Vanguard, IBM explore quantum computing in portfolios

As quantum computing matures, this integrated capability may unlock new ways to optimize bond portfolios, enabling us to tackle greater complexity and provide tangible benefits for our clients.

“By embracing emerging technologies like quantum computing, Vanguard continues to evolve our services and products, while maintaining transparency and ethical standards,” said Mike Carr, Vanguard chief technology officer. Vanguard investment management and data scientists worked closely with IBM researchers, who contributed algorithms previously used to explore optimization problems in mRNA research for healthcare and life sciences.

“Our initial phase focused on exploring quantum algorithms that could be clearly compared with existing methods,” said Paul Malloy, Vanguard head of municipals. “By the end of the engagement, we successfully constructed a bond portfolio at a scale far exceeding our original expectations.”

The study demonstrates how quantum-classical hybrid workflows can match or even outperform traditional methods in solving large-scale, constrained optimization problems. The team used the IBM Quantum Heron r1 processor to construct realistic bond portfolios.

As part of our commitment to responsible innovation, we are integrating data, analytics, AI, and machine learning into our broader strategy. These technologies enable us to provide clients with solutions that are personalized, intelligent, and secure, helping them achieve positive financial outcomes while reducing operational costs, enhancing decision-making, and mitigating risk.

This collaboration with IBM is not just a technical milestone—it’s a testament to Vanguard’s vision for the future of investing.

To learn more about our quantum computing collaboration with IBM, read the blog and full paper here.