Vanguard Group is moving to adopt a long/short equity fund for institutional investors from Charles Schwab Investment Managements Laudus family of funds, said Vanguard spokeswoman Amy Chain. The proposal to reorganize the $21 million open-end Laudus Rosenberg U.S. Large/Mid Capitalization Long/Short Equity fund will be put before fund shareholders in early October and, pending approval, completed by the end of 2007.
The fund will continue to be subadvised by AXA Rosenberg Investment Management, which joined the advisory teams of the $12 billion Vanguard Explorer Fund and the $1.4 billion Vanguard U.S. Value Fund in June. The Vanguard Quantitative Equity Group will also manage a portion of the fund.
The fund, which will be Vanguards first long/short offering, is expected to appeal primarily to endowments and foundations, with a minimum initial investment of $250,000 for investor shares and $5 million for institutional shares. The funds expense ratio will be 0.75% for investor shares and 0.6% for institutional shares, well below the 1.97% ratio for funds in the long/short category tracked by Morningstar Inc., according to a Vanguard release.