Vanguard

NEWS!

VALLEY FORGE, Pa., July 27, 2018 /PRNewswire/ -- Vanguard today announced changes to two actively managed equity funds. The $2.3 billion 

Vanguard Precious Metals and Mining Fund (VGPMX) will be renamed to Vanguard Global Capital Cycles Fund 

as part of a restructuring intended to broaden the fund's mandate and diversify its portfolio. Wellington Management Company LLP will manage the fund effective today. Additionally, Baillie Gifford Overseas Ltd. has been added to the advisory team of the $641 million Vanguard Emerging Markets Select Stock Fund (VMMSX). M&G Investment Management Limited will no longer serve in an advisory capacity for either fund. 

The restructured Global Capital Cycles Fund is intended for investors with a long-term time horizon who 

seek a complement to their core global equity allocation that exhibits lower correlations to the broad equity markets. 

The new strategy and name are expected to become effective in late September 2018. 

In managing the fund, Wellington Management will adhere to a capital cycles strategy as its primary investment approach, seeking to capture opportunities in commodity-oriented industries, such as the materials and natural resource sectors, which follow cyclical patterns. The strategy will also focus on companies that own irreplaceable or scarce infrastructure assets primarily in telecommunications and utilities. While the fund will maintain meaningful exposure to precious metals and mining stocks, the capital cycles strategy encompasses a broader opportunity set from which to identify return potential.

DYI:  As time rolls on I’m going to look very closely at this redo of Vanguard’s precious metal and mining companies fund [into the Vanguard Global Capital Cycles Fund] to see if the changes are still within DYI’s parameter of an uncorrelated asset.  Obvious if it passes I’ll maintain pure Vanguard 4 asset model.  However, if it does not then I’ll switch to the Tocqueville Gold Fund.

One does have to wonder if Vanguard throwing in the towel on a 100% precious metals and mining fund is a signal that precious metals are about to take off to the upside?  I’m certain there was talk about just that at the boardroom level.  Vanguard does NOT have a reputation of opening and closing funds as so many other fund groups do so notoriously to hide poor performing funds.

 

Be as that may be I’ll wait until I have an annual or semi annual report of the Global Capital Cycles Fund to pass judgment.

DYI