Nationwide Mutual Funds hired Diamond Hill Capital Management to subadvise about half of the assets of both the $800 million Nationwide Fund, a large-cap equity fund, and its $1 billion variable annuity clone.
Diamond Hill expects to begin managing those assets soon after mid-October, James F. Laird, Diamond Hill's CFO, said in a telephone interview.
Aberdeen Asset Management currently subadvises the entire fund, with roughly half in a fundamental large-cap blend strategy and half in a quantitative strategy. In a telephone interview, Michael Spangler, president of Nationwide Investment Management Group, said his investment team believes it would be tough for any quant strategy to outperform with the volatility that's likely to persist in the current business cycle.
Nationwide continues to see Aberdeen as a solid fundamental blend equity manager, and the firm will continue to oversee the fundamental portion of the fund it currently is managing, he said. The addition of Diamond Hill's more value-oriented approach should prove a strong complement, he added.
In addition, Turner Investment Partners was hired as subadviser of the $134 million Nationwide Growth, an equity fund, to replace Aberdeen, after Christopher Baggini, that fund's longtime portfolio manager, left Aberdeen earlier in the summer to join Turner, Mr. Spangler said.
For that fund's $113 million variable annuity offering, however, Nationwide hired American Century Investments to replace Aberdeen.
In an e-mailed statement, Gary Marshall, head of Americas at Aberdeen, said his firm is “delighted to continue to serve as subadviser to several large-cap core and small-cap Nationwide funds, including their flagship fund, the Nationwide Fund.”