Vanguard [profile] just merged away a Mellon-managed mutual fund. The Philadelphia Inquirer reports that on Friday the Malvern, Pennsylvania-based low-cost mutual fund giant folded its $8.6-billion Asset Allocation Fund into its Balanced Index Fund.

The Asset Allocation Fund was founded in 1988 and was managed by Mellon Capital Management Corp.

Vanguard first proposed the merger in the fall through an SEC filing indicating the mutual fund firm's plans to convert a group of actively managed funds to passive index funds.

Dan Wiener, editor of the Independent Adviser for Vanguard Investors newsletter, contrasted the Asset Allocation Fund with a more-famous, actively-managed Vanguard offering, the Wellington Fund. Wellington has set new highs after recovering from the financial crisis, but Asset Allocation hasn't.

"Vanguard simply went with the better horse," Wiener wrote. 

Edited by: HFD


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