Vanguard to open ETFs to sec lending
31 August 2016 Pennsylvania
Image: Shutterstock
Vanguard Asset Management is preparing to allow select exchange-traded funds (ETF) to engage in securities lending transactions as an additional revenue source.
A spokesperson for Vanguard confirmed that 12 Vanguard ETFs from a variety of markets will be included in the move, although there is no set timeframe for when the new strategies will begin.
As part of its attempt to improve investor returns, Vanguard will give all securities lending revenues back to its clients, minus the costs of running the additional service.
In a letter to investors, Vanguard explained that the decision to engage in securities lending through its ETFs was borne of the fact that it now considered itself to be “of a sufficient size and maturity whereby it can facilitate the lending of securities in a scalable, efficient and profitable manner”.
The spokesperson added that the ETFs’ collateral parameters would be inline with its fixed income counterparts, namely high-quality liquid assets in the form of sovereign bonds from France, Germany, the Netherlands, the UK and the US.
A spokesperson for Vanguard confirmed that 12 Vanguard ETFs from a variety of markets will be included in the move, although there is no set timeframe for when the new strategies will begin.
As part of its attempt to improve investor returns, Vanguard will give all securities lending revenues back to its clients, minus the costs of running the additional service.
In a letter to investors, Vanguard explained that the decision to engage in securities lending through its ETFs was borne of the fact that it now considered itself to be “of a sufficient size and maturity whereby it can facilitate the lending of securities in a scalable, efficient and profitable manner”.
The spokesperson added that the ETFs’ collateral parameters would be inline with its fixed income counterparts, namely high-quality liquid assets in the form of sovereign bonds from France, Germany, the Netherlands, the UK and the US.
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