The company also closes a sales office in Japan, although it says its products will still be available in this market.
Those companies mostly serve “institutional clients, not the individual investors who are our primary strategic focus,” Rebecca Katz, senior communications consultant at Vanguard, said in an email to CNN Business. “We believe our greatest future opportunity to help change the way the world invests is to focus on individual investors and the intermediaries who serve them.”
Beijing has strict control over Chinese capital markets, leaving small investors with few options to invest outside of property and the stock market.
“Our future aspirations in Asia are to serve Chinese individual investors in mainland China,” she said.
However, the timing of Vanguard’s announcement is remarkable: Businesses have expressed concern over a controversial national security law imposed on Hong Kong by Beijing this summer that critics fear will forget the city’s unique political and legal freedoms . The financial hub has operated semi-autonomously since the United Kingdom returned it to China in 1997.
Katz said the law was not related to Vanguard’s announcement.
“Indeed, the decision to close the Hong Kong office preceded the passage of the National Security Act,” she said, adding that the move is consistent with the company’s shift from institutional business to retail investors. She pointed to Vanguard’s 2018 closure of her Singapore office as another example of the strategy.
“Let me be clear about Hong Kong,” she added. “Hong Kong is a major global financial center, and remains a major international capital market for Vanguard.”
Katz said the Hong Kong stock market will remain a “critical component” for the company’s globally diversified funds.
– Laura He contributed to this report.
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