15
Morningstar FundInvestor
January 2
014
reduce cash flow, with the aim of preserving the
advisors’ ability to implement their investment
strategy and produce competitive long-term returns,”
said Vanguard
CEO
Bill McNabb. “Cash flow to
the fund has subsided, which, along with a change
in market conditions, has enabled us to reopen
the fund.”
Vanguard also reopened
Vanguard Intermediate-
Term Tax-Exempt
VWITX
to new investors.
Vanguard Rolls Out Global Minimum
Volatility Fund
On Thursday, Dec.
12
, Vanguard launched a new
actively managed fund,
Vanguard Global Mini-
mum Volatility
VMVFX
, which will invest in stocks
around the globe. The fund has two share classes,
Investor and Admiral, with expense ratios of
0
.
30%
and
0
.
20%
, respectively.
Vanguard had been considering low-volatility options
for at least three years. Unlike existing offerings
in the low-volatility exchange-traded fund space,
however, Vanguard’s fund is actively managed as
opposed to passively managed—somewhat sur-
prising considering Vanguard’s dominance and exper-
tise in index funds. The fund isn’t subadvised, either,
as many of the firm’s actively managed funds are.
Instead, it will be run by the firm’s quantitative team,
the active equity group, which is now under fairly
new leadership in John Ameriks. Ameriks, who
assumed his current post in early
2013
, is a Vanguard
veteran and was instrumental in designing Vanguard’s
target-date funds and endowmentlike managed-
payout funds.
The new fund’s managers are James Troyer, James
Stetler, and Michael Roach. This fund will look to
invest in names that have exhibited lower volatility
relative to other stocks in the
FTSE
Global All-Cap
Index (
USD
Hedged). It also will consider correlations
among stocks when constructing the portfolio. The
FTSE
Global All-Cap Index includes emerging markets,
which can be volatile in and of themselves but which
also can provide diversification benefits and poten-
tially reduce a broad portfolio’s volatility over the long
haul. The managers will hedge most of the portfolio’s
currency exposure; doing so can have a meaningful
impact on a fund’s volatility (and performance relative
to actively managed global-equity peers). Although
the fund will be actively managed, Vanguard’s active
equity group typically aims for returns that are highly
correlated with designated benchmarks.
American Century Appoints Co-CIOs
At American Century, two chief investment officers
will take the place of one.
The fund shop had been looking for a new
CIO
since
the April
2013
departure of Enrique Chang, who
went to Janus. The search ended on Tuesday, Dec.
10
,
when American Century announced the appointment
of co-
CIO
s Victor Zhang and David MacEwen.
While Zhang will focus on the equity side and
MacEwen the fixed-income investments, they have
joint oversight over firmwide investment-manage-
ment decisions such as how to allocate resources
across the firm, and both will serve on the
management committee.
MacEwen, who has worked at American Century
since
1991
, assumes his new role immediately.
Zhang, who is moving over from Wilshire Funds
Management, begins on Feb.
17
,
2014
.
FPA Paramount Payout on the Way
FPA Paramount
FPRAX
said it would pay out
$
4
.
65
per share in capital gains in early January. The
unusual January payout is a result of the strategy
and management change at the fund. New managers
Greg Herr and Pier Py took the helm in September
2013
. They remade the fund into a global value strat-
egy and have obviously cleared out most of the
old portfolio.
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