Howard B. Schow, who won honors and shunned publicity as a manager of Vanguard mutual funds such as the $30.1 billion Vanguard Primecap, has died. He was 84.
A resident of San Marino, California, he died of natural causes on April 8 at Huntington Hospital in Pasadena, said Joel P. Fried, president of Pasadena-based Primecap Management Co.
As co-founder and chairman emeritus of Primecap Management, Schow -- rhymes with “now” -- managed portions of five funds for Vanguard Group Inc., the world’s biggest mutual fund company.
Schow, Fried and Primecap Management’s vice chairman, Theo A. Kolokotrones, were named domestic stock managers of the year for 2003 by Morningstar Inc. A ranking by Bloomberg Markets magazine in 2010 included Schow’s Primecap Odyssey Aggressive Growth fund as a top U.S. equities fund.
“Howard was the most focused investor I have ever known,” Fried said yesterday an interview. “He also was a great mentor to analysts. Almost anything that someone saw, Howard could put that into context of something he had seen 30, 40 years ago.”
Vanguard Chairman Bill McNabb said yesterday in a statement, “Howard Schow was a good friend and a wise and trusted investment manager. We will miss his perspective, his candor and his balance of optimism and pragmatism.”
For Vanguard, in addition to the Primecap Fund, Schow managed Primecap Core, Capital Opportunity, U.S. Opportunities (available to non-U.S. investors) and the Vanguard Variable Insurance Fund’s Capital Growth Portfolio, according to Valley Forge, Pennsylvania-based Vanguard.
At Primecap, which manages more than $60 billion for 25 clients including Vanguard, he also managed the portfolio of the Primecap Odyssey Funds.
Schow was involved in the day-to-day management of funds until shortly before his death, working at his home the last few weeks, Fried said. Kolokotrones and Fried are among the co-managers who have assumed his responsibilities. The others are Alfred W. Mordecai, Mitchell J. Milias and M. Mohsin Ansari.
In a rare 1994 interview with Forbes magazine, the publicity-averse Schow cited the importance of patience to go along with savvy stock picking.
“We don’t go for 20 percent or 30 percent gains,” Schow said. “We go for triples, quadruples, octuples. But that takes years.”
He also said, “A lot of doing well is drudgery.”
Dan Wiener, editor of the New York-based newsletter Independent Adviser for Vanguard Investors, said yesterday in an e-mail: “To say that he was one of the best and least-known investors would be a vast understatement. Schow plied his trade from comfortable but unassuming offices in Pasadena and, in his later years, from his home in San Marino.”
Wiener said Schow’s Primecap fund “took no prisoners in the war on indexing, making mincemeat of Vanguard’s vaunted 500 Index.” From its inception in 1984 through the first quarter of this year, Primecap outperformed the index fund by 2.4 percent per year, Wiener wrote.
The Primecap fund has gained 6 percent this year through April 10 compared with an 8 percent increase by the Standard & Poor’s 500 Index.
Howard Bernard Schow was born on July 28, 1927, and grew up in the New York City suburbs of Long Island. He became an Eagle Scout and served in the U.S. Navy during World War II, according to Charles D. Ellis’s 2004 book, “Capital: The Story of Long-Term Investment Excellence.” After the war he attended Williams College and Harvard Business School, starting his investing career with $6,000 earned as a settlement after a serious car accident, Ellis wrote.
Recipe for Success
He moved to Los Angeles in 1962 to work at Capital Research & Management Co., the oldest unit of Capital Group Cos., one of the largest U.S. investment companies. There, he rose to chairman.
Under his guidance, the firm’s Amcap Fund returned 12.7 percent annually, compounded, from its inception in 1967, Forbes reported in its 1994 profile. That fund’s recipe for success was mixing large companies with fast-growing, innovative small ones, then holding shares for years, Forbes said.
In 1983, Schow left Capital Research to open his own firm, landing the contract with Vanguard to run its new Primecap fund.
Schow married the former Nan Walsh in 1953. They had three children, Melanie, Rodger and Steven.