Vanguard To Expand Balanced Fund Family With Introduction Of Two Global Portfolios

VALLEY FORGE, PA (July 26, 2017)—Vanguard, a pioneer and leader in balanced fund investing, today announced plans to add two actively managed global balanced funds to its lineup. Vanguard has selected Wellington Management Company LLP (WMC) to serve as the investment advisor to the new funds: Global Wellington Fund and Global Wellesley Income Fund.

The Global Wellington Fund will seek to provide long-term capital appreciation and moderate current income by offering a globally diversified portfolio invested in both equities and fixed income securities. The Global Wellington Fund will have approximately 65% of assets invested in equities and 35% of assets invested in fixed income securities. The Global Wellesley Income Fund will take a more conservative approach in primary pursuit of a high and sustainable level of current income, along with moderate long-term capital appreciation. As such, approximately 65% of its portfolio will be allocated to fixed income securities and 35% to equities.

“The Global Wellington and Global Wellesley Income Funds will offer investors the convenience of a turnkey investment program in a single fund, providing broad diversification among global stocks and bonds,” said Vanguard CEO Bill McNabb. “The funds reflect a thoughtfully constructed mix of domestic and international securities and represent Vanguard’s fundamental, time-tested investment principles—balance, diversification, discipline, low-cost, and a long-term orientation.”

Vanguard: An active balanced fund pioneer and leader

Investors entrust more than $800 billion to Vanguard’s multi-asset class portfolios. The firm’s roots in active balanced strategies date to the founding of Vanguard Wellington Fund in 1929 by Walter Morgan. Today, the Wellington Fund is the nation’s oldest balanced fund and the industry’s largest with over $100 billion in assets under management.

As one of the largest managers of active funds, Vanguard partners with some of the world’s top asset managers to oversee a full roster of active stock, bond, and balanced mandates. Today, Vanguard’s actively managed mutual funds represent $1 trillion, comprising roughly 25% of the company’s total assets under management.

Wellington Management Company brings experience, expertise

Wellington Management Company is a globally recognized investment manager with a proven track record and deep global expertise. Today, WMC oversees $351 billion across 23 Vanguard mandates. The Boston-based firm has advised the Wellington Fund since its inception in 1929, and the $52.4 billion Vanguard Wellesley Income Fund since its inception in 1970. WMC has successfully invested in markets outside of the United States since it opened its first international office in London in 1983. Today, the company employs more than 650 investment professionals in 13 offices located around the globe, serving clients in more than 65 countries.

The portfolio managers for both Global Wellington Fund and Global Wellesley Income Fund have extensive experience, with an average 27 years of investment management expertise:

  • Nataliya Kofman will serve as the portfolio manager for the equity portion of Global Wellington Fund. John Keogh, Michael Stack, and Loren Moran will serve as the portfolio managers for the fixed income portion of Global Wellington Fund.
  • Ian Link will serve as the portfolio manager for the equity portion of Global Wellesley Income Fund. Similar to Global Wellington Fund, Mr. Keogh, Mr. Stack, and Ms. Moran will also oversee the fixed income portion of Global Wellesley Income Fund.

Best practice portfolio construction at Vanguard cost

Vanguard believes that global diversification across both stocks and bonds offers investors many compelling benefits, including exposure to the widest opportunity set available. This helps reduce the risk of over-concentration in a single market region and offers the potential for enhanced long-term risk-adjusted returns. A globally diversified portfolio also reduces concentrated exposures to U.S. economic conditions, Central Bank policy, interest rate cycles, and other domestic risk factors.

Global Wellington Fund will offer Investor Shares with an estimated expense ratio of 0.45%, and Admiral Shares with an estimated expense ratio of 0.35%. Global Wellesley Income Fund will offer Investor Shares with an estimated expense ratio of 0.42%, and Admiral Shares with an estimated expense ratio of 0.32%. Both funds will have a minimum initial investment requirement of $3,000 for Investor Shares and $50,000 for the Admiral Shares. The funds are expected to launch in the fourth quarter of 2017.

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About Vanguard

Vanguard is one of the world’s largest investment management companies. As June 30, 2017, Vanguard managed $4.4 trillion in global assets. The firm, headquartered in Valley Forge, Pennsylvania, offers 369 funds to its more than 20 million investors worldwide. For more information, visit vanguard.com.

Assets figures as of June 30, 2017 unless otherwise noted.

All investing is subject to risks, including possible loss of principal. Be aware that fluctuations in the financial markets and other factors may cause declines in the value of your account. There is no guarantee that any particular asset allocation or mix of funds will meet your investment objectives or provide you with a given level of income. Diversification does not ensure a profit or protect against a loss.

Investments in bonds are subject to interest rate, credit, and inflation risk.

Investments in stocks or bonds issued by non-U.S. companies are subject to risks including country/regional risk and currency risk.

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