NEW YORK (CNNfn) - Vanguard Group's former flagship Windsor Fund, which has been closed to new investors since 1989, is reopening on June 1, the company said Thursday.
The large-cap value fund, with $16.5 billion in assets, also hired a second adviser to share the duties at the helm, Vanguard said. The fund had closed because it was getting too big.
"While Windsor Fund's emphasis on deep value stocks has been out of favor recently, we believe it is a sound long-term investment strategy," said CEO John Brennan.
Brennan said Vanguard remains committed to Wellington Management Co., the longtime adviser of the fund. But the fund's board voted to hire a second adviser, Sanford Bernstein, to help the fund diversify. Sanford Bernstein manages $80 billion in assets.
Charles Freeman, a partner at Wellington, has managed the Windsor Fund since 1995. Wellington will remain lead adviser, Brennan said.
The fund will also remove the $25,000 annual limit for current investors to buy new shares, Vanguard said. The fund will have a $3,000 minimum initial investment when it reopens in June, and $1,000 for IRAs.
The decision to reopen Windsor Fund may be because existing investors were fleeing because of lagging performance, said Russ Kinnel, head of equity fund research at Morningstar, a Chicago fund-tracker.
"Lately, performance has been so bad that a fair amount of money has been coming out," Kinnel said. "It's been a fund people are disappointed with."
Once Vanguard's flagship, Windsor Fund made some bad bets that commodities such as oil, paper and aluminum would make a turnaround, Kinnel said. But the sector has been badly beaten down. The fund peaked at $21 billion in assets in 1997.
While Wellington is a good shop, the fund has had a tough couple of years, Kinnel said.
The fund is up 1.61 percent as of Wednesday year to date, according to Morningstar. In 1998, it earned 0.81 percent, falling short of the S&P 500 by 27.77 percent; and in 1997 it earned 21.97 percent, missing the benchmark index by 11.38 percent.
Other funds have also reopened recently because of plunging assets, including Fidelity's Low-Priced Stock Fund, Kinnel said.
Vanguard, based in Valley Forge, Pa., is one of the largest fund families in the United States.