* Names others to manage most of $3.7 bln U.S. Growth fund
* "What took Vanguard so long?" - Vanguard analyst
* Vanguard says it replaced AllianceBernstein on 2nd fund
(Adds details on another fund replacement, and on funds
AllianceBernstein still manages)
BOSTON, Oct 7 Vanguard Group Inc said on
Thursday it replaced AllianceBernstein Holding LP (AB.N) as
manager of most of its $3.7 billion Vanguard U.S. Growth Fund
(VWUSX.O) and on a smaller second fund after long stretches of
Vanguard, the privately held giant Pennsylvania fund firm,
said it named Wellington Management Co and Delaware Investments
to replace AllianceBernstein, which had run about two-thirds of
U.S. Growth and had served as an adviser to the fund since
The remaining one-third of the fund will continue to be run
by William Blair & Co, Vanguard said. "We are confident that
the new advisers ... will help the U.S. Growth Fund regain some
of its past luster," said Vanguard Chief Executive Bill McNabb
in a statement.
U.S. Growth's record has been a sore spot for Vanguard for
some time. Though a sometime standout, its returns rank it just
average or worse over three-year and five-year periods,
according to Morningstar Inc.
"One has to ask what took Vanguard so long?" Daniel Wiener,
who writes a newsletter for Vanguard investors, said in a note.
Wiener also asked whether Vanguard would drop AllianceBernstein
from an annuity growth portfolio it also sub-advises, which he
called "another disaster story."
A Vanguard spokeswoman confirmed it had replaced
AllianceBernstein on the second fund, the Vanguard Variable
Insurance Fund - Growth Portfolio, with about $235 million in
assets. Management of most of it was turned over to Wellington
U.S. Growth's largest holdings as of June 30 included
computer makers Apple Inc (AAPL.O) and Hewlett-Packard Co
(HPQ.N), and search firm Google Inc (GOOG.O), according to
An AllianceBernstein spokesman declined to comment on
whether the moves would affect the company's earnings. The
company had $467 billion under management as of August.
It continues to run parts of other Vanguard funds including
the Windsor (VWNDX.O), International Value (VTRIX.O), and
Global Equity (VHGEX.O) funds -- overseeing about $6 billion in
all, according to Vanguard.
"We remain deeply committed to our valued relationship with
Vanguard," AllianceBernstein said in a statement. "We continue
to provide several investment services to the firm and will
work to further enhance our partnership with them."
Shares of AllianceBernstein were up 16 cents to $27.15 in
late morning trading.
(Reporting by Ross Kerber, editing by Dave Zimmerman and
Gerald E. McCormick)