401 / 708
15
Morningstar FundInvestor
September 2016
net inflow of
$10
.
3
billion, followed by
AQR
with
$10
billion, and Metropolitan West with
$6
.
6
billion
in inflows.
Vanguard’s top-selling funds are
Vanguard Total Stock
Market Index
VTSAX
(
$22
billion for the year to date),
Vanguard Total International Stock Index
VTIAX
(
$21
billion),
Vanguard Total Bond Market Index
VBTLX
(
$10
billion), and
Vanguard 500
VFIAX
(
$7
billion).
The five firms with the most outflows are Franklin
Templeton (negative
$24
.
5
billion for the year to date),
Fidelity (negative
$10
.
9
billion), Ivy (negative
$10
.
1
billion),
PIMCO
(negative
$9
.
2
billion), and
GMO
(nega-
tive
$8
.
9
billion).
Franklin’s most-redeemed funds are
Templeton
Global Bond
TPINX
(negative
$8
.
7
billion for the year
to date),
Franklin Income
FKINX
(negative
$3
.
7
billion), and
Franklin Mutual Global Discovery
TEDIX
(negative
$2
.
8
billion).
Assessing Vanguard International Growth’s New Look
Vanguard International Growth
’s
VWIGX
road may
be a little rockier at times, but its long-term
prospects remain bright. Thus, the fund retains its
Morningstar Analyst Rating of Silver.
There’s been another manager change here, although
its impact will be on the margin. Vanguard removed
subadvisor M
&
G and portfolio manager Charles Anniss
from the fund on July
15
,
2016
. At the time, M
&
G
managed
11
.
5%
of the portfolio. M
&
G’s assets were re-
allocated among the two remaining subadvisors,
Baillie Gifford and Schroders. The two subadvisors now
manage
60%
and
40%
of fund assets, respectively.
Vanguard doesn’t give reasons for subadvisor changes,
but M
&
G’s removal may have owed to frequent
personnel changes at the firm. Anniss became sole man-
ager of the fund’s M
&
G sleeve in October
2014
,
replacing Greg Aldridge. Given that M
&
G only managed
11
.
5%
of assets, its departure shouldn’t have a huge
impact on the fund. Plus, those assets went to existing,
rather than new, subadvisors. That said, M
&
G was the
most valuation-conscious of the three subadvisors, so
without it, the fund may become even more growth-
oriented. (As a result, the
MSCI ACWI
ex
USA
Growth
Index may be the better benchmark going forward.)
Based on Vanguard data, the July
2016
portfolio
showed higher average price multiples than in the
month prior. Before the manager change, the portfo-
lio’s average price multiples were a bit below the
foreign large-growth Morningstar Category averages.
This could make the fund more volatile than in the
past, too, although historically it has tended to
tread water during downturns. However, it fared
worse than most foreign large-growth peers in
the
2015
–
16
bear market because of its overweighting
in emerging markets, as growth stocks held up
better. The fund fell
24
.
9%
peak to trough (May
22
,
2015
, to Feb.
11
,
2016
) versus a
20
.
7%
decline for
the
MSCI ACWI
ex
USA
Growth.
But the fund’s excellent long-term record makes it
easier to ride out such bouts of volatility. With
experienced managers James Anderson and Simon
Webber in charge, the fund’s strong foundation
remains in place.
Aston Funds Getting Renamed
As of Oct.
1
,
2016
, the Aston funds will be changing
their names, one more step in the integration of the
family into the Affiliated Managers Group lineup
of funds. The six funds subadvised by River Road will
change to names beginning with “
AMG
River Road,”
so that
Aston/River Road Dividend All Cap Value
ARIDX
, with a Morningstar Analyst Rating of Bronze,
will become
AMG
River Road Dividend All Cap Value.
Aston Small Cap
ATASX
will change its name to
AMG GW&
K U.S. Small Cap Growth, reflecting the offi-
cial transition to new subadvisor
GW&
K. The other
funds will change to names beginning with “
AMG
Man-
agers,” so that Silver-rated
Aston/Fairpointe Mid
Cap
CHTTX
will become
AMG
Managers Fairpointe Mid
Cap and Bronze-rated
Aston/Montag & Caldwell
Growth
MCGFX
will become
AMG
Managers Montag
&
Caldwell Growth. All of the funds’ ticker symbols
will remain the same, as will their strategies.
K