News release

Vanguard Makes Changes To Two Active Equity Funds

VALLEY FORGE, PA (July 27, 2018)—Vanguard today announced changes to two actively managed equity funds. The $2.3 billion Vanguard Precious Metals and Mining Fund (VGPMX) will be renamed to Vanguard Global Capital Cycles Fund as part of a restructuring intended to broaden the fund’s mandate and diversify its portfolio. Wellington Management Company LLP will manage the fund effective today. Additionally, Baillie Gifford Overseas Ltd. has been added to the advisory team of the $641 million Vanguard Emerging Markets Select Stock Fund (VMMSX). M&G Investment Management Limited will no longer serve in an advisory capacity for either fund.

The restructured Global Capital Cycles Fund is intended for investors with a long-term time horizon who seek a complement to their core global equity allocation that exhibits lower correlations to the broad equity markets. The new strategy and name are expected to become effective in late September 2018.

In managing the fund, Wellington Management will adhere to a capital cycles strategy as its primary investment approach, seeking to capture opportunities in commodity-oriented industries, such as the materials and natural resource sectors, which follow cyclical patterns. The strategy will also focus on companies that own irreplaceable or scarce infrastructure assets primarily in telecommunications and utilities. While the fund will maintain meaningful exposure to precious metals and mining stocks, the capital cycles strategy encompasses a broader opportunity set from which to identify return potential. 

Wellington Management Senior Managing Director Keith White will serve as portfolio manager. Mr. White will be supported by the firm’s 16-member natural resources and utilities team, as well as the firm’s 40 global industry analysts. Founded in 1928, Wellington Management is among the nation’s oldest and most respected institutional investment managers. With a partnership extending back to Vanguard’s founding in 1975, the firm currently serves as Vanguard’s largest external advisory partner. Wellington Management now manages 29 mandates and more than $359 billion on behalf of Vanguard investors.

A CEO-led oversight team continuously monitors the Vanguard funds and takes the appropriate measures to enhance their risk/reward profiles and ensure the stated objectives are being met. “After careful analysis of the performance and usage of the Precious Metals and Mining Fund, we are restructuring the portfolio and changing the advisor to improve investor outcomes,” said Vanguard CEO Tim Buckley. “We are confident that the new mandate and the Wellington team will result in a fund that is more diversified and predictable.”  

Vanguard Gold and Precious Metals Fund was introduced in 1984 for investors who wish to diversify their investment portfolios through exposure to a sector that tends to perform differently than the broad equity market. Since inception, the fund’s strategy has undergone two prior modifications in response to industry changes and in an effort to preserve the fund’s original purpose of providing returns that are not highly correlated with more traditional equity strategies.

The change in the fund’s investment advisory arrangement is expected to increase the fund’s expense ratio to 0.37% from 0.36%.  

Baillie Gifford added to Emerging Markets Select Stock Fund

Also effective today, Baillie Gifford will join the management roster of the Emerging Market Select Stock Fund. Baillie Gifford’s portion of the fund will be managed by Richard Sneller, partner and head of emerging markets equity strategy, along with investment managers Andrew Stobart and Mike Gush. Mr. Sneller leads a nine-member investment team and has served as lead portfolio manager of Baillie Gifford’s emerging markets all-cap equities strategy since its inception in 1994. The team employs a growth-oriented approach and maintains a long-term investment horizon, typically three to five years and beyond. Their bottom-up, fundamental strategy emphasizes businesses that enjoy sustainable competitive advantages and can grow their earnings significantly faster than the market average.

The fund’s multi-manager approach combines high-quality managers with distinct and complementary investment strategies. Following the transition, the manager allocations are as follows: Baillie Gifford, 20%; Pzena Investment Management, LLC, 25%; Oaktree Capital Management, L.P., 25%; Wellington, 27%; with the remainder equitized in cash. The investment objectives and principal investment strategies of the fund will remain the same. The fund’s expense ratio is also not expected to change.

Vanguard’s active legacy

Today, Vanguard is among the largest providers of actively managed funds in the world with more than $1.2 trillion in active assets. Vanguard partners with 27 advisors from around the world and employs a multi-manager structure for 18 of its actively managed U.S. domiciled equity funds. The firm has more than $400 billion in active equity funds, with a weighted average expense ratio of 0.28%. 

Vanguard uses a performance-based, fulcrum fee arrangement that enables the firm to negotiate fee schedules with advisors at levels well below industry averages. This fee structure aligns manager and investor interests by directly correlating manager compensation with performance against a benchmark over a trailing 36-month or 60-month period. As of March 31, 2018, 86% of Vanguard’s active equity funds outperformed their peer averages over 3 years, 88% outperformed over a 5 year period, and 91% outperformed over a ten year period1.

“Our external advisory partnerships provide our clients access to world-class managers and diversity of thought at a low cost,” said Jon Cleborne, global head of Vanguard’s Portfolio Review Department. “Vanguard believes that top talent, low cost, and patience are key drivers for successful active management.”


About Vanguard                                           

Vanguard is one of the world’s largest investment management companies. As of June 30, 2018, Vanguard managed $5.1 trillion in global assets. The firm, headquartered in Valley Forge, Pennsylvania, offers 400 funds to its more than 20 million investors worldwide. For more information, visit

1 For the three-year period, 38 of 44 Vanguard active equity funds outperformed their peer group averages. For the five-year period, 37 of 42 Vanguard active equity funds outperformed their peer group averages. For the ten-year period, 36 of 40 Vanguard active equity funds outperformed their peer group averages. Results will vary for other time periods. Only funds with a minimum three-, five-, or ten-year history, respectively, were included in the comparison. Source: Lipper, a Thomson Reuters Company, as of March 31, 2018.

Note that the competitive performance data shown represent past performance, which is not a guarantee of future results, and that all investments are subject to risks. For the most recent performance, visit our website at

For more information about Vanguard funds, visit to obtain a prospectus or, if available, a summary prospectus. Investment objectives, risks, charges, expenses, and other important information are contained in the prospectus; read and consider it carefully before investing.

All investing is subject to risk, including the possible loss of the money you invest. Diversification does not ensure a profit or protect against a loss. Investments in securities issued by non-U.S. companies are subject to risks including country/regional risk and currency risk. These are especially high in emerging markets. Funds that concentrate on a relatively narrow market sector face the risk of higher share-price volatility.

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