Hong Kong

Vanguard announces closure of Hong Kong Office

Vanguard will reportedly be closing its Hong Kong office following a strategic review, with greater regional focus to be placed on its China operations.

According to an exchange filing: “Vanguard has taken the decision to exit its ETF business in Hong Kong in order to enable it to channel its human and financial capital in the region towards initiatives that are more closely aligned with its strategic focus and provide a long-term platform for scalable growth.”

A company spokesperson, according to an article by Finews Asia, said that the shift would occur across a 6- to 24-month timeframe, stating that Vanguard’s “future focus in Asia is on mainland China”, with the firm’s primary regional office to be based in Shanghai.

In addition to closing its Hong Kong office, the firm is also said to be closing its offices in Japan.

As part of its departure from Hong Kong, Vanguard is also seeking an “orderly exit” from its six Hong Kong-listed ETFs, and is investigating unwinding options for each of the entities.

“Unfortunately, from a distribution business standpoint, the current industry dynamics are better suited to institutional investors and do not currently support the scale needed for [retail investors]. Should these dynamics change longer-term, we cannot rule out the possibility of resuming services more aligned with our strategic priorities at a future date,” said the Vanguard spokesperson.

In addition to Vanguard, Japanese firm Daiwa Securities has also stated its desire to exit Hong Kong.

Keiko Tashiro, Deputy President, Daiwa said that “if facts emerge such as people getting arrested one after another, we may need to front-load it.”

“Once the joint venture is established, we can do China business in China,” Tashiro commented.