Vanguard Fires AllianceBernstein

by Dan Wiener | August 2, 2012 12:58 pm

AllianceBernstein is out. Period.

In a series of filings with the SEC, Vanguard revealed today that it has fired AllianceBernstein from portfolio management positions on Global Equity (MUTF:VHGEX[1]), International Value (MUTF:VTRIX[2]) and Windsor (MUTF:VWNDX[3]).

While Vanguard never breaks out the performance of individual managers on its multi-managed funds, I’ve long had access to data on AB’s performance, and frankly, it hasn’t been so hot. Add to that a series of management changes and continuing questions about the firm’s stability, and it’s no wonder Vanguard finally took what is surely the right course of action.

Over at Global Equity, AllianceBernstein’s portion of the fund will be absorbed by remaining manager Baillie Gifford. Acadian and Marathon remain on the fund. In addition, Jeremy Hosking, one of the troika from original Global Equity manager Marathon Asset Management, will retire in mid-December.

At International Value, a new team from ARGA Investment Management — a new manager to the Vanguard fold — will replace AllianceBernstein on about 21% of assets.

Over at Windsor, Pzena Asset Management, which runs an overseas value fund for Vanguard as well as a portion of its new Emerging Markets Select Stock (MUTF:VMMSX[4]), will be taking over the assets assigned to AllianceBernstein. Pzena has a terrific long-term track record, but its performance on the overseas U.S. Fundamental Value has been anything but stellar, gaining just 0.1% since its May 2005 inception compared to the 3.3% annualized gain for the Russell 1000 Value index over the same period.

As of this writing, Vanguard has not issued any press releases on AllianceBernstein’s ouster.

Endnotes:
  1. VHGEX: http://studio-5.financialcontent.com/investplace/quote?Symbol=VHGEX
  2. VTRIX: http://studio-5.financialcontent.com/investplace/quote?Symbol=VTRIX
  3. VWNDX: http://studio-5.financialcontent.com/investplace/quote?Symbol=VWNDX
  4. VMMSX: http://studio-5.financialcontent.com/investplace/quote?Symbol=VMMSX

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