Gyroscopic Investing

KIPLINGER’S: Why a newsletter only about Vanguard funds?

WIENER: In the early years, there was no such thing as a mutual fund supermarket. So you were either a Fidelity investor or a T. Rowe Price investor or a Vanguard investor or an investor with another firm. I had begun to invest money for my kids at Vanguard because I felt it offered funds run by some managers I wanted to put my money with. Vanguard had the Primecap Management guys running Vanguard Primecap (symbol VPMCX), which is now closed to new investors. It had a team from Wellington Management running Vanguard Health Care (VGHCX). Jim Barrow was running Vanguard Windsor II (VWNFX)—without a lot of the managers who have been added since, mucking up his perform­ance. So you had really good managers running some excellent funds.
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Does Vanguard shortchange its active managers? Yes. How many times do you hear Vanguard say, “We have these great active managers”? Ed Owens, the longtime manager of Health Care, who retired in 2012, had probably the single best track record in the entire industry. And Vanguard barely mentioned his name. Meanwhile, look up the “select” funds on Vanguard’s Web site. This really gets me. It says, “Build your portfolio with a few of our well-established, broadly diversified low-cost funds, selected by our Port­folio Review Department.” Vanguard selects three index funds and three actively managed funds: Explorer, Morgan Growth and Windsor II. C’mon, guys. That’s just embarrassing.

http://www.kiplinger.com/article/invest ... funds.html