What You Need to Know
- The Vanguard China Select Stock Fund will invest in onshore and offshore Chinese equities.
- It is expected to launch in Q1 2022 and charge 0.83% for Investor Shares and 0.73% for Admiral Shares.
- Wellington Management and Baillie Gifford Overseas will co-manage the fund.
More than eight months after Vanguard abandoned plans to start a mutual fund business in China for Chinese investors, the fund giant has announced plans to launch an actively managed China equity fund for U.S. investors.
The Vanguard China Select Stock Fund will invest in both onshore and offshore Chinese equities and is expected to launch in the first quarter of 2022.
“Vanguard research indicates that there is an opportunity for talented active managers to generate alpha in China’s large, but inefficient, equity market,” said Kaitlyn Caughlin, head of the Vanguard Portfolio Review Department, in a statement.
Vanguard “believes exposure to China is important for both equity and fixed income allocations of a globally diversified portfolio,” according to the company’s news release. It notes that China, the second-largest economy in the world, “is a significant and growing portion of the global equity market,” accounting for one-third of the global market’s capitalization.
The Vanguard China Select Stock Fund will seek to outperform the MSCI China All Shares Index and will be co-managed by Wellington Management Company LLP and Baillie Gifford Overseas Ltd., both long-tenured Vanguard fund advisors with portfolio management experience and expertise in China.