Vanguard has launched the Vanguard International Core Stock Fund (VWICX), expanding its actively managed roster of more than 70 mutual funds and ETFs.
The new fund, which will be managed by Wellington Management Company LLP (Wellington Management), represents Vanguard’s continued effort to complement its index products with industry-leading active products, including three additional active offerings introduced over the past year: Vanguard Global ESG Select Stock Fund, Vanguard Commodity Strategy Fund, and Vanguard Global Credit Bond Fund.
Vanguard International Core Stock Fund is designed to be a core holding, offering an active portfolio of developed and emerging market equities that is designed to outperform across regions, styles, and sectors. Vanguard advocates for investing in international stocks and bonds for the diversification and return potential, but its research indicates that many U.S. investors exhibit ‘home bias’ and have inadequate exposure to international securities.
Founded in 1928 and managing more than USD1 trillion in assets, Wellington Management is Vanguard’s oldest and largest external advisory partner. The firm will seek to add value through a multi-disciplinary investment approach that draws investment ideas from the full breadth and depth of Wellington Management’s global resources, specifically the firm’s quantitative research teams, macro-economic research, global industry analyst research, other portfolio management teams, and ESG analysis.
Wellington Management seeks to build an “all-weather” portfolio that prioritises stock specific exposure, limiting the portfolio’s style, factor, region, and industry risk exposure through a sophisticated and centralised risk management approach. The firm’s approach targets an opportunity set of 350-400 companies, of which the fund will seek to hold approximately 60-100 large- and mid-cap stocks based on its assessment of each company’s management team, capital allocation, and competitive advantage. The approach is characterised as opportunistic, and does not emphasise any particular style or factor. The fund will be differentiated and benefit from this unique, multi-disciplined approach that incorporates the best investment ideas at Wellington Management and is designed to reduce downside risk, improve upside capture, and minimise unintended exposures.
“Mr Abrams’ track record, leadership, and experience allow him to bring deep research capabilities to bear across many different parts of Wellington Management,” says Matt Brancato, head of Vanguard’s Portfolio Review Department. “Offering this multi-disciplinary approach as a core building block provides investors with the opportunity to build diversified exposure, along with the potential for outperformance.”
Vanguard International Core Stock Fund will be offered in Admiral Shares, with an estimated expense ratio of 0.35 per cent, and Investor Shares, with an estimated expense ratio of 0.45 per cent, both considerably lower than the asset-weighted average expense ratio of 0.75 per cent for the industry’s large-blend fund category1.
