Huang Hao, the president of Alibaba affiliate Zhejiang MY Bank, is the venture’s legal representative.
Ant Financial will control the company with a 51% stake, while the Vanguard subsidiary will hold the rest of the new enterprise.
The venture will be located in the Shanghai Free Trade Zone.
Ant Financial, a fintech company, was founded in 2014. It operates Yu’ebao, the world’s largest money market fund with 1.13trn yuan ($163bn) in assets.
Vanguard, with $5.2trn in global assets, is one of the world’s top providers of passive investment products, though one-third of those assets is from actively-managed products.
However, it has been very low key in Asia, particularly compared to rival firm i-Shares. For example, Vanguard has six ETFs registered for retail sale in Hong Kong compared to i-Shares 12 products, according to FE data.
In May 2017, Vanguard opened a wholly foreign-owned enterprise (WFOE) structure in China. It has 20 staff members, but none are involved in investment management. Additionally, the firm has not applied for a private fund management licence, which would enable the launch of an onshore fund.