Vanguard announced the $962.5 million Vanguard Convertible Securities Fund has been closed to new investors in advance of a planned liquidation in late March. Shareholders of the fund are being notified and have the opportunity to exchange into another Vanguard fund or redeem shares prior to the liquidation date, at which time the fund’s assets will be sold and the proceeds distributed.
After careful review of the fund's investment rationale and client usage, Vanguard determined investors could achieve similar risk-return exposures and long-term returns by investing in a diversified, balanced portfolio of global stock and bond funds.
Vanguard introduced the fund in 1986, primarily for pension funds, endowments, and corporate and non-profit retirement plans. The liquidation is a result of Vanguard’s ongoing and comprehensive review of its global fund and ETF line-up. The fund has not gained broad acceptance among these investors and remains one of the smallest offerings in terms of net assets among Vanguard's stock and balanced offerings.
“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,” says Matthew Brancato, head of Vanguard's portfolio review department, who noted that the company recently introduced two ESG ETFs and announced the merger of two equity funds.
Vanguard liquidated its Ohio Tax-Exempt Money Market Fund in 2017 and the U.K.-domiciled Ultra- Short-Term Bond Fund in 2018.
The fund’s 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.
