Vanguard to launch its first ETF in Hong Kong

May 13th, 2013 | By | Category: ETF and Index News

Indexing investment giant Vanguard has launched its intermediary business in Hong Kong and revealed plans to expand access to its products to investors throughout Asia.

Vanguard to launch its first ETF in Hong Kong

Shelly Painter, Vanguard Asia Regional Managing Director.

The firm is also set to announce the listing of its first locally domiciled exchange-traded fund (ETF), the Vanguard FTSE Asia ex-Japan Index ETF, in Hong Kong.

Since launching the first index fund for individual investors in the United States in 1976, Vanguard has been at the forefront of the indexing investment industry, espousing a low-cost, broadly diversified and long-term investment approach.

Today, Vanguard manages some $2.4 trillion in assets globally and is the third-largest global ETF provider, with $280 billion in ETF assets. The first and second spots go to iShares and SSgA SPDR respectively.

Vanguard has been active in the Asian institutional market since 2000 when it founded an office in Tokyo, and then subsequently in Singapore in 2003. The Hong Kong office, which was first established in 2011 to serve institutional clients and is now understood to comprise 24 people looking after the needs of both institutional and retail clients, will also serve as the Asian hub for the company.

Shelly Painter, Vanguard Asia Regional Managing Director, said: “We have been privileged to do business with institutions in Asia for several years, including institutional investors in Hong Kong. We have built out our presence here because we believe Vanguard’s approach to investing can benefit even more Asian investors.”

Gregory Davis, Chief Investment Officer for Vanguard Asia Pacific, added: “While most mutual funds in Hong Kong are actively managed, we believe indexing, including index funds and ETFs, should be a core holding in all portfolios. Indexing represents low cost and relative predictability of returns because it seeks to follow the performance of a given benchmark.”

Meanwhile, James Norris, Vanguard International Managing Director, said: “As we work to bring our investment approach – including a focus on low investment costs – to more investors around the world, Vanguard’s commitment to building our presence in Asia through the expansion of our regional hub in Hong Kong is a natural step. We believe we can help position more investors in Asia for greater long-term financial success.”

Strategically, Hong Kong has long been positioned a springboard into China. Vanguard’s decision to build out its office there could therefore also potentially precipitate the firm’s eventual launch into Mainland China.

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