Skip to main content
The Globe and Mail
Support Quality Journalism.
The Globe and Mail
First Access to Latest
Investment News
Collection of curated
e-books and guides
Inform your decisions via
Globe Investor Tools
Just$1.99
per week
for first 24 weeks

Enjoy unlimited digital access
Cancel Anytime
Enjoy Unlimited Digital Access
Get full access to globeandmail.com
Just $1.99per week for the first 24weeks
Just $1.99per week for the first 24weeks
var select={root:".js-sub-pencil",control:".js-sub-pencil-control",open:"o-sub-pencil--open",closed:"o-sub-pencil--closed"},dom={},allowExpand=!0;function pencilInit(o){var e=arguments.length>1&&void 0!==arguments[1]&&arguments[1];select.root=o,dom.root=document.querySelector(select.root),dom.root&&(dom.control=document.querySelector(select.control),dom.control.addEventListener("click",onToggleClicked),setPanelState(e),window.addEventListener("scroll",onWindowScroll),dom.root.removeAttribute("hidden"))}function isPanelOpen(){return dom.root.classList.contains(select.open)}function setPanelState(o){dom.root.classList[o?"add":"remove"](select.open),dom.root.classList[o?"remove":"add"](select.closed),dom.control.setAttribute("aria-expanded",o)}function onToggleClicked(){var l=!isPanelOpen();setPanelState(l)}function onWindowScroll(){window.requestAnimationFrame(function() {var l=isPanelOpen(),n=0===(document.body.scrollTop||document.documentElement.scrollTop);n||l||!allowExpand?n&&l&&(allowExpand=!0,setPanelState(!1)):(allowExpand=!1,setPanelState(!0))});}pencilInit(".js-sub-pencil",!1); // via darwin-bg var slideIndex = 0; carousel(); function carousel() { var i; var x = document.getElementsByClassName("subs_valueprop"); for (i = 0; i < x.length; i++) { x[i].style.display = "none"; } slideIndex++; if (slideIndex> x.length) { slideIndex = 1; } x[slideIndex - 1].style.display = "block"; setTimeout(carousel, 2500); } //

U.S. asset manager Vanguard Group will close its Hong Kong and Japan operations and cut jobs across both locations as it shifts its Asian headquarters to Shanghai, it said on Wednesday.

The largest mutual fund company, with roughly US$6-trillion in assets under management, said in a statement its Hong Kong business mostly served institutional clients and not retail investors, which are its primary focus.

Hong Kong has been home to Vanguard’s main office in Asia after the index fund giant closed its Singapore operation in 2018. It said the departure from the Asian financial hub would take between six months and two years.

Story continues below advertisement

The move comes as U.S.-China relations are strained over issues including trade, territorial disputes and individual freedoms in Hong Kong. Asked whether events in Hong Kong played a role in its decisions, Vanguard spokeswoman Dana Grosser said in an e-mail that Vanguard still sees growth potential in the city.

“Hong Kong is an important global financial center, and continues to be an important international capital market for Vanguard,” she wrote. The city’s stock market “will remain as a critical component for Vanguard’s global diversified funds” while its securities channels will still provide access to Chinese stock and bond markets, she said.

Vanguard is seeking a “Fund Management Company” licence to serve retail investors directly in the mainland. It had launched a wholly foreign-owned enterprise (WFOE) in China in May, 2017, and announced a China advisory joint venture in December, 2019, with the country’s leading fintech company, now known as Ant Group, to provide retail investment advisory services.

Daniel Wiener, who edits a newsletter for Vanguard investors, said its move to Shanghai could help gain favour with the Chinese government. “No doubt it would look more favorably on a company operating directly on homeland soil,” he said in an e-mail.

Vanguard said it would exit its Hong Kong ETF (exchange-traded fund), mandatory provident fund and index-tracking investment schemes businesses.

An unspecified number of jobs would be lost as a result of the closing, according to the statement. Vanguard will no longer market or distribute products in Japan, and close operations there, it added. Spokespeople declined to say how many jobs would be cut in Hong Kong and Japan.

In Hong Kong, Vanguard runs six ETFs that are traded on the city’s stock exchange, according to its website.

Story continues below advertisement

The best performing of those was the Total China Index ETF, which had gained 15.5 per cent in terms of net asset valuation returns for the year up until July, the website showed.

Vanguard’s closing plans were first reported on Wednesday by Ignites Asia, a Financial Times service.

Ant, an affiliate of Alibaba Group Holding Ltd., is targeting a more than US$200-billion valuation in a dual listing in Hong Kong and Shanghai and operates Yu’ebao, one of the world’s largest money market funds.

Your time is valuable. Have the Top Business Headlines newsletter conveniently delivered to your inbox in the morning or evening. Sign up today

Your Globe

Build your personal news feed

  1. Follow topics and authors relevant to your reading interests.
  2. Check your Following feed daily, and never miss an article. Access your Following feed from your account menu at the top right corner of every page.

Follow topics related to this article:

View more suggestions in Following Read more about following topics and authors
Report an error
Due to technical reasons, we have temporarily removed commenting from our articles. We hope to have this fixed soon. Thank you for your patience. If you are looking to give feedback on our new site, please send it along to feedback@globeandmail.com. If you want to write a letter to the editor, please forward to letters@globeandmail.com.

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff.

We aim to create a safe and valuable space for discussion and debate. That means:

  • Treat others as you wish to be treated
  • Criticize ideas, not people
  • Stay on topic
  • Avoid the use of toxic and offensive language
  • Flag bad behaviour

If you do not see your comment posted immediately, it is being reviewed by the moderation team and may appear shortly, generally within an hour.

We aim to have all comments reviewed in a timely manner.

Comments that violate our community guidelines will not be posted.

UPDATED: Read our community guidelines here

Discussion loading ...

To view this site properly, enable cookies in your browser. Read our privacy policy to learn more.
How to enable cookies