Just having a conversation with my brother where we realised we both have no understanding of what protects that money from being stolen by the fund themselves?
In: 1
They’ll get caught.
A large fund like that, in order to be listed on stock exchange at all, has to be registered with the exchange and the government, including names/contact details for the company officers, address of the company, etc. This makes it awfully easy for the government to come and find you if you steal a bunch of money. And a big fund manager like Vanguard has billions and billions of $…they *will* find you.
Once in a while, one rogue employee does try to do this, or something like it. Then not only are the police hunting them, the company will to, because if they don’t catch them then the entire company is screwed…nobody will invest their money in a fund that can’t keep it safe. It’s the same reason banks don’t take off with your money (which they can do)…they’ll never get to be a bank again and being a bank is more profitable than any realistic single theft they can perpetuate.
This is a really good reason to *not* invest in shady funds that aren’t on real exchanges…many of your protections are gone.
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