Shanghai skyline
At one level, it can be argued – no, not really. The Pennsylvania-based group has long struggled to break into Hong Kong’s retail market. In a statement, Vanguard said it would, after an "extensive review", wind down its local operations – a process that will take up to two years – and exit its exchange-traded fund business in the city.
In a filing to the Hong Kong Stock Exchange on August 26, Vanguard set out its position using some carefully crafted – and exceedingly bland – words.
The decision, Vanguard said, would let it expand into “international markets that offer the ability to directly reach individual investors... combined with access to the required scale and industry dynamics” that make the firm’s low-cost model work.
Or to put it another way, sorry Hong Kong, I’m afraid you just don’t cut it any more.
Growth potential
It was careful not to burn any bridges in the embattled former British colony. “[T]his move is not to suggest that we do not see growth potential in Hong Kong – quite the contrary,” Peter Zhang, a Shanghai spokesman at Vanguard, tells Euromoney.