VALLEY FORGE, PA (October 1, 2019)—Vanguard today introduced Vanguard International Core Stock Fund (VWICX), expanding its actively managed roster of more than 70 mutual funds and ETFs.
The new fund, which will be managed by Wellington Management Company LLP (Wellington Management), represents Vanguard’s continued effort to complement its index products with industry-leading active products, including three additional active offerings introduced over the past year: Vanguard Global ESG Select Stock Fund, Vanguard Commodity Strategy Fund, and Vanguard Global Credit Bond Fund.
Vanguard International Core Stock Fund is designed to be a core holding, offering an active portfolio of developed and emerging market equities that is designed to outperform across regions, styles, and sectors. Vanguard advocates for investing in international stocks and bonds for the diversification and return potential, but its research indicates that many U.S. investors exhibit ‘home bias’ and have inadequate exposure to international securities.
Wellington Management’s Multi-Disciplined Approach
Founded in 1928 and managing more than $1 trillion in assets, Wellington Management is Vanguard’s oldest and largest external advisory partner. The firm will seek to add value through a multi-disciplinary investment approach that draws investment ideas from the full breadth and depth of Wellington Management’s global resources, specifically the firm’s quantitative research teams, macro-economic research, global industry analyst research, other portfolio management teams, and ESG analysis.
Wellington Management seeks to build an “all-weather” portfolio that prioritizes stock specific exposure, limiting the portfolio’s style, factor, region, and industry risk exposure through a sophisticated and centralized risk management approach. The firm’s approach targets an opportunity set of 350-400 companies, of which the fund will seek to hold approximately 60-100 large- and mid-cap stocks based on its assessment of each company’s management team, capital allocation, and competitive advantage. The approach is characterized as opportunistic, and does not emphasize any particular style or factor. The fund will be differentiated and benefit from this unique, multi-disciplined approach that incorporates the best investment ideas at Wellington Management and is designed to reduce downside risk, improve upside capture, and minimize unintended exposures.
Vanguard International Core Stock Fund will be managed by a pair of experienced portfolio managers:
- Kenneth L. Abrams, senior managing director and equity portfolio manager. A longtime portfolio manager for Vanguard Explorer™ Fund, Mr. Abrams has employed Wellington Management’s Global Perspectives strategy for 12 years with a focus on mid-and small-cap companies. Mr. Abrams joined Wellington Management in 1986. He earned his MBA in finance and his BA in economics and German literature from Stanford University.
- F. Halsey Morris, CFA, senior managing director and global industry analyst. Mr. Morris joined Wellington Management in 2008 and before that served as an equity analyst for BlackRock and a research analyst for State Street Research & Management Company. He earned an MBA in corporate strategy and finance from the Wharton School of the University of Pennsylvania and a BA in English from Dartmouth College.
“Mr. Abrams’ track record, leadership, and experience allow him to bring deep research capabilities to bear across many different parts of Wellington Management,” said Matt Brancato, head of Vanguard’s Portfolio Review Department. “Offering this multi-disciplinary approach as a core building block provides investors with the opportunity to build diversified exposure, along with the potential for outperformance.”
Vanguard International Core Stock Fund will be offered in Admiral Shares, with an estimated expense ratio of 0.35%, and Investor Shares, with an estimated expense ratio of 0.45%, both considerably lower than the asset-weighted average expense ratio of 0.75% for the industry’s large-blend fund category1.
Longstanding active management expertise
Vanguard has more than 40 years of experience in selecting and partnering with active managers and currently partners with 25 of the world’s top asset managers to oversee a full roster of active stock, bond, and balanced mandates. Vanguard conducts ongoing qualitative and quantitative reviews of its internal and external advisors, and evaluates them in five key areas: firm, people, philosophy, process, and performance. The firm’s approach is rooted in an adherence to consistent, repeatable processes over time, and a long-term perspective, which is critical to achieving long-term success in active management.
Today, Vanguard’s actively managed mutual funds represent $1.4 trillion; $625 billion is managed by external advisors, including traditional active equity, bond, and balanced assets; $673 billion is managed by the Vanguard Fixed Income Group, including taxable and tax-exempt bonds, and money market funds; and $41 billion is managed by the Vanguard Quantitative Equity Group.
Vanguard is one of the world’s largest investment management companies. As of August 31, 2019, Vanguard managed $5.6 trillion in global assets. The firm, headquartered in Valley Forge, Pennsylvania, offers 417 funds to its more than 30 million investors worldwide. For more information, visit vanguard.com.
All figures are as of August 31, 2019 unless otherwise noted.
1 Source: Morningstar, Inc., as of March 31, 2019.
For more information about Vanguard funds, visit www.vanguard.com, or call 800-662-7447, to obtain a prospectus or, if available, a summary prospectus. Investment objectives, risks, charges, expenses, and other important information about a fund are contained in the prospectus; read and consider it carefully before investing.
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