult for Owens to invest in smaller names, but he continued to deliver strong results with moderate volatility.

Owens' successor, Jean Hynes, no doubt has big shoes to fill, but she appears well-equipped for the task. Hynes has comanaged the fund with Owens since 2007 but has worked with him for far longer. She has been on subadvisor Wellington Management's health-care team since 1992. Along with the rest of Wellington's four-person team, Hynes has helped run Hartford Healthcare (HGHAX) with success since its 2000 inception, employing a similar approach to Owens'. Investors should expect Hynes' approach to resemble her predecessor's, and she'll be able to draw upon the insights of an experienced team.