Vanguard struggles with U.S. Growth fund

August 7, 2008 | By Jim Kim

Vanguard has found itself in a bit of pickle regarding its U.S. Growth fund, whose performance has disappointed some recently. Investment News reports that CEO John Brennan sent an angry letter to an investor who complained about the firm, a complaint that Vanguard and its CEO recommended the fund when performance was lagging. "To assert that I - and specifically Vanguard - would place business ahead of clients' interest is an outrageous statement, and one about which you should be ashamed," Mr. Brennan wrote. Customers are always going to complain when performance lags, but the complaints seem to have been heard. The company recently said that submanager AllianceBernstein, which manages about two thirds of the fund, will put some new managers in place. The fund was down about 11 percent through July 31, which is roughly in line with the Russell 1000 Growth index. The fund accounts for about 7 percent of Vanguard Star, a fund of funds.

For more:
- here's the Investment News article