Vanguard launches $5bn rival bid for Barclays' iShares

[blbarnitz]

Vanguard launches $5bn rival bid for Barclays' iShares division

One of America's biggest fund management groups has tabled a $5bn (£3.1bn) bid for iShares, a division of Barclays' profitable asset management arm.
Vanguard, which is headquartered in Pennsylvania and had about $1trillion under management at the end of last year, is understood to have lodged the offer with Barclays in recent weeks. It is being advised by William Blair & Company, a Chicago-based investment banking group.

regards,

[DanH]

Vanguard launches $5bn rival bid for Barclays' iShares division

One of America's biggest fund management groups has tabled a $5bn (£3.1bn) bid for iShares, a division of Barclays' profitable asset management arm.
Vanguard, which is headquartered in Pennsylvania and had about $1trillion under management at the end of last year, is understood to have lodged the offer with Barclays in recent weeks. It is being advised by William Blair & Company, a Chicago-based investment banking group.

regards,

If successful, Vanguard will end up in Canada after all.

[parvus]

So far as I know, they are here, but in the institutional space.

[Bylo Selhi]

Is Vanguard Sailing in Uncharted Seas?

What on earth was Vanguard thinking?

That is what investors in Vanguard Group, the nation's largest mutual-fund company by assets under management, have been asking ever since Vanguard emerged as one of the bidders for the iShares family of exchange-traded funds last month...

Is Vanguard's management recklessly pursuing market share? I don't think so.

First of all, the debt incurred to buy iShares would have been paid off with cost-savings from the acquired funds, not with capital from Vanguard's existing investors.

Next, ETFs are here to stay. Vanguard already is the No. 3 ETF issuer, with roughly $51 billion, or about 5% of the firm's total assets. If competing ETFs poach assets away from Vanguard's mutual funds, the costs of being a Vanguard investor could rise as the firm's portfolios shrink. "If investors and the industry are moving to ETFs," said a former employee, "then Vanguard has to compete."

Vanguard could have slashed expenses at iShares. And the roughly $300 billion in iShares assets would have given Vanguard a much larger base across which it could divide all its costs.

Finally, Vanguard, alone among fund companies, holds two patents on a tax-smart way of using ETFs. This technique involves exchanging securities with large capital gains out of a mutual fund, thus reducing embedded capital gains and generating tax savings for shareholders in both the fund and the related ETF. Acquiring iShares could have given Vanguard a wider lineup of ETFs to pair with its existing mutual funds, generating millions of dollars in annual tax savings for investors.

[See also related thread: Barclays needs to raise 12B - Ishares in trouble?]

[parvus]

More speculative than useful, but here it goes:
Low-fee Vanguard on deck for the Canadian market?

Vanguard doesn't offer its low-fee index mutual funds in the Canadian market. However, the firm's lineup of 39 exchange-traded funds is listed in New York and thus available to anyone with a brokerage account.

Still, it would be a lot more convenient, not to mention cheaper, if Canadians could buy Vanguard ETFs listed on the Toronto Stock Exchange. How about it?

"I think our products would be very useful to Canadian investors and I know that we're taking a very hard look at what we're doing there and how we can improve that," Rebecca Cohen, Vanguard's senior manager of public relations, said yesterday from the company's headquarters in Malvern, Pa.

Ms. Cohen said nothing is imminent in terms of TSX-listed Vanguard ETFs. But the firm does employ a sales executive whose job it is to encourage Canadian pension fund managers to use Vanguard ETFs.

Ah well, who remembers the Victory Burlesque.

[Nemo2]

Ah well, who remembers the Victory Burlesque.

I do, I do!

[Bylo Selhi]

M'aussi

[Gus]

More speculative than useful, but here it goes:
Low-fee Vanguard on deck for the Canadian market?

Vanguard doesn't offer its low-fee index mutual funds in the Canadian market. However, the firm's lineup of 39 exchange-traded funds is listed in New York and thus available to anyone with a brokerage account.

Still, it would be a lot more convenient, not to mention cheaper, if Canadians could buy Vanguard ETFs listed on the Toronto Stock Exchange. How about it?

"I think our products would be very useful to Canadian investors and I know that we're taking a very hard look at what we're doing there and how we can improve that," Rebecca Cohen, Vanguard's senior manager of public relations, said yesterday from the company's headquarters in Malvern, Pa.

Ms. Cohen said nothing is imminent in terms of TSX-listed Vanguard ETFs. But the firm does employ a sales executive whose job it is to encourage Canadian pension fund managers to use Vanguard ETFs.

Some of the low-volatility, high-volume ETFs (like BSV) would be great for Norbert's Gambit should they ever be interlisted.

[pitz]

Some of the low-volatility, high-volume ETFs (like BSV) would be great for Norbert's Gambit should they ever be interlisted.

Lol, or you could just get a proper brokerage account and dispense with the Norbert's Gamb[s]it[/s]ling.

(no offense to Norbert, but his "Gambit" is pretty obsolete and is just a way to get around the poor quality brokerage accounts present through the big banks).

[Gus]

Some of the low-volatility, high-volume ETFs (like BSV) would be great for Norbert's Gambit should they ever be interlisted.

Lol, or you could just get a proper brokerage account and dispense with the Norbert's Gamb[s]it[/s]ling.

(no offense to Norbert, but his "Gambit" is pretty obsolete and is just a way to get around the poor quality brokerage accounts present through the big banks).

Yabbut, my trading fees at RBCDI are four cents per trade cheaper than at E*trade, which saves me, oh, a dollar or so every year based on my trading frequency. And this year my account fees were minus 1% thanks to their promotion. I need to do a Norbert's Gambit only once in a blue moon.

Seriously, not getting ripped off on FX rates would be a welcome improvement (as would getting interest on cash balances in sweep accounts) but those features are not enough incentive to make an obsolete buy-and-holder like me switch.

It's good to see you back, BTW.

[Bylo Selhi]

those features are not enough incentive to make an obsolete buy-and-holder like me switch.

Not to mention that those "[high] quality [IB] accounts" don't include RRSPs and other registered account types.

It's good to see you back, BTW.

+1