ETFs: When companies are blacklisted
When the US increased sanctions against China increased earlier this year, it showed how the ETF industry can be vulnerable to government policy.
Benchmark providers revised listings, removing various Chinese companies from indices, while ETF providers such as BlackRock and Vanguard had to offload billions to comply with the new restrictions.
Geopolitical tensions are to be expected when investing in emerging markets. “It’s the nature of the beast,” says Mark Fitzgerald, head of product specialism at Vanguard, speaking to
Funds Europe for the latest edition of the ETF report.
Vanguard was heavily impacted by the sanctions as it had significant exposure to the Chinese market.