Industry Updates

ETF Wrap: A new era for Vanguard

An outsider CEO entering Vanguard, the pitfalls of US-listed ETFs in the UK and Amundi entering fixed maturity ETFs made headlines this week

Jamie Gordon

ETF Wrap

This week saw a new hire that could mark sea change at the world’s second-largest asset manager, as Vanguard appointed Salim Ramji as CEO.

Ramji departed BlackRock in January and becomes the first Vanguard chief not to be appointed from within its internal ranks.

He played a key role in overseeing the filing and logistics for the BlackRock Bitcoin Trust (IBIT), leading some to speculate his arrival could prompt a U-turn in Vanguard’s stance on digital assets.

Ramji also led the charge on making ETFs the main tool within BlackRock retirement and wealth portfolios. While Vanguard has closed in on BlackRock’s US-listed ETF assets under management (AUM), its revenue from this segment is less than a third of BlackRock’s, owing to the asset-weighted average fee of its ETFs standing at just 0.09%, according to Bloomberg Intelligence.

Beyond products, Ramji worked as a strategic consultant at McKinsey & Co, advising BlackRock before being hired by the firm. He has already said he will “mobilise” Vanguard, with many expecting his tenure to do away with the lifelong jobs and anti-Wall Street cultural elements of the Jack Bogle era.

UK’s US-listed folly

Industry participants argued the Financial Conduct Authority’s (FCA) proposal to grant US-listed ETFs equivalence under the Overseas Fund Regime (OFR) as a political manoeuvre that will afford few advantages to UK investors and receive limited appetite from US issuers.

Stephen Carson, partner at A&L Goodbody, said the presence of US-listed ETFs would offer few new exposures to UK investors not already covered by UCITS ETFs, which were granted equivalence under the OFR in January.

Peter Capper, senior adviser for international fund regulation at the Investment Association, warned there would be little appetite from US asset managers to make a UK ETF entry. Even if the OFR would spell the end of packaged retail investment products (PRIIPs) disclosures which deterred US issuers, this regulation would only be replaced by new UK disclosure requirements.

Amundi enters fixed maturity

ETF Stream revealed Amundi has entered the fixed maturity bond ETF space with the launch of four ETFs.

The ETFs track FTSE Russell indices to provide exposure to euro government, Italian BTP and German bunds maturing in 2027 and 2028.

The ETFs are listed on Deutsche Boerse and Borsa Italiana with total expense ratios (TERs) of 0.09%.

ETF Wrap is a weekly digest of the top stories on ETF Stream


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