Vanguard, the renowned American investment management firm known for its low-cost mutual funds and ETFs, has stirred dissatisfaction among its clients and the possibility of fund transfers due to its stance against US-listed spot Bitcoin exchange-traded funds.
Founded in 1975 by John C. Bogle, Vanguard is one of the world’s largest investment management companies, distinguished by its mutual ownership structure, where it is owned by its funds, which are in turn owned by their investors. This structure aligns the company’s interests with those of its clients, resulting in lower fees compared to many other investment firms.
Despite offering a wide range of investment products and services, including individual and institutional accounts, brokerage services, financial planning, and asset management, Vanguard has decided not to include any of the US-listed spot Bitcoin ETFs on its brokerage platform.
As reported by The Wall Street Journal on January 11, this decision is based on the company’s belief that these products do not align with its traditional focus on stocks, bonds, and cash, which it considers fundamental for a well-balanced, long-term investment portfolio.
Many Investors Plan to Transfer Their Investments from Vanguard to Other Platforms
Vanguard’s stance, confirmed in its statement to the WSJ, implies that spot Bitcoin ETFs will not be available for purchase on its platform, and the company does not plan to offer its own ETF or other cryptocurrency-related products. This position has led some investors, perceiving a misalignment with their investment philosophies, to consider transferring their funds to other platforms.
Among the investors expressing their intention to move their investments away from Vanguard are Yuga Cohler, senior engineering manager at Coinbase, and Neil Jacobs, a Bitcoin commentator. Cohler plans to transfer his Roth 401(k) savings to Fidelity, which launched one of the ten BTC spot ETFs on January 11. Jacobs is also in the process of moving funds out of Vanguard, criticizing the decision as a poor business move.
The WSJ report also noted that clients of other major investment firms such as Citi, Merrill Lynch, Edward Jones, and UBS faced similar restrictions on purchasing spot Bitcoin ETFs. UBS is reportedly considering these Bitcoin ETFs on a case-by-case basis for “aggressive investors,” while some of the approved ETFs are available on its platform. Citi confirmed the availability of a spot Bitcoin ETF for its institutional clients and is evaluating these products for individual wealth clients. Merrill Lynch is reportedly waiting to observe the trading efficiency of these ETFs before making a decision.
In contrast, spot Bitcoin ETF trading was accessible on JPMorgan’s brokerage platform, with the bank being an authorized participant in BlackRock’s iShares Bitcoin Trust ETF. However, JPMorgan issued a risk disclosure for prospective investors.
