What happens to an ETF if the company managing it fails?
Summary of User’s Concern and Solutions Discussed:
- Main Problem: The user is concerned about what would happen to their VOO investment if Vanguard were to go bankrupt.
- Solution Offered: Fidelity representative mentioned that brokerage firms have rules in place to minimize financial failure and protect customer assets in the event of a failure.
- Additional Resource: A link to a Hot Topic post was provided, addressing common questions related to financial failures and asset protection.
Here’s the full thread
For example, If I owned VOO and Vanguard were to go bankrupt, (hypothetically of course, I’m sure they’d be bailed out), what happens to my VOO?
Thanks for reaching out to us on Discord.
While we aren’t able to speak on Vanguard’s specific processes if this were to occur, it may be helpful to know that brokerage firms are required to follow certain rules that are designed to minimize the chances of financial failure and, more importantly, protect customer assets if they do fail.
You may benefit from reading up on our Hot Topic post that goes over some common questions we’ve seen recently, which you can access below:
Addressing common questions related to Silicon Valley Bank failure, including FDIC v SIPC, Money Market holdings, and more: https://www.reddit.com/r/fidelityinvestments/comments/11qtkpj/addressing_common_questions_related_to_silicon/
Glad to hear there are some safeguards, and thanks for the link!
Would you be able to elaborate on what Fidelity’s policies around their own ETFs are? I own some ONEQ and FBCG.