Scott Tracy, chief investment officer of the eight-person RS Investments growth team, will serve as co-portfolio manager along with Steve Bishop, Melissa Chadwick-Dunn, and Christopher Clark.
Chartwell Investment Partners was terminated after Vanguard's trustees evaluated the company. They used a number of factors, including investment process and staffing, to make their decision.
“While we are clearly disappointed with the end of Chartwell's Vanguard relationship, we do not believe the revenue impact will have a material effect on earnings given this particular account's steadily declining size and fee rate,” said James F. Getz, chairman, president and CEO of Chartwell parent TriState Capital Bank, in a news release.
Mr. Getz added: “We have taken steps to enhance the performance and management of Chartwell's small- and mid-cap growth strategies, in order for them to better match the standard that clients have come to expect from our growing and increasingly diversified investment management franchise and to take advantage of the additional capacity in higher fee rate business in these strategies that is made available to us through this situation.”
Additionally, modifications have been made to the $11.4 billion Vanguard Explorer Fund. The majority of the portfolio formerly managed by Chartwell (7%) will be allocated to Arrowpoint Asset Management and Stephens Investment Management Group, two existing advisers of the fund. Following the transition, the new manager allocation of the fund is expected to be as follows: Wellington Management Co., 34%; Arrowpoint, 15%; Granahan Investment Management, 13%; Kalmar Investment Advisers, 13%; Stephens Investment, 12%; and Quantitative Equity Group, 11%; with the remaining 2% in cash.
The investment objectives and principal investment strategies of the Mid-Cap Growth and Explorer funds will remain the same.
Vanguard managed more than $3.8 trillion in assets as of Nov. 30.