Strategic asset allocation matters

Vanguard research found that it would take considerably more inflation than we’re expecting to diminish the diversifying power of bonds in a balanced portfolio.

With stocks and bonds well into negative territory, it’s tempting to call the traditional balanced portfolio dead. But we’ve been here before, says Roger Aliaga-Díaz, chief economist for the Americas and head of portfolio construction in Vanguard Investment Strategy Group.

At best, you may marginally improve returns through market timing. At worst, you could drastically lower returns.

In a short video, Vanguard’s global head of portfolio construction contrasts time-varying and tactical asset allocation.

The past year was brutal for the 60/40 portfolio. But it helps to maintain perspective, looking back and forward.

Negative convexity has rejoined duration and credit as central considerations in active muni investing.

U.S. stock outperformance over the last decade has likely sown the seeds for their underperformance over the coming one.

Having a credit tilt in the bond portion of a portfolio can enhance long-term returns.

Our head of portfolio construction addresses the ongoing 60/40 debate in InvestmentNews.

Higher inflation can mean higher return correlation. But that doesn’t offset the benefits of balanced investing.

Vanguard research looks at whether we should change the fixed income home bias in target-date funds.

Misconceptions abound about the 60/40 portfolio. We set the record straight on what it is and how to implement it.

Learn why the current fixed income environment is a positive for long-term retirement investors.

Commercial real estate is under stress because of higher interest rates and remote work. Should investors be worried?

Valuation-aware, time-varying asset allocations can help investors reach their return targets.

Our research defies conventional wisdom on the asset location of equity subclasses to optimize after-tax returns.

Vanguard research considers investors who may benefit from target portfolios using valuation-aware, time-varying return forecasts.

Vanguard research shows how to optimize after-tax returns through placement of equity subclasses across accounts. 

Best way to hedge a portfolio against inflation? Research suggests a method but not without its own risks.

U.S. value stocks are poised to outperform U.S. growth stocks over the next ten years. Kevin DiCiurcio, head of the Vanguard Capital Markets Model® research team, explains why.

In this excerpt from a January 10, 2023, webcast, Vanguard’s CEO talks about a bellwether asset mix.

Time-varying asset allocation can help build diversified, tax-efficient portfolios, Vanguard researchers say.

A Vanguard white paper looks at ways to tailor portfolios to address specific investor goals and preferences.

With interest rates and inflation expected to rise, the negative stock/bond correlation that supports the diversification properties of a balanced portfolio could also be at risk. In this paper, researchers find that negative correlation will continue and the diversification benefits of a 60% stock/40% bond portfolio will persist.

Vanguard shares our current views on best practices for U.S. private-sector pension plan asset allocation. We highlight the value of identifying three targets—the return-seeking asset allocation, interest rate hedge ratio, and credit spread hedge ratio—that can be the foundation for a robust, customized portfolio construction process.

A new Vanguard research paper sheds light on how investors’ health state can affect their asset allocation and consumption in retirement.