Vanguard International Manager Decamps October 28, 2020 Adviser Fund Update Print In This Issue:Vanguard International Manager DecampsWatch Our Quarterly Webinar!Podcast: All About Roth IRAsAdviser Investments’ Market TakeawaysVanguard International Manager Decamps Vanguard is making some alterations. We recently learned they’ve decommissioned the namesake 18th-century British naval ship—the HMS Vanguard—from their logo after nearly four decades. Now it’s time for one of their international fund managers to set sail. After a busy summer of managerial shakeups, Vanguard is showing no sign of slowing down. On October 12, the fund giant announced that it had replaced Edinburgh Partners with Sprucegrove Investment Management on its $9.5-billion International Value fund. Sprucegrove, the Toronto-based investment manager, is now co-managing the fund with Lazard Asset Management and ARGA Investment Management. Vanguard didn’t provide much insight into the thinking behind the decision. While noting in a press release that Sprucegrove would be managing assets “previously overseen by Edinburgh Partners,” nothing additional was said about Edinburgh. And there was no reference to its star manager, Sandy Naim, who was added to the portfolio management team (with some fanfare) in May 2008. What’s Sprucegrove bringing to the table? Vanguard has been tight-lipped, but one thing to note is that the asset manager takes its ESG (environmental, social and governance) issues seriously. Like Vanguard, Sprucegrove has signed the U.N.’s Principles for Responsible Investment. Regardless of whether that helps performance (and the jury’s still out on that one), it certainly helps with marketing. That familiarity with ESG might be a nice selling point, but when all is said and done, it’s performance that Vanguard is looking for—and they need it. Since hiring Edinburgh in May 2008, International Value has been the single worst-performing active foreign or global fund at Vanguard by a wide margin. And while you can’t pin the blame entirely on one manager when three different teams are involved (and Vanguard chopped and changed managers in 2012 as well as 2013), something has not gone right at International Value. Vanguard International Value Has Lagged Over Time wdt_ID Vanguard Fund Return May 2008–Sept 2020 5 International Growth 138.4 6 Global Equity 104.6 7 International Explorer 62.1 8 Pacific Index 39.9 9 Developed Market Index 26.9 10 World ex.-U.S. Index 24.1 11 Total International Stock Index 21.6 12 European Index 17.1 15 Emerging Markets Stock Index 14.6 16 International Value 12.1 Sources: Morningstar, Adviser Investments. Even before Edinburgh came on board, International Value shareholders were suffering. It’s clear that Vanguard hasn’t found the right mix of managers—and we’re not convinced that Sprucegrove will bring anything dramatically different to the fund. We’ll be watching. Watch Our Fourth-Quarter Webinar! Tune in to Adviser Investments’ Fourth-Quarter Webinar, Looking Beyond the Election to the Recovery’s Future. Click here for a link to the replay! This interactive, wide-ranging discussion includes our thinking on the markets and economy as they relate to the pandemic and elections. You’ll hear from Chairman Dan Wiener and Director of Research Jeff DeMaso, and have your questions answered by Chief Investment Officer Jim Lowell, along with other members of our investment team. We hope you enjoy the presentation, and please don’t hesitate to contact us with any questions or topics you’d like us to follow up on. Podcast: All About Roth IRAs The tax advantages associated with Roth IRAs are well-known. But should contributing to one be part of your financial plan? In this episode of The Adviser You Can Talk To Podcast, our financial planning specialists Andrew Busa and Rick Winters provide an in-depth explanation of the uses and benefits of the Roth IRA, including: The requirements and tax advantages Why to open a Roth early in your career The so-called “backdoor” Roth conversion—what it is and when to do it The Roth’s role in your legacy planning Curious about whether converting from a traditional IRA to a Roth is right for you? Listen now to learn how you can deploy Roth IRAs for maximum benefit! Click here to listen now. Or, click here for our free special report, Converting to a Roth IRA. Adviser Investments’ Market Takeaways Calm and clarity have been sorely lacking when it comes to market news recently—that’s why we’re providing Today’s Market Takeaways, short videos in which a member of our investment team analyzes what the market is telling us. Recently, Research Analyst Liz Laprade spoke about potential antitrust implications for the FAANG stocks (Facebook, Apple, Amazon, Netflix and Google), and Vice President Steve Johnson discussed the case for economic optimism going into next year. About Adviser Investments Adviser Investments is a full service wealth management firm, offering investment management, financial and tax planning, managed individual bond portfolios, and 401(k) advisory services. We’ve been helping individuals, trusts, institutions and foundations since 1994, and have more than 3,500 clients across the country and over $6 billion in assets under management. Our portfolios encompass actively managed funds, ETFs, socially responsible investments and tactical asset allocation strategies, with particular expertise in Fidelity and Vanguard mutual funds. We take pride in being The Adviser You Can Talk To. Our minimum account size is $350,000. 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