The Vanguard Group terminated its subadvisory relationship with M&G Investments, which subadvises two active equity funds, and replaced the firm with two new managers, spokeswoman Emily Farrell said.
M&G will no longer subadvise Vanguard's $2.3 billion Global Capital Cycles Fund (formerly the Precious Metals and Mining Fund), or part of its $641 million Emerging Markets Select Stock Fund. A news release on the changes said: "In short, these changes, including the new advisers, were made in the best interest of shareholders. Our board continuously oversees our funds and advisory arrangements, and assesses current and prospective investment advisers across a number of factors — including each adviser's investment staff and portfolio management processes. Ultimately, we believe the combination of high-caliber investment management firms with complementary strategies can reduce portfolio volatility, provide potential for long-term outperformance and mitigate manager risk."
M&G managed all of the assets in the Global Capital Cycles Fund and they have been reallocated to Wellington Management. Meanwhile, assets within the Emerging Markets Select Stock Fund M&G subadvised — about 20%, or $128 million — will be managed by Baillie Gifford Overseas.
Following the transition, the manager allocations for the Emerging Markets Select Stock Fund are:
- Wellington, 27%.
- Pzena Investment Management, 25%.
- Oaktree Capital Management (OAK), 25%.
- Baillie Gifford, 20%.
- And the remainder in cash.
The investment objectives and principal investment strategies of the fund will remain the same.
An M&G spokeswoman could not be immediately reached for comment.
Vanguard managed $5.1 trillion in assets as of June 30.