Asset Management

Vanguard Expands Chinese Distribution Footprint

Tom Burroughes Group Editor December 16, 2019

Vanguard Expands Chinese Distribution Footprint

The asset management giant, famed for its index fund model, has already tapped into the high net worth mainland China market and is now broadening its distribution appeal by this partnership. The JV is still the standard approach Western firms use for penetrating the country's financial markets.

Vanguard, the $5.9 trillion US-based asset manager, and China’s Ant Financial Services Group, late last week announced that they are partnering to distribute investment advisory services across the Asian economic giant.

Ant Financial, which operates the payment and lifestyle platform, Alipay is, by some measures, one of the world’s largest wealth management shops and affiliated with Alibaba, the e-commerce giant.

The two companies' joint venture will provide a fund investment advisory service, as approved by the China Securities Regulatory Commission (CSRC), to Chinese individual investors, a statement from the organizations said.

"Since opening our Shanghai office in 2017, we have been dedicated to bringing Vanguard's way of investing to Chinese investors," Vanguard CEO Tim Buckley said. "This venture marries Vanguard's time-tested investment philosophy and approach with Ant's digital platform and technology to fundamentally change for the better how individuals in China invest."

The joint venture will provide customized services for investors based on their investment objectives, time horizon, and risk preferences, with minimum investments of RMB800 (about $113) and accessible through Alipay and Ant Fortune, a wealth management platform operated by Ant Financial. Previously, professional investment advisory services were only accessible to a small number of high net worth individuals in China.

Alipay serves more than 1.2 billion users with its local e-wallet partners. Users access services such as hailing cabs, paying utility bills, making doctor's appointments, to wealth management. Users can purchase money market funds on Yu'e Bao, the spare cash management platform within the Alipay app, as well as other wealth management products offered by asset management companies on the Ant Fortune platform.

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