Worry about Vanguard in China

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in_reality
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Worry about Vanguard in China

Post by in_reality »

If Vanguard funds were to hold a large % of the market in China, and there were restrictions on major players being able to sell similar to what we see in a downturn today (defined today as stakes exceeding 5 percent), what would happen if I needed to liquidate say 4% of my Total International Stock position in order to take it as a distribution in retirement?

Should I just assume that Chinese law would never define Vanguard as being a major player? If it were AAPL, Vanguard Group Inc. holds 5.67% and perhaps could not liquidate the Chinese shares.

Should I assume current Chinese restrictions will be lifted and never reimplimented?

Should I assume Vanguard would have a plan to liquidate everything other than the Chinese shares in order to meet my redemption request?

Should there be something in Vanguard's prospectus to deal with this case.

How can I know that total stock holding will be available to me in retirement if Vanguard ends up falling into the restrictions of being a major holder in China?

EDIT: Other threads indicate Total International isn't including A-shares at this point. Only that the Emerging fund is. Is that correct?
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abuss368
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Re: Worry about Vanguard in China

Post by abuss368 »

Good question. Have you considered contacting Vanguard to discuss?
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jhfenton
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Re: Worry about Vanguard in China

Post by jhfenton »

in_reality wrote:EDIT: Other threads indicate Total International isn't including A-shares at this point. Only that the Emerging fund is. Is that correct?
Yes. That is correct. Only the EM fund is getting A-Shares at this point, and just an initial 5% allocation.
Patzer
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Re: Worry about Vanguard in China

Post by Patzer »

This is one of the many reasons to hold Developed International and Emerging Markets in separate funds.
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