China

Vanguard Confirms Exit from China, Shifts Strategy Amid Market Changes

Vanguard, a global leader in asset management and mutual funds, has confirmed its departure from the Chinese market, following recent market speculations. This move involves significant changes to its business operations in the country, including the rebranding of Vanguard Investment Advisory (Shanghai) Co., Ltd. to Ant Investment Advisory (Shanghai) Co., Ltd. Furthermore, Ant Fund Sales Co., Ltd. (Hangzhou) has taken over full ownership of the company, increasing its share from 51% to 100%.

Established in 1975 in the United States, Vanguard has been a pioneer in index investing and has grown into one of the largest mutual fund management companies globally, managing assets worth $7.8 trillion and serving over 50 million investors. The company had expanded its footprint to China in 2017 with Vanguard Investment Management (Shanghai) Co., Ltd. and later partnered with Ant Financial in 2019 to establish Vanguard Investment Advisory in Shanghai.

Despite its recent withdrawal, Vanguard had been actively involved in China's opening financial market. The firm was advancing its application for a Chinese public offering license, coinciding with the China Securities Regulatory Commission lifting restrictions on foreign ownership in securities firms and mutual fund companies.

However, Vanguard's exit from China follows a series of executive resignations in its Asia and China divisions in 2020 and the relocation of its Asian headquarters from Hong Kong and Japan to Shanghai. This withdrawal also comes after the company's earlier denial of such rumors and its decision to pause its plans for a public fund business in China.

Despite its exit, Vanguard maintains a positive outlook on the Chinese market. The firm acknowledges China's recent GDP growth and continues to forecast the country's annual economic growth to be between 5.25% and 5.75%, which is higher than market expectations. Vanguard attributes this growth to increased policy support and anticipates a recovery driven by private sector and household confidence.