Asia relocation: In the Vanguard
Does the investment manager’s decision to shutter its Hong Kong office and relocate to Shanghai matter?
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.
It was careful not to burn any bridges in the embattled former British colony.