Vanguard Removes Oaktree as Emerging Markets Fund Advisor
The giant asset manager said Monday it also shaved the expense ratio of the $785 million fund effective immediately.
Vanguard has removed Oaktree Fund Advisors as an investment advisor for the Vanguard Emerging Markets Select Stock Fund and split its allocation among two other fund advisors — Baillie Gifford Overseas and Pzena Investment Management.
The giant asset manager said Monday it also shaved the fund’s expense ratio as a result, effective immediately.
According to Vanguard, its manager research team conducts ongoing reviews of current and prospective investment advisors, looking beyond short-term performance to focus on long-term success for investors. As part of this process, it recently decided that advisory structural changes would best serve fund shareholders.
Under the new structure, Baillie Gifford and Pzena will each be allocated 37.5% of the $785 million of assets in the Emerging Markets Select Stock Fund (ticker FEMAX), while Wellington Management will be allocated 25%.
As a result of these changes, Vanguard said, the asset manager has trimmed the fund’s expense ratio to 0.79% from 0.80%.
Earlier, the fund’s four advisors had split the allocation evenly at 25% each.
Vanguard’s EM fund has generated a 4.6% total return year to date, 4.4% over five years and 2.76% over 10 years as of Friday, according to Morningstar. Those results lag the Morningstar Emerging Markets Index, the research firm says.
Pzena and Wellington have managed the fund since its inception in 2011, as had OakTree; Baillie Gifford was tapped as a manager in 2018. Ballie Gifford, Pzena and Wellington manage multiple funds and strategies on behalf of Vanguard, but Oaktree no longer serves as an advisor for any of its funds.
The investment objective, principal investment strategies and policies of Vanguard’s EM fund will remain unchanged, the asset manager said.
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