San Francisco Deferred Compensation Plan added the Vanguard Small-Cap Value Index Fund to its investment options lineup, said Norm Nickens, board secretary.
The Vanguard Group fund replaces the Target Small Capitalization Value Portfolio as an investment choice for participants. The Target fund represented $82 million of the defined contribution plan's assets, or about 3.1% of the $2.69 billion plan.
The change comes after the Target fund's manager, Prudential Investments, announced in December that it had replaced all six subadvisers for the fund with a Prudential Financial subsidiary, Quantitative Management Associates, said Caryn Bortnick, interim deferred compensation manager, in an April 8 memo.
A separate April 8 memo from Angeles Investment Advisors, the DC plan's consultant, said before it was tapped as the subadviser for the Target fund, the QMA small-cap value strategy had only a total of $200 million in assets under management.
“The addition of the Target Small Cap Value fund's assets brought the QMA strategy's assets to $2.3 billion, an over (10 times) increase in assets in a short time period,” the memo said. “This is an issue of concern, especially because small-cap value is a less-liquid market segment.”