New York-based Donald Smith & Co. has been added as a subadvisor to Vanguard Group's $2.9 billion Selected Value Fund.

The new firm joins Barrow, Hanley, Mewhinney & Strauss, a Dallas, Texas-based value manager with approximately $40 billion in assets.

Donald G. Smith, chief investment officer, and Richard L. Greenberg, senior portfolio manager will manage their firm's portion of the fund.

The firm will begin managing a "modest portion" of the fund, over time managing a larger portion, said John Demming, Vanguard spokesman.

Typically, to minimize tax consequences, Vanguard directs existing cash and new cash flows to new subadvisors, added Demming.  

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