Vanguard knocks on China's door

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Barry Barnitz
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Vanguard knocks on China's door

Post by Barry Barnitz » Mon Oct 02, 2017 3:32 am

News report, Vanguard knocks on China’s door to join crowded wealth management market | South China Morning Post
Vanguard Group, the world’s biggest mutual fund manager, plans to sell onshore products in mainland China to tap an asset management market that is still largely off limits to foreign players, company executives say.
China’s private fund market was worth 10.21 trillion yuan (US$1.53 trillion) at the end of August, but it is crowded with 20,652 asset managers, according to data from the Asset Management Association of China (AMAC).

The process for Vanguard and other Western companies to enter the fray will not be easy. Vanguard completed the first step of setting up a wholly foreign-owned enterprise in the Shanghai free-trade zone earlier this year, joining others including JPMorgan Asset Management, BlackRock and Fidelity Investments.
Beijing began allowing foreign asset managers to open wholly-owned ventures and launch onshore products ... in 2016. Once set up, the Chinese subsidiaries of these companies then need approval from the government-backed AMAC to sell products to wealthy Chinese who have a minimum of 1 million yuan to invest.

Vanguard has yet to receive this approval, but it is not in a hurry, according to Clare Zhao, general manager of its China venture, Vanguard Investment Management (Shanghai).
Charles Lin, chief executive and legal representative of Vanguard in China, said it was committed to the market for the long term.

“We are not going to adjust our China market strategy on short-term policy changes or market volatility … but we’re looking at it over 10 or 20 years,” Lin said.
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