Vanguard has dropped Granahan Investment Management and Kalmar Investment as subadvisors on its $11.9 billion US small cap Explorer fund and replaced them with ClearBridge Investments.
Its decision to drop Granahan Investments ends a 32-year partnership with the Boston firm which has subadvised a number of funds on behalf of Vanguard since 1985.
The Explorer fund’s subadvisors now sees ClearBridge run 15% of the fund’s assets alongside Wellington Management Company (34% of the fund), Vanguard Quantitative Equity Group (18%), Arrow Point Asset Management (15%) and Stephens Investment Management Group (14%).
The remaining 4% lies within equitized cash investments.
The Explorer fund was initially launched in 1967 with Boston-based group Granahan appointed as subadvisors in 1998 and Kalmar in 2005.
The investment objective and expense ratios are not expected to change.
Vanguard chief executive, Bill McNabb, said: ‘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.’
ClearBridge’s investment approach focuses on identifying companies that possess a capital allocation discipline aimed at fuelling sustainable growth.
This is the second change Vanguard has made to the Explorer fund’s subadvisor roster in less than six months after dropping Chartwell Investment Partners from the fund in December.
Chartwell oversaw 7% the Explorer fund’s assets and was also dropped from the $.41 billion Vanguard Mid-Cap Growth fund.
RS Investments, subsidiary of Victory Capital, was appointed in place of Chartwell to run 50% of the mid-cap growth fund.
Vanguard manages more than $4 trillion in global assets, as of February 28 2017.