Each week, Morningstar.com publishes an article entitled “Fund Times,” which writes about fund managers that have been fired, quit, changed jobs, etc., among other things.
On January 22, 2009, the lead article was that Vanguard was replacing a subadvisor (manager) for 50% of one of their actively managed funds, Vanguard Growth Equity. In early 2008, they replaced the other subadvisor, who managed the other 50%.
With all the resources that Vanguard has, why would they be frequently changing the managers of this mutual fund? This once again shows how difficult it is to predict the future success of active fund/money managers. Even Vanguard could not do it. Vanguard selected a certain manager a few years ago (presumably after lots of research by many professionals), based on their past performance, then the performance fell below their respective benchmark for a period of time and Vanguard decided to make a change.
Our philosophy is rather than trying to pick and chase a fund manager that will consistently beat a respective benchmark (which is extremely hard to do), we build a portfolio to match the benchmark for each asset class. In the long run, academic data shows that this will be the winning strategy.