Your Money

Investors fume over ‘evil’ Vanguard’s refusal to offer bitcoin ETFs

Fund giant sticks to its principles on type of investment it offers clients

Vanguard founder John Bogle, who launched the first index fund for ordinary investors in 1976, was no enthusiast for bitcoin. Photograph: Ryan Collerd/New York Times
Vanguard founder John Bogle, who launched the first index fund for ordinary investors in 1976, was no enthusiast for bitcoin. Photograph: Ryan Collerd/New York Times
Proinsias O'Mahony
Sat Jan 27 2024 - 06:00

Fund giant Vanguard attracted fevered online criticism after refusing to offer investors access to the recently launched bitcoin ETFs, saying it “doesn’t fit with Vanguard’s investment philosophy”. The outraged mood was encapsulated by investor Mike Alfred, who told his 146,000 followers on X (formerly Twitter) that Vanguard is part of an “evil empire” and is “on its way to the dustbin of history”.

Vanguard was “unrecognisable” from the innovative and investor-friendly firm founded by John Bogle, he added.

In reality, the decision of Vanguard, a non-profit firm owned by its investors, was both principled and unsurprising. Vanguard says a responsible portfolio should consist of assets like stocks, bonds and cash. Vanguard investors cannot access leveraged ETFs or gold ETFs, so a bitcoin ETF was never likely.

And as for the late John Bogle, he was wary of ETFs in general, believing they fostered trading. And bitcoin? Bogle said to avoid it “like the plague”.

Proinsias O'Mahony

Proinsias O'Mahony

Proinsias O’Mahony, a contributor to The Irish Times, writes the weekly Stocktake column