- Vanguard maintains its conservative approach, excluding Bitcoin ETFs and futures-based products, aligning with its traditional investment philosophy.
- Despite the #BoycottVanguard movement on networks, the firm continues to attract capital, demonstrating the loyalty and trust of its investors.
In the investment area, Vanguard Group Inc. stands out for its conservative, value-oriented approach since its founding in 1975 by Jack Bogle. This institution has prioritized assets with real cash flow, such as stocks and bonds, while staying away from options considered riskier, such as cryptocurrencies.
Vanguard’s steadfastness against cryptocurrencies has been highlighted again by the launch of the first operational Bitcoin ETFs in the United States. The decision not to include these ETFs in its platform has triggered an intense debate in the networks, evidenced by the #BoycottVanguard movement.
Here's my rational for that take fwiw pic.twitter.com/sSlyNjqZ9v
— Eric Balchunas (@EricBalchunas) February 20, 2024
Vanguard and Its Strategic Consistency
With $8.6 billion under management, Vanguard has excluded both direct Bitcoin and futures-based products from its offerings. This stance reflects the firm’s commitment to Bogle’s investment principles focused on generating income through more traditional assets and a reluctance toward those of a speculative nature.
This approach extends to its brokerage arm, where, despite allowing commodity ETF trading, it eliminated complex and speculative products in 2019.
Divergence with the Industry
Unlike Vanguard, firms such as BlackRock Inc, Fidelity and Invesco Ltd. have introduced their Bitcoin ETFs, and State Street services several of these products. Franklin Templeton has been particularly proactive, adapting its branding to promote its Bitcoin fund.
This discrepancy has intensified discontent toward Vanguard online, although experts such as Dave Nadig consider it unlikely that the #BoycottVanguard movement will significantly affect the company given its strong customer base and the continued flow of capital into its funds.
Investor Loyalty to Vanguard
Despite criticism from the crypto community, Vanguard has cultivated loyalty online, especially on forums such as Bogleheads.org, where value-based investing is emphasized. The strategy of moving away from crypto ETFs could, in the long run, deter younger investors, but according to Eric Balchunas of Bloomberg Intelligence, the risk is minimal in the face of the trust Vanguard has built among its customers.
Vanguard’s strategy, rooted in Bogle’s principles, has led to an outright refusal to engage with the cryptocurrency market, including Bitcoin ETFs. This position has generated debates within the crypto community, culminating in a boycott movement.
However, Vanguard’s stance remains unchanged, reaffirming its dedication to investing in assets with tangible returns and its caution towards options considered riskier.
