Due to prolonged weak results, the Vanguard Group announced that David Fassnacht has been replaced as the portfolio manager of the $19.2 billion Windsor Fund (VWNDX) and the $490 million Vanguard Capital Value Fund (VCVLX), Dow Jones reports.
Control of the underperforming value funds has been designated to 49-year-old James Mordy, who will oversee the Windsor fund, and 47-year-old Peter Higgins, who will manage the Capital Value fund. Both men are senior vice presidents and partners at Wellington Management, a firm that has managed the Windsor fund since its inception in 1958.
Performance is never the only reason that we choose to hire or retain [but] after careful consideration of these factors and in talking with Wellington, we concluded that the funds would be best served with a change in portfolio manger within Wellington, said Linda Wolohan, a spokeswoman for Vanguard.
Through June 20th, Vanguard Windsor and Capital Value have respectively declined 13.8% and 15.6% this year. According to Morningstar, Vanguards large-cap value rivals are off roughly 10.4% on average.
In a 2007 letter to shareholders, Vanguard Chairman and Chief Executive John Brennan acknowledged less than stellar results. He wrote, Although the [Capital Value] fund enjoyed a strong gain in the 2007 fiscal year, its average annual return since its late-2001 inception has not kept pace with results for its benchmark index or peer group.
The bottom line is that the funds have been doing pretty terribly, said Daniel Wiener, editor of the Independent Advisor for Vanguard Investors newsletter.