In Self-Demotion, Vanguard Picks Wellington Management
Vanguard fires itself from two multimanager funds.
Vanguard should stick to indexing. At least, that’s what its latest manager moves suggest, having fired its in-house, active management team from both Growth & Income (VQNPX) and U.S. Growth (VWUSX).
It may not be obvious but yes, while index funds rule the roost at Vanguard, some of the firm’s “crew” still engage in the ancient art of trying to pick stocks. Vanguard’s Quantitative Equity Group (QEG) uses computers to pick stocks based on parameters and algorithms established by its in-house gurus. While the quant team manages a few funds on their own—like Strategic Equity (VSEQX), Global Minimum Volatility (VMVFX) and its suite of factor ETFs—Vanguard also employs the group on some of its multimanager funds.
Vanguard’s quant team typically owns a very diversified portfolios (read, they own a lot of stocks) which can complement and help balance out a more concentrated manager, or managers. But as the recent moves may suggest, that isn’t always a winning strategy.