Money Management

Vanguard merges growth funds, shuffles managers

Vanguard announced Monday plans to merge its $15.1 billion Vanguard Morgan Growth Fund into its $10.2 billion Vanguard U.S. Growth Fund, according to a news release.

Vanguard also announced changes to the managers of the growth funds.

With the merger, which is scheduled to be completed by early 2019, the fund will retain the U.S. Growth Fund name and continue to invest primarily in large-capitalization stocks of U.S. companies considered to have above-average earnings growth potential and reasonable stock prices in comparison with expected earnings, the release said.

Wellington Management, Jackson Square Partners, Jennison Associates and Baillie Gifford will remain managers on the fund, and Vanguard Quantitative Equity Group will be added to the advisory team. William Blair Investment Management will be removed from the U.S. Growth fund, according to the release.

Post-merger, Wellington and Jennison each will manage 27% of the fund, Jackson Square and Baillie Gifford each will manage 15% of the fund, and Vanguard will manage 15%, a Vanguard spokeswoman said in an email.

Vanguard separately announced Monday that it is "realigning the multimanager approach teams" of three other funds, the release said.

In the process, William Blair also will be dropped from the teams for the $4.2 billion Vanguard Mid-Cap Growth Fund and the $664 million Growth Portfolio of Vanguard Variable Insurance Fund. Jackson Square and Wellington will remain on the VVIF growth portfolio, while RS Investments Management will remain on the midcap growth fund along with two new managers, Frontier Capital Management and Wellington.

Additionally, Acadian Asset Management no longer will manage a portion of the $5.4 billion Vanguard Global Equity Fund; Baillie Gifford and Marathon Asset Management will remain on the fund, the release said.

Regarding the fund manager changes, the Vanguard spokeswoman said in an email that the firm "has a long track record of enhancing our lineup in the best interest of our clients, including adding products where we believe there is investment merit and investor demand, merging funds, changing advisers and closing funds."

"Specific to the advisory changes announced this morning, as part of its oversight responsibilities, Vanguard considers numerous factors in the evaluation of current and prospective investment advisors, including investment staff, portfolio management process, and short- and long-term performance results," the spokeswoman added.