Exchange-Traded Funds at Vanguard (A) Harvard Case Solution & Analysis

Vanguard Group direction, headed by CEO John Brennan, was contemplating whether to establish exchange-traded funds (ETFs) in early 2000. ETFs, first created in the early 1990s, combined facets of traditional mutual funds and closed-end funds. The US ETF business had reached $36 billion in assets under management, growing rapidly over the past few years. Since ETFs were entirely index-tracking goods, the greatest index mutual fund firm, Vanguard, had some probable expertise in the handling of ETFs. Nevertheless, entering this marketplace would present moreover exceptional challenges for Vanguard. Vanguard had a principle espousing low-turnover investing, while ETFs empowered short-term trading. The business would also need to produce a distribution network for ETFs. Eventually, since the business was owned by Vanguard's mutual fund investors, management considered whether present shareholders would take advantage of an ETF product commencement.

PUBLICATION DATE: June 10, 2011 PRODUCT #: 311134-PDF-ENG

This is just an excerpt. This case is about FINANCE & ACCOUNTING

 

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