Vanguard U.S. Growth VWUSX will be changing managers shortly. At this point, the fund has been lousy for so long, I don't know if any FundInvestor readers still own it. If you do, let me know.

Anyway, Jim Reilly and Mike Reilly of subadvisor AllianceBernstein are leaving the firm, and Scott Wallace, who was already a named manager, will take their place. This marks yet another manager change for this struggling fund.

Someone recently wrote that this fund and a couple of other weaklings "tarnish" Vanguard's name. I don't agree. It's been a lousy performer, sure, but to me it would take something unethical to tarnish their name. This just means that they are human like everyone else. They've hired a lot of great subadvisors, but they've struck out here.

There are no changes at subadvisor William Blair, where John Jostrand is the manager.

Ivy Fund Joins the 500
Ivy Asset Strategy is joining the Morningstar 500. Here's Kevin McDevitt's take from March 3.

Ivy Asset Strategy isn't as defensive as it may appear.

This fund has generally made timely reductions in its equity holdings, and it's pulling in its horns yet again. In the first two months of the year, lead manager Michael Avery has fully hedged the fund's U.S. stocks using futures contracts, reducing the overall equity exposure to just 18% of assets. For perspective, the fund ended 2009 with nearly 80% unhedged equity exposure. Avery believes that U.S. stocks are expensive given his expectations for tepid economic growth.

Such dramatic allocation swings are a common occurrence here, and Avery has been astute in cutting risk. He bolstered the fund's returns by going to cash during bear markets in 2002 and more recently in 2007-08. Overall, such moves have helped the fund generate one of the better long-term records in the category. However, the fund's timing hasn't been perfect. Holding a large cash stake held back returns during 2003's rally, and has also hurt the fund over the past 12 months. Since the market's low in March 2009, the fund trails the category average by more than 20 percentage points.

Management's willingness to reduce equity exposure doesn't mean that the fund is low risk, either. During the past two years, the fund's emerging-markets weighting has often been north of 40%. Currently, the bulk of the fund's equity exposure comes from Asia, China in particular. Top holdings include financials such as China Life Insurance and Industrial and Commercial Bank of China. While Avery is comfortable with valuations on these stocks, China is prone to bubbles, particularly in the property market where many financials have exposure. The central bank has started to tighten, but property prices still rose 10% year-over-year in January alone.

This fund is more opportunistic than defensive, but its success is undeniable, making it an option for aggressive investors.

Small Value on a Roll
Small-value funds have had a really nice stretch of late. Schneider Small Value is up 14%, and Royce Opportunity is up 11% for the year to date.