Vanguard Announces Advisory Changes for Vanguard Mid-Cap Growth Fund

Rhea-AI Summary

Vanguard Mid-Cap Growth Fund (VMGRX) announced significant changes to its investment advisory arrangements. Tremblant Capital will become the sole advisor, replacing current managers Frontier Capital Management and Wellington Management Company. The fund's expense ratio will increase from 0.33% to 0.39%, though Tremblant Capital will provide a one-year fee waiver of five basis points, resulting in just a one basis point increase (0.34%) in the first year.

The fund will be managed by Tremblant's experienced team, led by Brett Barakett (Founder, Chairman, and Co-CIO) and Michael Cling (Co-CIO). The team employs a long-term, research-driven approach focusing on identifying businesses undergoing "consequential change" that could lead to better long-term free cash flow generation.

Positive

• Fund will remain in the lowest-cost quartile among peers despite fee increase
• New advisor Tremblant Capital offers one-year fee waiver to minimize cost impact
• Experienced management team with research-driven, long-term growth approach

Negative

• Expense ratio will increase from 0.33% to 0.39% after the first year
• Complete replacement of existing management teams may lead to strategy shifts

Insights

Investment Fund Analyst

Vanguard's Mid-Cap Growth Fund undergoes significant management change to Tremblant Capital with slight fee increase, potentially altering investment approach.

This management restructuring for Vanguard's Mid-Cap Growth Fund (VMGRX) represents a complete advisor overhaul, replacing both existing managers with Tremblant Capital as the sole advisor. The fund's expense ratio will increase from 0.33% to 0.39%, though a one-year fee waiver will initially limit this increase to just one basis point (0.34%).

The shift to Tremblant Capital introduces a specific investment philosophy focused on identifying businesses undergoing "consequential change" - catalytic shifts that could drive better long-term free cash flow generation than market expectations. This represents a potentially meaningful strategy adjustment that current investors should note.

Tremblant's leadership brings substantial experience - founder Brett Barakett has 29 years of investment management experience, while co-CIO Michael Cling contributes 27 years. This advisor change marks Tremblant's first partnership with Vanguard, indicating Vanguard's confidence in their approach after thorough due diligence.

While the expense ratio will remain in the lowest-cost quartile among peers, the 18% fee increase (post-waiver) is notable for a Vanguard product. The fund's board, with its majority of independent trustees, has determined this change serves shareholders' best interests, suggesting they believe Tremblant's approach may deliver improved performance that justifies the higher fee structure.

VALLEY FORGE, Pa., Sept. 10, 2025 /PRNewswire/ -- Vanguard today announced changes to the investment advisory arrangements of Vanguard Mid-Cap Growth Fund (VMGRX). Tremblant Capital will be added as the sole advisor to the fund, and existing managers, Frontier Capital Management Co., LLC and Wellington Management Company LLP, will be removed.

Vanguard expects the expense ratio to increase from 0.33% to 0.39% as a result of the change in advisory arrangements. However, Tremblant Capital will provide a one-year fee waiver of five basis points for the fund, which is expected to result in an expense ratio increase of only one basis point in the first year (0.34%). The fund will continue to be in the lowest-cost quartile of its peer group.

Tremblant Capital is a global equity investment firm founded in 2001 by Brett Barakett. Mr. Barakett leads an experienced investment team that employs a long-term, research-driven, growth-oriented approach. The team seeks to identify attractively valued businesses undergoing "consequential change." These are industry- or company-specific shifts that serve as catalysts for a company's growth and can lead to better long-term free cash flow generation than the market anticipates.

The portfolio management team will be led by:

Brett Barakett, Founder, Chairman, and Co-CIO of Tremblant Capital. He has worked in investment management since 1996 and founded Tremblant Capital in 2001. He holds an HBA from Western University (Ivey) and an MBA from Harvard University.

Michael Cling, Co-CIO of Tremblant Capital. He has worked in investment management since 1998 and has been with Tremblant Capital since 2005. He holds a BS from Georgetown University.

Vanguard's manager research team conducts ongoing reviews of current and prospective investment advisors, looking beyond short-term performance to focus on the drivers of long-term success for investors. The fund's investment committee, which is comprised of a majority of independent trustees of the fund's board of trustees, believes that the addition of Tremblant will serve the best interests of current and future shareholders of the fund. Tremblant is a new advisor to Vanguard.

About Vanguard
Founded in 1975, Vanguard is one of the world's leading investment management companies. The firm offers investments, advice, and retirement services to tens of millions of individual investors around the globe—directly, through workplace plans, and through financial intermediaries. Vanguard operates under a unique, investor-owned structure where Vanguard fund shareholders own the funds, which in turn own Vanguard. As such, Vanguard adheres to a simple purpose: To take a stand for all investors, to treat them fairly, and to give them the best chance for investment success. For more information, visit vanguard.com.

For more information about Vanguard funds, visit vanguard.com to obtain a prospectus or, if available, a summary prospectus. Investment objectives, risks, charges, expenses, and other important information are contained in the prospectus; read and consider it carefully before investing.

All investing is subject to risk, including the possible loss of the money you invest. 

Vanguard Marketing Corporation, Distributor.

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SOURCE Vanguard

FAQ

What changes were announced for Vanguard Mid-Cap Growth Fund (VMGRX)?

Vanguard announced that Tremblant Capital will become the sole advisor of VMGRX, replacing Frontier Capital Management and Wellington Management Company.

How will the VMGRX expense ratio change under the new management?

The expense ratio will increase from 0.33% to 0.39%, but with a one-year fee waiver, it will only increase to 0.34% in the first year.

Who will manage the Vanguard Mid-Cap Growth Fund (VMGRX) after the change?

The fund will be managed by Brett Barakett (Founder, Chairman, and Co-CIO) and Michael Cling (Co-CIO) of Tremblant Capital.

What is Tremblant Capital's investment approach for VMGRX?

Tremblant Capital employs a long-term, research-driven, growth-oriented approach, focusing on businesses undergoing 'consequential change' that could lead to better long-term free cash flow generation.

Will VMGRX remain competitive in terms of costs compared to peers?

Yes, despite the expense ratio increase, VMGRX will continue to be in the lowest-cost quartile of its peer group.