The Vanguard Group has decided to adopt a multi-manager advisory structure for the $2.9 billion Vanguard Selected Value Fund.

The nation's second largest mutual fund complex will add the services of the New York investment firm Donald Smith & Co., a specialist in value equity accounts, to the mid-cap value fund's current management advisory team from Barrow, Hanley, Mewhinney & Strauss.

"We expect that the fund will benefit from distinctive, yet complementary investment approaches," said Jack Brennan, Chairman and CEO, Vanguard, in a statement.

The change isn't expected to significantly impact the fund's comparatively low, 0.60% expense ratio, Vanguard officials said. To minimize tax impact to shareholders, officials said a "modest portion" of the fund's current cash position would be directed to Donald Smith and a majority of fresh cash inflows would be directed to the new adviser as well. The fund requires a $25,000 minimum initial investment.

A 22-year-old firm that employs a strict bottom-up approach investing in stocks of out-of-favor companies selling at discounts to book value, Donald Smith currently has more than $2.5 billion in assets under management. Company CIO Donald G. Smith and Senior Portfolio Manager Richard L. Greenberg will manage the portfolio.

So far this year, the Vanguard Selected Value Fund has posted a 4.98% return. Its three-year trailing return mark is 11.23% and 14.21% for the five-year period, according to fund tracker Morningstar.

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