BOSTON (Reuters) - If plunging markets during Wednesday’s U.S. trading session proved unlucky for investors, the timing was especially bad for Vanguard Group Inc.
Its main website conked out before trading even started, the Uptime.com outage-tracking service showed, presaging a day of problems for clients of the largest mutual fund company.
A spokesman for Pennsylvania-based Vanguard, John Woerth, said via email that a “connectivity issue lasted through the day resulting in intermittent access issues,” but did not give details such as how many users were affected or exactly what caused the problems. He said most clients were able to transact by phone or online.
Service glitches are a sensitive topic for Vanguard, which manages more than $5 trillion but has struggled at times to show its systems can keep pace with a rush of new money from clients looking to buy shares of its low-cost index funds.
Other companies have also had trouble during volatile trading in the past but on Wednesday spokespeople for two of them, Fidelity Investments and TD Ameritrade, reported no issues.
Woerth said Wednesday’s problems “were unrelated to volumes” even as traders spooked by rising U.S. Treasury yields and fears of a deepening U.S.-China trade conflict sold shares causing the benchmark S&P 500 index to fall 3.29 percent on Wednesday, its worst one-day decline since February.
Well before U.S. markets opened, the Vanguard.com site went down for about a minute just before 6 a.m EDT (1000 GMT), according to Uptime.com. Around the same time, users on the Bogleheads.org online investing forum, named for Vanguard founder John Bogle, started sharing log-in troubles. “Not a great feeling when you can’t access your accounts,” one wrote.
Woerth said the outage was related to the connectivity issues, which other users commented about during the day including Dan Wiener, editor of a newsletter for Vanguard investors, who said his screen froze when he tried to make a trade in the afternoon.
Avivah Litan, vice president at research firm Gartner, said via email that the problem “sounds like a hiccup with their network that could be related to maintenance.”
But even if it was bad luck that the issue blew up during heavy trading, Litan said, being offline on a weekday is mostly unacceptable for a large financial firm.
“Sometimes downtime is acceptable during the wee hours of a weekend – for example 2 a.m. Sunday morning,” she said.
Reporting by Ross Kerber; Editing by Christian Schmollinger