Is it a mend or is it the trend?

One year ago, Vanguard fired Mellon Capital Management from Vanguard Growth and Income Fund (VQNPX) and replaced them with a trio of managers — Vanguard’s own quant group, Los Angeles Capital Management and D.E. Shaw Investment Management. The three split the $3.7 billion fund evenly and went about their individual computer-driven approaches.

I’d say the jury remains out on just how well the change has worked. Yes, the portfolio is much more broadly diversified, now holding 779 stocks versus just 100 under the old management regime. While the fund looks to be holding larger stocks, overall, top holdings remain pretty similar, with Apple (AAPL) leading the portfolio, followed by the same cast of companies you’d find in Vanguard 500 Index Fund (VFINX), which tracks the index bogey Growth and Income is measured against.

As you can readily see in the chart that shows the relative performance of Growth and Income against 500 Index below, since the management change a year ago the fund has outperformed slightly (up 31.3% for the 12 months through Sept. compared to 30.0% for 500 Index). But the longer picture shows that Growth and Income was beginning to get its sea legs and reassert itself almost two years ago, well before Vanguard mutinied and exchanged the prior captain for some new ones.

Investors aren’t buying it — figuratively or monetarily. Cash continues to flow out of the fund at a steady pace. Only market action has lifted assets to a recent $4.3 billion.

At the moment, there’s nothing about either the way the fund is being managed or about performance that leads me to recommend it. I’m sure there will be times when the fund outperforms, but with three different cooks in this kitchen I’ll leave someone else to take a taste. And, by the way, not a single Vanguard director, including Chairman Bill McNabb, owns shares in Growth and Income. Disclosure of the managers’ stakes has not been updated since they took over, but I’d wager they aren’t big investors either.