News release

Vanguard Announces Plans to Launch Active China Equity Fund

VALLEY FORGE, PA (November 29, 2021)—Vanguard today filed an initial registration statement with the U.S. Securities and Exchange Commission to introduce Vanguard China Select Stock Fund. The fund will invest in both onshore and offshore Chinese equities and is intended for clients seeking actively managed, high-alpha-target equity exposure to complement a broadly diversified portfolio. Vanguard expects to launch the fund in the first quarter of 2022.

“Vanguard has continued to enhance its active equity lineup by partnering with top-tier external investment advisors who provide access to sound investment strategies and expert portfolio manager talent,” said Kaitlyn Caughlin, head of Vanguard Portfolio Review Department. “Vanguard research indicates that there is an opportunity for talented active managers to generate alpha in China’s large, but inefficient, equity market.”

Vanguard believes that exposure to China is an important part of both the equity and fixed income allocations of a globally diversified portfolio. China is a significant and growing portion of the global equity market, representing the second largest nation by GDP output and the third largest country by market capitalization. With the China Select Stock Fund, Vanguard seeks to provide risk-tolerant investors with a targeted approach to exposure in the region. The fund will seek to outperform the MSCI China All Shares Index and have estimated expense ratios of 0.83% for Investor Shares and 0.73% for Admiral Shares, compared with an average expense ratio of 1.14% for competing funds.1

Vanguard takes a deliberate and thoughtful approach to product development, partnering with some of the world’s best managers to offer a curated range of active equity portfolios. The fund will be co-managed by long-tenured Vanguard fund advisors Wellington Management Company LLP and Baillie Gifford Overseas Ltd. Both firms have deep portfolio management experience and expertise in China and a track record of outperformance in Chinese equity markets. Vanguard’s confidence in these firms is underscored by existing and successful partnerships, as well as their track records of delivering value to Vanguard shareholders.

While the fund may offer alpha potential and diversification benefits, the single-country focus may expose investors to more acute investment, geopolitical, and regulatory risks. The fund’s country-specific concentration may drive higher tracking error and greater volatility relative to the broad market and therefore should be thoughtfully integrated into a globally diversified portfolio. An active approach to investing in China, coupled with the ability to invest in a wide range of both onshore and offshore Chinese equities, will provide the fund’s portfolio managers flexibility to help navigate the dynamics of potential market constraints and a rapidly shifting geopolitical landscape.

Longstanding active management expertise

Vanguard’s actively managed mutual funds and ETFs represent $1.8 trillion across traditional active equity, bond, quantitative, and balanced assets.2 The firm has more than 45 years of experience in selecting and partnering with active managers and currently partners with 25 of the world’s top asset managers to oversee a full roster of active stock, bond, and balanced mandates. Vanguard’s approach is rooted in an adherence to consistent, repeatable processes over time, and a long-term perspective, which is critical to achieving long-term success in active management.


About Vanguard

Vanguard is one of the world’s largest investment management companies. As of October 31, 2021, Vanguard managed $8.4 trillion in global assets. The firm, headquartered in Valley Forge, Pennsylvania, offers 418 funds to its more than 30 million investors worldwide. For more information, visit

Asset figures as of October 31, 2021 unless otherwise noted.

1 Source: Lipper, a Thomson Reuters Company, as of October 31, 2021.

2 Source: Morningstar, Vanguard.

Registration statements relating to Vanguard China Select Stock Fund have been filed with the Securities and Exchange Commission (SEC) but have not yet become effective. The SEC has not approved or disapproved these securities or passed upon the adequacy of either fund’s preliminary prospectus. Any representation to the contrary is considered a criminal offense. These securities may not be sold nor may offers to buy be accepted prior to the time the registration statements become effective. This communication shall not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of, these securities in any state in which such offer, solicitation, or sale would be unlawful prior to registration or qualification under the securities laws of any such state.

For more information about Vanguard funds, visit to obtain a prospectus or, if available, a summary prospectus. Investment objectives, risks, charges, expenses, and other important information about a fund are contained in the prospectus; read and consider it carefully before investing.

All investing is subject to risk, including the possible loss of the money you invest. Diversification does not ensure a profit or protect against a loss.

Investments in securities issued by non-U.S. companies and governments are subject to risks including country/regional risk and currency risk. These risks are especially high in emerging markets.

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