Quantcast
The MFWire
Manage Email Alerts | Sponsorships | About MFWire | Who We Are

Subscribe to MFWire.com's News Alerts [click]

Rating:Vanguard Reads Between the Lines Not Rated 0.0 Email Routing List Email & Route  Print Print
Friday, September 24, 2004

Vanguard Reads Between the Lines

Reported by Theresa Sim

First, Vanguard closed two of its Primecap-subadvised funds to new investors. Months later, Primecap filed for three of its own funds. Fast forward to the present: Vanguard has decided to launch a new Primecap-subadvised fund. Did Vanguard read between the lines?

At the time of Primecap's proprietary fund filing in July, Brian Mattes, Vanguard spokesman, told the MFWire that Primecap had notified Vanguard of its plans to launch its own funds. Mattes also commented that Vanguard has successful subadvisory relationships with managers who also have their own funds (such as Wellington Management and Turner Investment Partners). Mattes said that he believed the Odyssey funds would be intermediary-sold.

But Primecap's July SEC filings for its Odyssey line of funds were suspiciously devoid of information, such as how the Los Angeles-based money manager planned on distributing the funds and the transfer agent for the funds.

That Primecap filed to open its own funds just months after Vanguard closed its two Primecap-subadvised funds prompted suspicion in the minds of many, including Dan Wiener, editor of The Independent Advisor for Vanguard Investors newsletter. After all, the Odyssey funds, if launched, would bring in more money (to be managed in very similar styles as the Vanguard funds) -- a move directly at odds with Vanguard closing funds for fear of asset overload.

In his Friday newsletter, Wiener writes that he suspects Primecap "forced Vanguard's hand" and did not intend to seriously launch its own funds. If that is the case, Vanguard's move can be seen as a method to placate the still-hungry Primecap stomach. Or perhaps a petulant Primecap managed to negotiate another Primecap-subadvised fund and launch its own fund line -- essentially having its cake and eating it, too? Either way, it means more money will be flowing to Primecap.

The official reason for launching the fund is, according to Vanguard Chairman John Brennan: “Vanguard has had a valued relationship with the PRIMECAP team for the past two decades…[t]he addition of Vanguard PRIMECAP Core Fund will broaden our array of actively managed equity funds and offer investors a core option that utilizes PRIMECAP Management’s research-driven investment approach."

Meanwhile, a search for filings for Primecap's Odyssey funds turned up nothing, besides its original July 1 filing. Only time will tell whether the Odyssey funds will become an actuality.

As for the new Vanguard Primecap Core Fund, Primecap managers will invest in domestic stocks, with up to 20 percent of the portfolio in foreign stocks. The fund's minimum investment will be $10,000; Vanguard and Primecap had not yet disclosed the expense ratio of the fund. 

Stay ahead of the news ... Sign up for our email alerts now
CLICK HERE

0.0
 Do You Recommend This Story?



GO TO: MFWire
Return to Top
 News Archives
2025: Q4Q3Q2Q1
2024: Q4Q3Q2Q1
2023: Q4Q3Q2Q1
2022: Q4Q3Q2Q1
2021: Q4Q3Q2Q1
2020: Q4Q3Q2Q1
2019: Q4Q3Q2Q1
2018: Q4Q3Q2Q1
2017: Q4Q3Q2Q1
2016: Q4Q3Q2Q1
2015: Q4Q3Q2Q1
2014: Q4Q3Q2Q1
2013: Q4Q3Q2Q1
2012: Q4Q3Q2Q1
2011: Q4Q3Q2Q1
2010: Q4Q3Q2Q1
2009: Q4Q3Q2Q1
2008: Q4Q3Q2Q1
2007: Q4Q3Q2Q1
2006: Q4Q3Q2Q1
2005: Q4Q3Q2Q1
2004: Q4Q3Q2Q1
2003: Q4Q3Q2Q1
2002: Q4Q3Q2Q1
 Subscribe via RSS:
Raw XML
Add to My Yahoo!
follow us in feedly


  1. MFDF webinar - Latest in Closed-End Funds Litigations, September 23
  2. WE PNW - Mentorship Program Virtual Session: Building Trust to Win New Business and Influence Others, September 23
  3. MFDF webinar - Fixed Income Insights: Navigating Market Trends & Opportunities, September 24
  4. IMEA Portfolio Construction Roundtable, September 24
  5. Nicsa webinar - Utilizing AI to Enhance Distribution & Advisor Engagement, September 24
  6. IMEA Models Roundtable, September 25
  7. Expect Miracles Atlantic Coast Classic 2025, September 29
  8. MFDF webinar - Risk Management Essentials for RICs and Boards, September 29
  9. MFDF webinar - Diligent - Tools for Fund Board Book, October 1
  10. 10th annual Fuse Forum, October 8
  11. MFDF webinar - Essential Strategies in Board Oversight of Operational Risk Management, October 14
  12. MFDF webinar - Series Trust Funds - Effective Board Relationships with Advisers, October 15
  13. 2025 MMI Annual Conference, Oct 15-17
  14. Samfund Soiree Manhattan 2025, October 23
  15. Tiburon CEO Summit XLIX, Oct 27-29
  16. 2025 Sohn San Francisco Investment Conference, October 28
  17. Schwab Impact 2025, Nov 2-4
  18. UCITS & AIFMD for U.S. Managers 2025, Nov 4-5
  19. MFDF In Focus webinar - Audit Committee Chair, November 5
  20. 2025 Nicsa Asset & Wealth Management Summit, Nov 11-12
  21. MFDF webinar - Mutual Fund CCO Compensations: The MPI Annual Survey Update, November 13
  22. ALFI Roadshow to Houston, November 13
  23. MFDF 2026 Directors' Institute, January 26 - 28, 2026
  24. MFDF 2026 Fund Governance & Regulatory Insights Conference, March 5 - 6, 2026




©All rights reserved to InvestmentWires, Inc. 1997-2025
14 Wall Street | 20th Floor | New York, NY 10005 | P: 212-331-8968 | F: 212-331-8998
Privacy Policy :: Terms of Use