Vanguard to Shut Large-Cap Quantitative Stock Mutual Funds
Vanguard Group Inc., the world’s largest mutual fund manager, said it will close two funds that use mathematical models to pick stocks.
The boards of Structured Large-Cap Growth Fund and Structured Large-Cap Value Fund voted on Feb. 25 to dissolve them on or about May 31, the Valley Forge, Pennsylvania-based company said today in a filing with the U.S. Securities and Exchange Commission. The funds hold a combined $12 million, Rebecca Katz, a Vanguard spokeswoman, said in an interview.
Structured Growth returned an average of 2.8 percent annually in the three years ended Feb. 25, including reinvested dividends, compared with 3.4 percent for Vanguard’s Growth Index Fund, according to data compiled by Bloomberg. Structured Value lost an average of 7.2 percent in the three years through Dec. 16, the last dates for which return data were available. Vanguard’s Value Index Fund lost an average of 4.9 percent in that period.
The closure was “a rare admission of defeat” for the firm, Dan Wiener, editor of Independent Adviser for Vanguard Investors, a New York-based newsletter, said in an e-mail. The filing was first reported by Wiener.
Vanguard removed Axa Rosenberg Group LLC, a quantitative investing unit of Paris-based insurer Axa SA, as manager of three other mutual funds in August after Axa disclosed programming errors that disrupted its investment process. Vanguard manages about $1.6 trillion.
To contact the reporter on this story: Christopher Condon in Boston at ccondon4@bloomberg.net
To contact the editor responsible for this story: Christian Baumgaertel at cbaumgaertel@bloomberg.net
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