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Vanguard to Liquidate Billion-Dollar Fund
When is a billion dollars not enough? In Vanguard’s case, it’s when a $962-million fund “has not gained broad acceptance among targeted investors.” On Jan. 3, the Malvern, Pa. fund titan closed its 32-year-old Vanguard Convertible Securities fund to new investors and plans to liquidate all assets in March. (Note that this is not a fund we currently recommend to Adviser Investments clients.) The move will close the book on the strategy that helped turn value investor Howard Marks and his Oaktree Capital Management into a household name in the investment management world. Oaktree has been the fund’s sole adviser since 1996, and it remains a well-respected firm. The fund’s closure came as a surprise to many. After all, it has a competitive record compared to its Morningstar convertible bond peer group. First, we’ll address why Vanguard said it was closing…