in Vanguard's International Value Fund will be welcoming a new advisor to the fund on the first of August. The Valley Forge fund firm said today that it has tapped Fort Lauderdale-based Hansberger Global International
(HGI) to advise the fund. HGI replaces Phillips & Drew
, a London-based unit of UBS.
The switch in advisors is a tough break for UBS which will lose nearly $1 billion in assets when the change goes into effect. Meanwhile, Vanguard will become the largest client for HGI which has $3 billion in assets under management and is run by Tom Hansberger
, former chairman, chief executive officer, and president of Templeton Worldwide, Inc.
The change was made after the Board of the $980 million fund made its regular review of the portfolio, according to a Vanguard spokesperson. He declined to say what other firm's were considered to act as the advisor or specifically why the change was made.
"The Fund's Board of Trustees considers numerous factors in the evaluation of current and prospective investment advisers, including a review of the investment process and philosophy; an analysis of absolute and relative investment performance; and an assessment of the management and research teams," said Vanguard Chairman and CEO John J. Brennan. "We determined after careful consideration that it is in the best interests of shareholders to retain a new adviser."
The change is not a surprise since the investment process at Phillips & Drew has recently changed as UBS reorganized and since the firm's investment performance has lagged its peers'.
In March, UBS Asset Management combined the investment management and research resources of Phillips & Drew and Brinson Partners in a move that it said was aimed at delivering "consistent investment and research capabilities to clients on a global basis through their respective brands." Both firms focused on institutional clients and follow value-driven investment policies.
Meanwhile, many of Brinson's clients are reevaluating their use of the firm in wake of its disappointing investment results in this challenging market for value-driven investors and the retirement of Gary Brinson from the business.
The funds' performance has also lagged. In 1999 the fund gained 21.8 percent, but badly lagged the 44.5 percent average gain in all international funds. So far this year the fund has performed better. It is up 4.2 percent through June 30 and leads the average international fund.
Hansberger told the MutualFundWire.com that he suspects his firm was chosen because of its value-driven, disciplined investment process. This is the first time that HGI has a portfolio for Vanguard. It currently acts as subadvisor to the Smith Barney Hansberger Global Value Fund and the Smith Barney Hansberger Global Value Fund.
HGI will use a team of portfolio managers including Ajit Dayal, Ronald Holt, and Aureole L.W. Foong.
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