Vanguard expands index approach at select funds

[October 01, 2011]  BOSTON (AP) -- Vanguard is making changes at six mutual funds.

The nation's largest fund company said on Friday that five funds will begin exclusively employing a low-cost index investing approach, rather than relying partly on professional managers.

In addition, Vanguard's Growth & Income fund is replacing an outside manager in favor of a multi-manager approach.

The focus on an index strategy is being brought to Vanguard's four LifeStrategy funds. They use a blended strategy, with part of their assets invested in actively managed funds, and some in index funds that passively track market indexes. They'll now invest solely in index funds.

Vanguard also plans to merge its Vanguard Asset Allocation fund into its Balanced Index fund. That involves maintaining a constant 60 percent stocks-to-40 percent bonds balance, rather than making periodic shifts.

[Associated Press; By MARK JEWELL]

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