News release

Vanguard Bolsters Active Management Roster With Addition Of Clearbridge Investments

VALLEY FORGE, PA (March 20, 2017)—Vanguard announced today that ClearBridge Investments, LLC, will join its roster of world-class investment advisory firms to manage a portion of the $11.9 billion Vanguard Explorer Fund. Vanguard also announced that Granahan Investment Management, Inc., and Kalmar Investment Advisers will no longer serve as advisors to the fund. 

Headquartered in New York City, ClearBridge is a global investment management firm with a legacy dating back to 1962. The firm’s seven-member small/mid-cap team functions as a highly collaborative unit, combining the best of sector specialties and broad-based investment management expertise. The team’s investment strategy focuses on identifying companies that are category leaders or have potential to become category leaders, and display capital allocation discipline aimed at fueling long-term, sustainable growth.

Jeffrey Russell, CFA; Derek Deutsch, CFA; Brian Angerame; and Aram Green, with a collective 90 years of investment management experience, will serve as portfolio managers to the Explorer Fund. They are supported by three small/mid-cap analysts and also benefit from the firm’s broader investment resources, including a 12-member central research function.

“The investment professionals in Vanguard’s Portfolio Review Department continuously scour the globe for top-tier talent to enrich our active management capabilities,” said Vanguard CEO Bill McNabb. “The addition of ClearBridge’s experience and expertise, particularly in the small and mid-cap market segments, brings further depth to the fund and to our diverse active management roster.”   

Following the transition, Explorer Fund will allocate assets among five advisors: Wellington Management Company LLP, 34%; Vanguard Quantitative Equity Group, 18%; ClearBridge,15%; Arrowpoint Asset Management, LLC, 15%; and Stephens Investment Management Group, LLC, 14%; with the remaining 4% in equitized cash investments. The expense ratios for Explorer Fund’s Investor Shares and Admiral Shares are not expected to increase, and the investment objective and principal investment strategies for the fund will remain the same.

Vanguard’s enduring approach to active management

Vanguard’s distinctive and time-tested active management legacy originated in 1929 with the founding of Vanguard Wellington Fund, one of the industry’s first balanced funds. Today, Vanguard is among the largest actively managed fund companies in the world, managing more than $1 trillion in active assets. A focus on low costs, rigorous fund oversight, and access to a diverse group of talented managers has contributed to a history of competitive performance. Over the past 10 years, 95% of Vanguard’s actively managed funds outperformed their peer group averages.1

Vanguard’s CEO-led search and oversight process sustains a long-term perspective and promotes continuity of manager evaluation. In the assessment of new and existing managers, Vanguard focuses on four key drivers of investment success: the firm, the people, the philosophy, and the investment process. This robust qualitative and quantitative evaluation process is ongoing and multi-faceted, aligning the best managers with strategies across the investment spectrum. Importantly, Vanguard has a distinct advantage in its ability to engage leading advisory firms at a reasonable cost. The firm’s unique mutual ownership structure, large scale, and long-term perspective have reduced the cost of investing for clients. In the U.S. market, Vanguard’s expense ratio average for active funds is 0.20% versus the industry average of 0.71%.2

Vanguard has employed a multi-manager approach since 1987 and currently uses this strategy for 18 actively managed U.S.-domiciled equity funds. This structure enables each manager to focus on longer-term opportunities in which they have the most conviction. Vanguard purposely combines high-quality managers employing distinct investment strategies that are complementary to the other managers in the fund. Managers are complementary in that they have limited holdings overlap, style biases, and resultant correlation of excess returns. This approach provides the potential for long-term outperformance and can reduce the variability of excess returns.


 About Vanguard

Vanguard is one of the world’s largest investment management companies. As of February 28, 2017, Vanguard managed more than $4 trillion in global assets. The firm, headquartered in Valley Forge, Pennsylvania, offers more than 360 funds to its more than 20 million investors worldwide. For more information, visit

 All asset figures as of February 28, 2017, unless otherwise noted.

1 Source: Vanguard and Lipper, as of December 31, 2016.

For the ten-year period ended December 31, 2016, 111 of 117 Vanguard’s actively managed funds outperformed their peer group averages; results will vary for other time periods. Only funds with a minimum ten-year history were included in the comparison. (Source: Lipper, a Thomson Reuters Company) 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

2 Source: Morningstar, as of December 31, 2016.

For more information about Vanguard funds and ETFs, visit 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.

All investing is subject to risks, including possible loss of principal.

Prices of mid- and small-cap stocks often fluctuate more than those of large-company stocks.

Vanguard Marketing Corporation, Distributor of the Vanguard Funds.