After 10 years the Vanguard Windsor Fund is reopening. The fund will also be adopting a multi-advisor approach by tapping Sanford Bernstein to co-advise the fund with Wellington Management. The changes will go into effect June 1, 1999. Windsor has turned in poor performance the past two years, returning %0.81 last year and ranking in the bottom 5 percent of Large Value funds, according to Morningstar.

Although the fund company spins the announcement as part of an annual review of all Vanguard funds, the Windsor fund has had net outflows of approximately $4.4 billion in the 14 months prior to Feb. 28, 1999, according to MutualFundWire.com's calculations. These outflows have been accelerating with almost $1.2 billion of this amount leaving in the first two months of this year.

A Vanguard spokesperson would not comment on whether cash outflows were a reason for the changes at the fund. Instead he told the MutualFundWire.com that by adding an additional advisor to the fund, Vanguard has increased the capacity of the fund and that is the reason for the re-opening.

The recent hard times at Windsor underline the growing fickleness of retail investors who rely more than ever on recent performance to gauge the worth of their investments. It also shows that even a fund company with as strong a consumer reputation as Vanguard will not be spared if its performance slips -- justified or not.

"While Windsor Fund's emphasis on deep value stocks has been out of favor recently, we believe it is a sound long-term investment strategy and remain committed to the approach," said Vanguard chairman and ceo John J. Brennan, in a prepared statement. "What's more, our confidence in portfolio manager Charles T. Freeman and his team at Wellington Management Company remains firm."

In what may be a move to spice up the fund's performance, Vanguard will add an additional advisor, Sanford C. Bernstein & Co. According to Vanguard, this move is being made to diversify the fund, in both holdings and "investment thinking." Bernstein & Co. is a high profile value-oriented investment organization headquartered in New York City. Marilyn G. Fedak, chief investment officer for U.S. Equity, and Steven Pisarkiewicz, senior portfolio manager, will serve as co-managers for Bernstein.

Under the new advisory structure, Wellington Management Company, LLP, will continue to be lead advisor, managing the majority of the Fund's $16.5 billion in assets, which have declined from over $20 billion at the end of 1997 and over $18 billion at the end of 1998.

Vanguard is planning to reopen the Fund, which has been closed since May 1989, to new accounts on June 1, 1999. The $25,000 annual limit on additional investments from current shareholders will also be removed at that time. Upon reopening, Windsor Fund will have a minimum initial investment of $3,000 ($1,000 for IRAs).

In a separate announcement, Vanguard has appointed James P. Barrow to the role of portfolio manager of the Selected Value Fund, succeeding James S. McClure, who had been the Fund's manager since its inception in 1996. Both Barrow and McClure are with Barrow, Hanley, Mewhinney & Strauss, Inc. of Dallas, Texas, the lead adviser to Vanguard Windsor II Fund. Mr. Barrow will continue as lead manager of Windsor II. 

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