The Investment Strategy Group (ISG) is a global team that serves as Vanguard’s in-house think tank, with subject matter experts based in North America, Europe, and the Asia-Pacific region. The team produces industry-leading research to help shape perspectives, plays a central role in developing Vanguard’s investment and advice methodology, and informs decisions about our investment offerings and strategies.
A broad range of mainstream investment strategies, from index investing and active management to factor-based investing, ESG, private equity, and alternatives.
Portfolio construction methodology and asset allocation research, including the development and refinement of single-fund options, multiasset funds, model portfolios, and portfolio construction strategies adopted by our investment advice services.
Analysis of the macro- and microeconomic dynamics playing out across the global landscape, including perspectives on monetary and fiscal policy, market conditions, and related investment considerations.
Vanguard capital markets modeling
Development and oversight of Vanguard’s forecasting models, which simulate projected asset return, cross-correlation, and volatility distributions of global asset classes used in allocation optimization, life-cycle, and advice models, and timely perspective on drivers of asset returns and other relevant market topics.
The behavioral sciences aspects of investing, including analysis of the activity and trading of Vanguard’s investor base, the value of advice through both human and digital delivery channels, and the decision-making mechanisms that lead to better investor outcomes.
Practical and topical retirement matters in areas ranging from broad sociodemographic and policy trends affecting the retirement landscape to research on optimal retirement-planning strategies for individuals.
All aspects of an individual’s financial life, including wealth and estate planning, tax strategies, health care, philanthropy, and family legacy goals.
As part of Vanguard’s Investment Management Group, ISG advises Vanguard's portfolio managers, particularly in the Fixed Income Group, on the macroeconomic outlook, monetary policy, and other matters to support the management of the Vanguard funds. This approach has aided Vanguard active funds in seeking to deliver superior, sustained performance over time relative to peer groups.
ISG forecasting and modeling platforms also support our investment and advice methodologies, bringing rigor, objectivity, and consistency to Vanguard’s portfolio construction recommendations. This includes influencing the asset allocation of our single-fund options, including target-date funds, life-cycle funds, and ETF model portfolios, as well as advice offerings, including Vanguard Personal Advisor Services® and Vanguard Digital Advisor in the United States and investment advisory services for individual consumers in China and the United Kingdom.
Vanguard thought leadership efforts are not confined to our global campuses. Our researchers frequently collaborate with academics at leading institutions—including Carnegie Mellon University, Columbia University, Georgetown University, the University of Michigan, New York University, Stanford University, the Wharton School of the University of Pennsylvania, and Yale University—as well as industry associations, including the Investment Company Institute and the European Fund and Asset Management Association. Various projects have been completed on assessing trends and developments in retirement-plan design and investor behaviors as well as regular surveys of investors’ views and beliefs.
ISG helps shape a broader industry agenda through interactions with policy-makers, academics, retirement-plan sponsors, financial intermediaries, and other investment professionals. ISG’s research and insights are frequently sought after and welcomed for their candor, investor-centricity, and, at times, contrary nature.
Vanguard thought leaders analyze the global markets, economies, asset classes, and investor behavior to produce rigorous primary research on a broad range of topics important to investors and the industry alike.
Our “research edge” emanates from proprietary forecasting models, a differentiated approach, and deep expertise, which aid investor decision-making with empirical, academic-caliber research through a practitioner’s lens.
Vanguard ETF Shares are not redeemable with the issuing Fund other than in very large aggregations worth millions of dollars. Instead, investors must buy and sell Vanguard ETF Shares in the secondary market and hold those shares in a brokerage account. In doing so, the investor may incur brokerage commissions and may pay more than net asset value when buying and receive less than net asset value when selling.
All investing is subject to risk, including the possible loss of the money you invest. Be aware that fluctuations in the financial markets and other factors may cause declines in the value of your account. There is no guarantee that any particular asset allocation or mix of funds will meet your investment objectives or provide you with a given level of income.
The Factor Funds are subject to investment style risk, which is the chance that returns from the types of stocks in which a Factor Fund invests will trail returns from U.S. stock markets. The Factor Funds are also subject to manager risk, which is the chance that poor security selection will cause a Factor Fund to underperform its relevant benchmark or other funds with a similar investment objective, and sector risk, which is the chance that significant problems will affect a particular sector in which a Factor Fund invests, or that returns from that sector will trail returns from the overall stock market.
ESG funds are subject to ESG investment risk, which is the chance that the stocks or bonds screened by the index sponsor for ESG criteria generally will underperform the market as a whole or that the particular stocks or bonds selected will, in the aggregate, trail returns of other funds screened for ESG criteria.
Investments in target-date funds are subject to the risks of their underlying funds. The year in the fund name refers to the approximate year (the target date) when an investor in the fund would retire and leave the work force. The fund will gradually shift its emphasis from more aggressive investments to more conservative ones based on its target date. An investment in target date funds is not guaranteed at any time, including on or after the target date.
Vanguard does not, and will not, make any representations about whether a model portfolio is in the best interest of any investor; is not, and will not be, responsible for the determination of whether a model portfolio is in the best interest of any investor; and is not acting as an investment advisor to any investor.
IMPORTANT: The projections and other information generated by the Vanguard Capital Markets Model regarding the likelihood of various investment outcomes are hypothetical in nature, do not reflect actual investment results, and are not guarantees of future results. VCMM results will vary with each use and over time.
The VCMM projections are based on a statistical analysis of historical data. Future returns may behave differently from the historical patterns captured in the VCMM. More important, the VCMM may be underestimating extreme negative scenarios unobserved in the historical period on which the model estimation is based.
The Vanguard Capital Markets Model® is a proprietary financial simulation tool developed and maintained by Vanguard’s primary investment research and advice teams. The model forecasts distributions of future returns for a wide array of broad asset classes. Those asset classes include U.S. and international equity markets, several maturities of the U.S. Treasury and corporate fixed income markets, international fixed income markets, U.S. money markets, commodities, and certain alternative investment strategies. The theoretical and empirical foundation for the Vanguard Capital Markets Model is that the returns of various asset classes reflect the compensation investors require for bearing different types of systematic risk (beta). At the core of the model are estimates of the dynamic statistical relationship between risk factors and asset returns, obtained from statistical analysis based on available monthly financial and economic data. Using a system of estimated equations, the model then applies a Monte Carlo simulation method to project the estimated interrelationships among risk factors and asset classes as well as uncertainty and randomness over time. The model generates a large set of simulated outcomes for each asset class over several time horizons. Forecasts are obtained by computing measures of central tendency in these simulations. Results produced by the tool will vary with each use and over time.
Vanguard Personal Advisor Services and Vanguard Digital Advisor's services are provided by Vanguard Advisers, Inc. ("VAI"), a federally registered investment advisor. VAI is a subsidiary of VGI and an affiliate of Vanguard Marketing Corporation ("VMC"). Neither VAI, VGI, nor VMC guarantees profits or protection from losses.