Investor Karen Firestone: How Vanguard could potentially shake up this closed market

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It makes sense that Vanguard may be on the prowl for another market, but is this the right one?

reportedly wants to join

Vanguard has watched as its primary market for publicly traded US companies has shrunk from a high of 7,500 at the end of 1995 to around 4,400 at year-end 2018. Although the total public market value has grown considerably through appreciation during this period, the private equity industry has raised $1.6 trillion in funds over the past ten years, with $166.4 billion alone in 2018, according to Pitchbook data.

So, it makes sense that Vanguard may be on the prowl for another market, but is this the right one? Its sweet spot has been asset classes which it believes are, or should be, large and growing, efficiently priced, passively managed, widely available, highly liquid, and very low cost to investors.

 

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