Vanguard plans complete close of China operations

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Taipei Times – Vanguard Group Inc, the US asset-management giant, is to shutter its remaining business in China after a retreat two years ago, people familiar with the matter said, abandoning a 27 trillion yuan (US$3.9 trillion) fund market that global competitors are embracing.

The Malvern, Pennsylvania-based firm has notified the Chinese government of intentions to shutter its unit in Shanghai, the people said, requesting not to be named because the matter is private.

The company also is planning to exit a robo-advisory joint venture with Jack Ma (馬雲)-backed Ant Group Co (螞蟻集團), the people said.

The moves would mark a complete exit from China for the US$7.1 trillion giant, which once saw significant potential in the world’s second-largest economy.

The reversal stands as a cautionary tale for global peers including BlackRock Inc and Fidelity International Ltd, which are still racing to build up local operations as the nation’s recovery and a new pension reform brighten prospects.

Vanguard said that its Shanghai unit and the joint venture are operating normally.

Ant and representatives of the joint venture said the same.

All three declined to comment further.

The Chinese Securities Regulatory Commission did not immediately reply to a request seeking comment.

Caixin reported Vanguard’s plans earlier.

A complete retreat would follow Vanguard’s surprise move two years ago to scrap plans for a mutual-fund management license in China.

Fidelity and Neuberger Berman Group have recently joined Blackrock in launching onshore funds through new wholly owned units, while Manulife Financial Corp, JPMorgan Chase & Co and Morgan Stanley have gained approvals to buy out local partners to gain full control of existing ventures.

The race for fund advisory is heating up with more players coming in, hurting profitability. Vanguard’s venture, which has been offering only products from competitors, booked a loss in 2021 that was much higher than an internal forecast made after it was set up in 2019. Vanguard owns 49 percent of it.

Image by: Reuters

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Edmund Shing, PhD

Global Chief Investment Officer
BNP Paribas Wealth Management

Edmund has over 29 years of experience in financial markets in a wide variety of positions, ranging from proprietary trading to portfolio manager in a number of financial institutions in London and Paris.  He previously held the role of Global Head of Equity and Derivative Strategy at BNP Paribas in London from 2015 to 2020, and has been Chief Investment Officer at BNP Paribas Wealth Management since November 2020.

Edmund is responsible for piloting our investment strategy and will continues to rollout out recommendations and themes with actionable advice that brings our expertise to our clients and support to our client-facing teams.  In this time of change, his expertise in following and anticipating markets is a true value added for both our customers and those at Wealth Management who serve them.

Edmund has a PhD in Cognitive and Computing Science from the University of Birmingham in the United Kingdom, and has done advanced studies in Knowledge-Based Systems and in Experimental Psychology.  He is an EFFAS-certified financial analyst. He has also authored the book “The Idle Investor” published by Harriman House in 2015, proposing 3 simple investment strategies that take only a few minutes to execute per month.

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