Vanguard quit mutual funds in China, but worked with Ant –

Vanguard quit mutual funds in China, but worked with Ant

An Ant Group logo is displayed at the headquarters of the company, an Alibaba subsidiary, in Hangzhou, Zhejiang province, China, on October 29, 2020.

Aly Song | Reuters

BEIJING – Vanguard’s experiment with fintech in China is showing early signs of success.

In less than a year, more than 1 million users have signed up for “BangNiTou,” a smartphone-based investment advisory product that is run through the US mutual fund giant’s joint venture with affiliate Ant Group. from Alibaba.

That’s according to a statement from BangNiTou on Thursday, just four days after Vanguard said it would abandon its own pursuit of a mutual fund license in China. Instead, the company plans to focus on its partnership with Ant.

Ant operates Alipay, one of the two dominant mobile payment apps in China, in which BangNiTou is located.

The Vanguard-branded product stands for “Help You Invest” in Chinese and was launched in April 2020. It is a form of automated financial planning and self-advisory that uses data analytics to determine how a client should invest based on factors such as age and income. .

While these automated investment products have gained popularity in the US, the concept of personal finance, whether through human or automated advisers, is still much less common in China. Most locals save a lot to invest in the housing market or to receive medical treatment in case of serious illness. That’s in part the result of limited health insurance implementation, stock market volatility, and high lows for fund investment.

For BangNiTou, the minimum investment is 800 yuan ($ 123), about 10% of the officially reported average monthly salary in cities.

In July, Vanguard told the Financial Times that new clients were allocating significantly more, about $ 1,575 on average for a total of $ 315 million in assets among 200,000 users. Updated figures were not available.

Ant holds the majority stake

“While the number of BangNiTou users has increased rapidly, the fund investment advisory market in China is still in a nascent stage with significant potential for further growth,” said Peter Zhang, CEO of the Vanguard joint venture. with Ant, in a statement.

Foreign financial institutions received a long-awaited green light last year to take full ownership of local Chinese companies in futures, mutual fund management and securities. It’s unclear what rules might apply in fintech or fintech.

Vanguard’s joint venture with Ant was launched in late 2019. Ant holds the majority stake at 51%, according to Chinese business database Qichacha.

The Alibaba-affiliated company claims to have around 1 billion users worldwide. It became one of the first players in China’s wealth management industry with its Alipay-linked money market fund “Yu’e bao”, which had around 1.7 trillion yuan in assets under management at its peak. early 2018.

Late last year, Chinese authorities abruptly suspended Ant’s plans for what would have been the largest initial public offering to date. Subsequently, Beijing increased its regulation on fintech, saying the industry should be subject to the same rules as banks.


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