Which Vanguard Funds Hold Alibaba?

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It’s always interesting to peer into the portfolios of some of Vanguard’s most prominent managers or into some of Vanguard’s funds to see where our money is going. For instance, you may be wondering which Vanguard funds picked up Alibaba (BABA) shares in September when Alibaba went public in one of the most heralded initial public offerings of the decade.

alibaba stock ipo baba stockWell, you could find a few BABA shares in Vanguard Capital Opportunity Fund Investor Shares (VHCOX), though the holdings there are less than fractional. Ditto for Morgan Growth Fund Investor Shares (VMRGX) has some shares, adding up to about 0.8% of the fund’s assets, and at least one of the five management teams at Vanguard U.S. Growth Fund Investor Shares (VWUSX) did some buying. From SEC filings, it appears that this was probably the Baillie Gifford team, which took a substantial holding in Alibaba.

You may recall that Baillie Gifford & Co. is a big fan of internet giants like China’s Baidu Inc (ADR) (BIDU), as well as Amazon.com, Inc. (AMZN), Facebook Inc (FB) and Google Inc (GOOG). Unfortunately, for all the buying across its various investment accounts (Baillie Gifford owned over $10 billion in BABA at the end of Q3), the Alibaba stake in Vanguard U.S. Growth amounts to just $30 million or maybe 0.5% of assets. This is less than the exposure in Morgan Growth and a nearly irrelevant position when it comes to performance, pointing out once again the futility of owning a fund with five management teams and 10 portfolio managers.

For the year, Vanguard U.S. Growth, with an 11.8% gain through last Thursday, is again lagging  Vanguard Growth Index Fund Investor Shares‘ (VIGRX) 12.4% rise. Morgan Growth, up 10%, isn’t doing any better with its nine portfolio managers. Vanguard has not done anyone any favors with these messy amalgams of managers.

Vanguard loves to argue that the multi-manager concept works, but I would beg to differ. I’ll keep my focus on single-manager funds and single-focus firms as well as funds that haven’t seemed to suffer horribly under multi-manager structures.

Find out which Vanguard funds — and managers — I recommend when you sign up for The Independent Adviser for Vanguard Investors today.


Article printed from InvestorPlace Media, https://investorplace.com/2014/11/vanguard-funds-hold-alibaba/.

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