Vanguard to liquidate convertible securities fund in late March

By Wendy Van Sickle

Columbus, Ohio, Jan. 3 – Vanguard Group Inc. announced the $962.5 million Vanguard Convertible Securities Fund has been closed to new investors in advance of a planned liquidation in late March.

Fund shareholders may exchange into another Vanguard fund or redeem their shares prior to the liquidation date, at which time the fund's assets will be sold and the proceeds distributed, Vanguard said in a press release on Thursday.

“After careful review of the fund's investment rationale and client usage, Vanguard determined that investors could achieve similar risk-return exposures and long-term returns by investing in a diversified, balanced portfolio of global stock and bond funds,” the release stated.

Vanguard introduced the fund in 1986, primarily for pension funds, endowments, and corporate and non-profit retirement plans. The fund has failed to gain broad acceptance among these investors and is one of the smallest offerings in terms of net assets among Vanguard's stock and balanced offerings, Vanguard reported.

The liquidation is a result of an ongoing and comprehensive review of Vanguard’s global fund and ETF line-up.

"We are adding new products that have investment merit and investor demand, changing advisers and mandates to improve investor outcomes and eliminating funds that lack a distinct role or strong investment case," Matthew Brancato, head of Vanguard's portfolio review department, said in the release.

Fund adviser Oaktree Capital Management will oversee the liquidation and continue to manage portions of the U.S.-domiciled Vanguard Emerging Markets Select Stock Fund and the U.K.-domiciled Vanguard Global Emerging Markets Fund.

Vanguard is a Valley Forge, Pa.-based investment management company and provider of company-sponsored retirement plan services.

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