Portfolio construction

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.

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?

Vanguard makes the case for the benefits of a fund of funds structure for suitable individual investors to access the private equity markets. 

Allocating to TIPS requires skill as it’s difficult to predict the path of inflation and interest rates.

Vanguard’s James J. Rowley, Jr., CFA, analyzes the impact of market environment on active performance.

Our framework for cash investing takes into account risk tolerance, investment horizon, and funding levels.

Vanguard’s CEO and CIO discuss potential effects of our similar return expectations for equity and bond performance.

Emerging markets bonds are positioned to outperform much of the rest of the fixed income market in 2024.

Following an extended period of relatively low interest rates, Vanguard examines the benefits of investing in private equity amid rising interest rates.

Want to grow wealth over time? This medium-term forecast model may increase your chance of investment success.

Our TDF threshold-based rebalancing methodology can generate higher annual returns with reduced transaction costs.

Vanguard has a great track record of picking active managers. This paper explains how we do it.

Global credit markets can offer enhanced yield, often without an increase to credit or duration risk.

Vanguard examines the benefits of maintaining a consistent commitment strategy to fully capture the increased return potential and diversification benefits of private equity.

After losses in 2022, returns for the 60/40 portfolio are again positive, reaffirming this allocation’s benefits.

Joel Fried and Al Mordecai, portfolio managers for Vanguard PRIMECAP Fund, discuss the fund’s origins, philosophy, and portfolio.

At Vanguard, quantitative equity funds leverage science, data, and the human touch to help drive better outcomes.

Portfolio managers Halsey Morris and Anna Lundén of Wellington Management discuss their all-cap, multidisciplinary approach to security selection.

Optimizing a target-date rebalancing strategy that aims to improve long-term investor outcomes by managing risk.

U.S. stocks’ outperformance may raise doubts about global diversification, but there’s a fallacy in that argument.

Active management can help factor funds capture more of their target factor, increasing return potential.

Why active U.S. equity funds often fall short when their assigned style benchmark is in favor, and vice versa.

Bonds play a vital role in portfolios by providing stability and generating attractive yields, especially in uncertain market conditions.

Shifting economic factors have increased the appeal of sovereign debt over corporate in emerging markets.

Tech and data advancements have made strides for municipal indexing, living up to the “Bogle standard” for returns.

The low costs of Vanguard active fixed income ETFs can help portfolio managers take advantage of opportunities.

Market concentration has proved a headwind for active managers, but some have navigated it better than others.

This paper presents a comprehensive summary of systematic approaches for combining active managers in a portfolio. 

This paper provides a rigorous decision framework regarding the inclusion of index funds in your investment plan. 

This paper provides considerations that should be included in a rigorous decision framework regarding the inclusion of active funds in your investment plan. 

Our updated paper outlines a framework for deciding the optimal active-passive allocation based on four key variables.

Unlike others, our model explicitly assesses risk-return trade-offs across alpha, systematic, and factor risk dimensions. 

Unlisted real assets can play a role in multi-asset portfolios, but there are unique risks and selecting an outperforming manager is key.

The more popular ETFs become, the more important it is for investors to use the right trading strategies.

Rigorous evaluation and access to top talent at low cost help Vanguard choose active managers likely to outperform.

A proprietary model for glide-path construction that can assist in the creation of custom investment portfolios.

New research provides a foundational framework for considering index and active fund investing.

Read Vanguard's 2024 outlook on the private equity market, including our latest forecasts and perspectives.

High-flying stocks command investors’ attention. Do they affect market returns as much as the worst performers?

Our research quantifies the value of securities lending for the industry and at Vanguard.

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. 

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.

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