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M&G loses $3bn Vanguard mandates as Baillie Gifford gains

M&G loses $3bn Vanguard mandates as Baillie Gifford gains

US giant Vanguard has dropped M&G Investment Management from two of its active mandates.

The Valley Forge, Pennsylvania-based giant has fired M&G from the $2.3 billion (£1.75 billion) Vanguard Precious Metals and Mining fund in favour of Wellington Investment Management.

The fund, which has been been managed by M&G’s Jamie Horvat, will now be managed by Wellington’s  Keith White.

Vanguard will also rename the fund as the Vanguard Global Capital Cycles fund as part of a restructuring effort to broaden the its mandate and diversify its portfolio.

Vanguard said the revamped strategy, which will take effect in late September, is meant for investors who wish to complement their core global equity allocation with a strategy that exhibits lower correlations to the broad equity markets. However, the change will also see the fund’s expense ratio to increase slightly to 0.37%, up from 0.36%.

Launched in 1984, the fund has returned 15.9% over the past three years until the end of June and ranks 14 out of 19 Precious Metals Equity Funds tracked by Citywire.

Meanwhile, Baillie Gifford has replaced M&G on the Vanguard Emerging Markets Select Stock fund.

The Edinburgh-based money manager joins Oaktree Capital Management, Wellington and Pzena Investment Management on the $641 million fund.

Baillie Gifford’s portion of the fund will be managed by Citywire A-rated Richard Sneller, head of emerging markets equity strategy, along with investment managers Andrew Stobart and Citywire AA-rated Mike Gush.

Following the subadvisory change, Baillie Gifford will manage 20% of the fund’s assets, Pzena and Oaktree both at 25% each, Wellington 27%, with the remainder in cash.

Launched in 2011, the Vanguard Emerging Markets Select Stock fund has returned 17.7% over the past three years until the end of June and ranks 97 out of 200 Emerging Markets Funds tracked by Citywire.

In 2016, Vanguard dropped M&G as a subadvisor on the $21 billion Vanguard International Growth fund and the Vanguard Variable Insurance fund - international portfolio.

A Vanguard spokeswoman confirmed that M& G is no longer a subadvisor on any of the Vanguard funds.  

The news comes after M&G, which is set to split from its parent Prudential, lost its chief executive Anne Richards to Fidelity International last week. 

 

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