Timely insights and observations

New Vanguard research explores how investors are increasingly using passive funds to build active portfolios.

Not converting to a Roth because you expect to be in a lower tax bracket at retirement? An analysis using the break-even tax rate (BETR) finds that you may be missing out on tax advantages.

Even for investors who buy stocks for their long-term growth potential, sharp drops can still be hard to stomach. Here are some things to keep in mind if a market tumble makes you feel the need to “do something.”

Our scenarios-based approach to forecasting amid war in Ukraine acknowledges that we can’t predict the future.

Chief Economist Joe Davis explains why market volatility and downturns happen and why they’re an integral part of investing.

Vanguard’s annual All Cans on Deck drive supports hunger relief agencies in our communities and around the world.

Cryptocurrency has become a hot investing topic recently. Chief Investment Officer Greg Davis weighs in with his views on the value of crypto and the technology behind it.

Our quarterly in-depth commentary offers a sector-by-sector analysis and a summary of how our views affect the Vanguard active bond funds.

Vanguard experts discuss the Fed’s balance sheet reduction plan compared with previous quantitative tightening and potential implications.

In this panel discussion hosted by Portfolio Management Research, Jim Rowley Jr., CFA, head of investor research in Vanguard Investment Strategy Group, offers his perspective on direct indexing.

The litany of economic and market woes may tempt investors to go all cash, but that’s virtually ensuring a negative return when adjusted for inflation. Patience has historically been the key to portfolio success.

How is diversity, equity, and inclusion embedded in Vanguard’s culture? Vanguard Chief Diversity Officer Crystal Hardie Langston discusses that and more.

Vanguard research explores how investors can implement direct indexing in a portfolio and explains why tax-loss harvesting frequency is a major factor in this process.

In this panel discussion hosted by Portfolio Management Research, Jim Rowley Jr., CFA, head of investor research in Vanguard Investment Strategy Group, offers his perspective on how investors are using passive strategies for active exposures.

Vanguard’s European chief economist, Jumana Saleheen, says central banks face a stiff test in trying to control inflation and ward off recession.

In this panel discussion hosted by Portfolio Management Research, Jim Rowley, head of Investor Research in Vanguard Investment Strategy Group, offers his perspective on why the indexing/active decision is not a binary choice.

We expect economic growth in 2022 to range from about 2.5% in the euro area to about 5.5% in emerging markets overall, though war in Ukraine raises uncertainty. Our return forecasts are muted, but there may be opportunities for investors willing to bear extra risk.

In this second of two Q&As, John Galloway discusses Vanguard’s views on climate change and the role that effective stewardship will play throughout the energy transition to mitigate the financial threat to long-term investors.

Investors prefer some aspects of human advice over digital but perceive value in all advice services, a Vanguard survey finds. For these reasons, it is critical that they have access to a wide range of advice services.

Should you adjust your asset mix as inflation persists? Vanguard Global Chief Economist Joe Davis weighs in.

Vanguard has an important role to play in engaging and encouraging real progress by portfolio companies to mitigate the potential consequences of climate change. 

Vanguard was recently announced as a founding member, and the sole asset management company presence, of the Global Parity Alliance, a group dedicated to advancing DEI across multiple industries.

This piece describes how understanding changes in volatility, stock-bond correlation, and inflation can affect a retirement withdrawal strategy.  It draws from research set to publish in The Journal of Retirement later this year, “Sustainable Withdrawal Rates by Return Environment: A Time-Varying Bayesian Analysis”. Andy Clarke, CFA and Kevin Khang, PhD are featured throughout.

A new analysis by Vanguard economist Adam Schickling suggests workers will continue to leave jobs of their own accord at a high rate through 2022, and that will likely keep wage growth elevated.

With the rollout of 5G networks, we see more value in fixed income among wireless telecoms and cell tower operators than in technology and digital media companies. 

Vanguard’s investment stewardship efforts in 2021 include global advocacy, engagement, and voting activities.

An inverted yield curve doesn’t necessarily foreshadow a recession, according to Vanguard’s Andrew Patterson and John Madziyire.

Vanguard funds have had limited exposure to Russian securities. A chart presents Vanguard funds with direct exposure, as well as the extent of their exposure, as of March 31, 2022.

Vanguard funds have had limited exposure to Russian securities and will adhere to sanctions against Russia.

Maria Bruno, head of U.S. wealth planning research at Vanguard, offers five suggestions for investors making IRA contributions during tax season. Maybe the most important tip? Contribute early.

While current valuations leave some room for upside, we believe identifying and avoiding downside surprises will be key.

Investing in high-yield corporate credit is a lot like investing in its investment-grade counterpart. The difference really lies with where the key risks are.

During this time of uncertainty, we are supporting our investors, employees, and those most directly affected by the war in Ukraine.

Vanguard CEO Tim Buckley and Nick Eisinger, co-head of emerging markets active fixed income, discuss the impact of the war in Ukraine on emerging markets and the associated risk. They also discuss the monetary policy outlook ahead of key meetings in the U.S. and Europe.

Higher oil prices resulting from events in Ukraine are likely to trim economic growth and accelerate inflation to levels beyond what was previously expected.

Vanguard CEO Tim Buckley explains how cutting expense ratios—an integral part of our corporate philosophy—aligns with our unique corporate structure.

Events in Ukraine understandably test investors’ resolve. At such a time, it’s best to take emotions out of investing.

In this first of two Q&As, John Galloway, global head of Vanguard’s Investment Stewardship team, discusses corporate governance practices and how Vanguard addresses ESG risks that can affect long-term shareholder value in its equity funds.

Markets have come under pressure amid heightened geopolitical risks. In times like these, often the best strategy is to stay focused on your goals and maintain your disciplined approach.

Vanguard expects China to set its 2022 growth target in the 5% to 6% range at its annual policy proceeding in March. The announcement will say a lot about a Chinese economy at a crossroads.

Markets have come under pressure amid perceived new risks. Now is a time to maintain your fortitude and remain focused on your long-term goals.

Vanguard Chief Investment Officer Greg Davis discusses some reasons why investors have gravitated toward exchange-traded funds in recent years and why mutual funds still play a vital role for some types of investors.

Sara Devereux, head of Vanguard Fixed Income Group, discusses what to expect over the next few years based on a recent Fed announcement about raising rates.

Vanguard Chief Investment Officer Greg Davis discusses recent developments in the global economy and our return expectations for the U.S. equity markets.

Vanguard CEO Tim Buckley discusses tangible and intangible aspects of how companies are valued and shares his thoughts on meme stocks and cryptocurrency.

Vanguard Chairman and Chief Executive Officer Tim Buckley, Vanguard Chief Investment Officer Greg Davis, Head of Vanguard Fixed Income Group Sara Devereux, and moderator Massy Williams, head of strategic operations for Vanguard Financial Advisor Services, discussed Vanguard’s economic and market outlook for 2022 and answered audience questions.  

Lowering the cost of investing has always been Vanguard’s mission. We’re well on our way to saving shareholders $1 billion in fees and expenses by 2025.

Learn how Vanguard’s partnerships with academic institutions have been mutually beneficial and helped develop practical solutions for investors.

Heightened volatility and market losses early in 2022 emphasize the value for investors of a long- term focus.

ETFs are enjoying explosive growth because they offer potential advantages that include flexibility, diversification, lower costs, and potential tax benefits. To understand why the ETF market is efficient and resilient at a time of record inflows, rising assets, and market volatility, explore a process that includes a number of market participants working together to meet investor demand.

With inflation at multidecade highs, the Federal Reserve appears prepared to raise its key interest rate target, perhaps as early as March. Vanguard economists Josh Hirt, Asawari Sathe, and Adam Schickling discuss the Fed’s considerations.

Central banks will need to act decisively to rein in accelerating inflation, according to Joe Davis, Vanguard’s global chief economist. Long-term, that’s good for investors.

Our 2022 Vanguard Economic and Market Outlook focuses on new sources of risk for the economy and financial markets, including stretched valuations for equity markets, rising interest rates, and an uncertain inflationary environment.

Semiconductor shortages have been making an impact around the world. From a credit perspective, though, we are cautious on the semiconductor industry. With bond valuations of chip manufacturers becoming extremely tight, we see more value downstream among their customers, especially industrial equipment manufacturers. 

Vanguard research suggests that the office is not going away, it’s evolving. Investing in office space, though more complex, may give active managers with deep fundamental analysis capabilities opportunities for outperformance. The return to work is likely to result in a new office normal that will vary by region, industry sector, and property class.

Vanguard offers perspective on U.S. stock valuations, the next peak in the Federal Reserve’s target for short-term interest rates, the property sector in China, and the COVID-19 Omicron variant.

Personalized, realistic projections of longevity and health care costs in retirement could provide a better foundation for planning than conservative assumptions.

A recently updated Vanguard research paper on paying for college discusses why it’s important for parents and students to plan strategically and understand how their spending decisions affect their broader financial situation. 

Higher yields can lead to improved total returns from bonds if an investor’s horizon exceeds their bond portfolio’s duration.

Comparing today’s environment with that of the 1970s overlooks a key difference: today’s strong demand for labor.

China’s economy has grown since the 1990s from being a tenth of the size of the U.S. economy to close to two-thirds the size. This raises some natural questions, including, “When might China become the world’s largest economy?” and “What are the potential portfolio implications of such a new economic order?”

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.

New research finds that global trade growth is likely to slow—but not contract—in the decade ahead. What’s more, we believe the implications for investors may not be as great as they seem. 

Markets weren’t too surprised to see a run-up in inflation in much of the world in 2021. But readings have been hotter than forecast. With accommodative monetary and fiscal policies expected to remain in place for some time, could elevated rates of inflation persist in 2022 and beyond?

Analysts in our Fixed Income Group examine the market of crossover bonds—investment-grade bonds recently downgraded to high yield (fallen angels) and their opposite (rising stars). Such issues, which ballooned amid a wave of credit-quality downgrades in the pandemic’s opening days, historically have offered attractive risk-adjusted returns.

The forecasts by Vanguard's global economics and markets team inform the longer-term allocation decisions in our multiasset and advice offers. We hope they also help clients set their own reasonable expectations.

A Vanguard survey of nearly 2,500 investors found a tendency to underestimate the financial risks of cognitive decline, particularly among women. We discuss the implications for investors and their agents and advisors. 

Vanguard assesses the fixed income ecosystem during the height of the COVID-19 volatility, including the liquidity crush and investors’ “dash for cash,” and offers high-level policy recommendations for the path forward.

A strong upswing in U.S. employment should unfurl in the coming months, paving the way for a full labor market recovery by mid-2022. Josh Hirt, a Vanguard economist, explains.  

The economy and markets have recovered at a faster-than-anticipated pace from the pandemic. But the global outlook continues to hinge on health outcomes, according to Vanguard’s midyear forecasts.

With net interest income—traditionally banks’ bread-and-butter business—continuing to decline, many bankers have been trying to adapt by seeking revenue opportunities elsewhere. New business models, though, have brought new challenges in assessing their credit fundamentals.

Sara Devereux became global head of Vanguard Fixed Income Group (FIG) on July 1, 2021, succeeding John Hollyer, who stepped down after more than 30 years at Vanguard. In this interview, the two leaders join Vanguard Chief Investment Officer Greg Davis in a discussion about the bond market, Sara's plans for FIG, and John's extraordinary Vanguard career.

John James, head of Vanguard Institutional Investor Group, looks back at the 20-year history of How America Saves. Our seminal report has provided key insights on the defined contribution landscape and ultimately helped to improve investors’ retirement readiness.

Vanguard believes that environmental, social, and governance (ESG) risks can have a material impact on the long-term investment success of our fund’s shareholders. We explain how ESG considerations are incorporated into our product launch decisions and investment strategies.

As newly vaccinated individuals unleash their pent-up demand for goods and services, questions naturally arise about resurgent inflation and interest rates, and what central banks will do next. Our research indicates that central bank policy rates and interest rates more broadly are likely to rise, but only modestly, in the next several years.

Given low bond yields and high stock valuations, shortfall risk is almost a given in today’s market. We explore factors that influence the ability of investors and institutions to meet their financial goals and discuss circumstances in which private equity could help. 

Value stocks have lagged growth stocks for the past 10 years, but a relative-performance reversal could be in the offing. Value could outperform growth over the next decade by as much as 5% to 7% per year, according to Vanguard research.

In this blog, Vanguard Global Chief Economist Joe Davis explains why inflation has been heading higher, why persistent inflation is a threat, and the implications for Federal Reserve policy.

Vanguard Americas Chief Economist Roger Aliaga-Díaz addresses three common bond myths and discusses why fixed income can still make sense amid rising rates and inflation.  

Recognizing that many investors are concerned about inflation and considering options to help maintain the real values and yields of their portfolios, we look at the prospects for inflation over shorter and longer horizons and the case for investing in U.S. Treasury Inflation-Protected Securities.

Vanguard’s credit team evaluates the decline in corporate leverage from its highs during the COVID-19 pandemic, and concludes that the worst in terms of credit deterioration is likely behind us. 

One year after a COVID-19-driven spike in market volatility, a Vanguard ETF capital markets specialist, David Sharp, reflects on the resilience that ETFs displayed—and highlights bond ETFs’ critical role as a source of market liquidity.

Cryptocurrencies have attracted much attention and more than trace amounts of speculation. Roger Aliaga-Díaz, our chief economist for the Americas and head of portfolio construction, cautions investors, noting among other risks that cryptocurrencies are largely unregulated.

The Federal Reserve left its target for the benchmark federal funds rate unchanged at its March 17 meeting. Its approach to inflation and the labor market means rate hikes may be a way off.

Vanguard’s head of factor-based strategies discusses Vanguard research about the role daily portfolio rebalancing can play in capturing the potential benefits of investing in stocks with high degrees of exposure to value, quality, and momentum characteristics.

It’s hard to identify an asset bubble before it bursts. But Vanguard Global Chief Economist Joe Davis wonders about the valuations of cryptocurrencies and low-quality growth stocks. Ultimately, he argues, valuations should reflect “plausible future income” scenarios.

Conventional wisdom cautions against trading ETFs near the beginning or end of the trading day. But our research suggests this may be only half true. Here are some best practices that we believe can help ensure trades are executed at the best available price.   

Vanguard believes private equity investments have the potential to enhance long-term returns for investors who can accept the accompanying liquidity and manager risks. In this paper, the authors employ the Vanguard Asset Allocation Model to present a framework for assessing the merits of private equity in diversified, strategic portfolios.

Higher real interest rates should cool, but not stop, the labor market and the greater economy. And they bring longer-term benefits.

There are times when small-cap equities outperform large-caps and vice versa, but they are not expected to do so in any meaningful way over the long term.

New Vanguard research indicates that investors are frequently using non-total market index funds to build portfolios with active exposures, according to “How Investors Use Passive for Active,” a paper authored by Vanguard’s Jan-Carl Plagge, Haifeng Wang, and Jim Rowley. The paper was published in the The Journal of Beta Investment Strategies.

Vanguard global chief economist outlines the current draw of international equities as well as their enduring role as a diversifier in a portfolio.

Vanguard research suggests that certain sub-asset-classes have consistently outperformed during rising real rate environments.

Vanguard global chief economist expects fixed income returns to be modest over the next decade but doesn’t see a bear bond market on the horizon.

What’s behind the rapid rise in electronic bond trading and how has it been playing out for derivatives trading in our Fixed Income Group?

U.S. investors added $900 billion to ETFs in 2021. We examine the drivers of their popularity. 

The earliest college savers tend to require lower monthly savings rates over time, have more flexibility when they need to pivot, and get a jump start on understanding the nuances of the college tuition landscape—including the difference between sticker price and net price paid.

Learn about Vanguard’s investment philosophy and disciplined approach in a volatile market environment.

For many, the sticker price and net cost of college are vastly different numbers. What might your net cost be?

Vanguard has an important role to play to safeguard investors from material financial risks, including climate risk, and to mitigate potential harm to long-term shareholder value.

Following interest rate increases in early 2022, the tax-equivalent yield on municipal bonds is now greater than the yield of other major fixed income sectors.

Many retired early during the pandemic, but some may have to return to work. Are there other options to meet the savings gap?

In the rough start to 2022, the trading behavior of the vast majority of Vanguard clients indicates that they have stayed the course.

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.

Vanguard has downgraded economic growth forecasts for the U.S. and China, but recession isn’t likely.

A COVID-19 lockdown strategy that succeeded in the pandemic’s early days is likely to hold back China’s economy.

Vanguard Chief Diversity Officer Crystal Hardie Langston gets to the bottom of a common misconception about DEI and who can contribute.

The proprietary Vanguard Financial Conditions Index has tightened noticeably in recent months. Vanguard economists explain where financial conditions stand now and why it matters.

With surging inflation, the euro area will be hiking interest rates into positive territory later this year. Vanguard updates its forecasts for this year and next.

The Great Resignation was also the Great Retirement. For some, it may become the Great Sabbatical, as retirees return to work. Learn why from Vanguard’s latest research.

Vanguard Chief Investment Officer Greg Davis explains the key elements that set us apart—expertise, a disciplined approach, and a global presence.

The era of ultra-low neutral rates may be coming to an end as some of the drivers behind it are lessening or even reversing.

How are investors hedging against the surge in inflation? Our investment strategists looked at their usage of TIPS in 2021.

A Vanguard study using natural language processing of biographical data for fund investment teams finds higher performance from teams with gender diversity.