U.S. money manager Vanguard Group has dropped its plans to obtain a mutual funds license in China.
Saying the Chinese market for both mutual funds and exchange traded funds (ETFs) is “crowded,” Pennsylvania-based Vanguard, said in a written statement that it will instead focus on opportunities in the $3-trillion U.S. Chinese mutual funds market through an existing advisory joint venture with Alibaba-owned Ant Group.
Vanguard, which has assets under management of $7.2 trillion U.S., said in August that it will close its Hong Kong and Japan operations as it shifts its Asian headquarters to Shanghai, China. The company exited Singapore a few years ago.
The money manager said in October it will close most of its business managing money for institutional investors and large pension funds in Australia and New Zealand and instead focus on serving retail clients.
Since China fully deregulated its giant mutual funds sector in April 2020, global asset managers such as BlackRock and Fidelity have applied to set up wholly-owned mutual fund units in the country. The sector already has about 150 players and is dominated by domestic Chinese companies.
Vanguard, which is one of the world’s biggest mutual fund companies, said in the statement that it plans to maintain a team in Shanghai focused on joint venture support, policy and market research, and business development, and that it remains committed to the Chinese market.