Vanguard Hires Firm to Help Run Growth Fund

Vanguard Group, the second-largest U.S. mutual fund company, hired William Blair & Co. to help run the $7.3-billion U.S. Growth Fund and bolster its performance.

About 25% to 30% of U.S. Growth will be managed by William Blair, and the rest will be overseen by the fund’s current manager, Alliance Capital Management Holding, Vanguard spokeswoman Rebecca Cohen said Monday.

The two firms also will share responsibility for the $379-million variable annuity version of the fund.

Alliance has run U.S. Growth for almost three years, during which the fund’s returns lagged behind those of 91% of similar portfolios, according to Bloomberg News data.

Vanguard, based in Valley Forge, Pa., said using more than one manager increases a fund’s diversification and its performance. Twelve of the firm’s 30 funds that aren’t based on an index use multiple managers.

Vanguard manages $730 billion in U.S. mutual fund assets.

Chicago-based William Blair said it would gain about $2 billion in managed assets from the U.S. Growth funds. The company had $17.3 billion under management on Dec. 31.