Research library

For many families, planning for college costs is a top financial priority. A Byzantine landscape of consumer choices, loans, tuition discounting, and public and private aid, however, makes it difficult to answer key questions like "How much will this cost us?” This is especially so for young families, for whom future spending needs are necessarily vague. Vanguard researchers explore how understanding the dynamics of financial aid and net pricing can help parents set a realistic savings target early on and shape a savings plan that evolves with them. 

A number of factors have fueled the growth of index investing around the world. “The case for low-cost index-fund investing,” a newly revised research paper from Vanguard’s Investment Strategy Group, explores these factors. The paper discusses why the authors expect that index investing will continue to be effective over the long term. 

The past few decades were a good time for spending from a retirement portfolio. What about the next 30 years? The apparent shifts in capital market conditions seen since the start of 2022 led us to examine sustainable withdrawal rates. Looking at historical return environments our authors developed three scenarios, with rates from 2.8% to 3.3%.

Vanguard believes private corporate pension plans should consider a liability-driven investing (LDI) program in the fixed income portion of their portfolio. Based on our analysis, a customized mix of U.S. investment-grade credit bonds and Treasuries aligns well with that liability. Such a mix has historically helped plan sponsors mitigate risk.

Personalized indexing (PI) is a flexible portfolio management solution that can track a personalized index and harvest capital losses for tax-saving purposes. This paper presents a portfolio construction plan using PI, touching on how to optimally implement tax-loss harvesting and allocate to PI in the presence of other assets.

Investors typically decide whether to convert to a Roth IRA from a traditional IRA by comparing their current and expected future marginal tax rates. The traditional wisdom has been that higher future tax rates make conversion more desirable and lower ones make it less so. Vanguard researchers describe a break-even tax rate (BETR) that yields a more accurate view of what future tax rate would make an investor indifferent to a conversion.

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 Journal of Beta Investment Strategies.

Investors prefer some aspects of human advice over digital but perceive value in all advice services. Technology can help human advisors scale their businesses while strengthening their uniquely human value proposition.

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.

Retirees often eschew investing for total returns, relying instead on dividends and interest from high-income-producing assets to support spending from ad hoc portfolios. We introduce a method for building high-income portfolios that maximize the investor’s utility of wealth based on total returns while accounting for yield preferences.

Our annual forecast explains why we expect the global economy to slow, leaving full-year 2022 growth, in our base case, of 4.8%. It also explains why our 10-year market outlook is guarded, as reflected in the low-single-digit range of expected returns for a globally diversified, 60% stock/40% bond portfolio.

Vanguard’s Megatrends series examines fundamental shifts in the global economic landscape that are likely to affect the financial services industry and broader society. In this paper, Vanguard economists examine global trade growth and conclude that growth will likely slow, as it has since the global financial crisis, but not decline.

In this paper, Vanguard researchers examine investing behavior in 1.8 million 529 plan accounts holding $53 billion in assets. The findings: Accounts using automatic investment methods exhibit the most consistent savings behavior, and those using age-based allocations have substantially less portfolio risk than self-directed ones. 

Technology advances have spawned fear that they eliminate jobs. New Vanguard research finds more room for optimism.

ETFs can be useful tools for investors building their portfolios. A Vanguard commentary explores their role in portfolio construction and in providing market liquidity and market information.

A new Megatrends paper explores equilibrium interest rates, the forces that shape them, and where they may be headed.

Our experts provide insights into who has retired during the pandemic and whether these retirees might need to return to the workforce.

Recent Vanguard research indicates that gender diversity on a fund’s investment team may offer performance benefits. The findings underscore the benefit of evaluating the diversity of an investment management team with the same rigor we do portfolio diversification, recognizing the meaningful impact that both can have on fund performance.

Even the most groundbreaking technological innovations can experience a lag between discovery and the implementation of a commercial application. That lag—along with current social, economic, and technological conditions—can have vast implications on the broader economy.

We summarize in two pages the conditions of five major economic blocs and provide 10-year return forecasts for major asset classes.

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

This paper presents a methodology for estimating the trading volume on U.S. exchanges attributable to index funds, index ETFs, and other indexing strategies. Vanguard researchers estimate that index funds and index ETFs currently account for approximately 1% of overall trading volume on U.S. exchanges, well below the more widely quoted 5% to 7%.

Using four hypothetical case studies, a new Vanguard research paper, The Value of Personalized Advice, provides insights into how to think about and measure the value of financial advice for individual clients.

Regulation, fee, and technology trends in the advice industry may get all the attention, but it’s still soft skills and relationships that will distinguish advisors from others. Learn more from the latest in the Vanguard Advisor’s Alpha series.

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

Vanguard Financial Advice Model (VFAM) is a new approach to financial planning, assessing combinations of strategies and their relative value for an investor.

A new Vanguard research paper outlines an approach to determining life insurance needs that could save thousands of dollars while minimizing the chances that coverage falls short of those needs.

A recently updated research paper makes the investment case for Vanguard target-date funds and offers insights into the role these strategies can play in the portfolios of different types of investors.

As direct indexing accelerates in popularity among investors, one of its measurable benefits is the ability to implement a systematic tax-loss harvesting (TLH) strategy. Vanguard researchers examine the value of different modes of TLH for direct indexing investors to determine which is the most effective. The paper was published in The Journal of Beta Investment Strategies.

Our research shows that an annual rebalancing is optimal for investors who don’t participate in tax-loss harvesting or where maintaining tight tracking to the multiasset benchmark portfolio is not a concern.

Understanding your health care priorities and available coverage types can help you choose a Medicare coverage option, according to Vanguard researchers.

Americans donated $471 billion to charitable organizations in 2020. Vanguard research explores the three key elements of a successful giving plan: When to give, what to give, and how to give.

Our Megatrends series examines fundamental shifts in the global economy likely to affect the financial services industry and society. In this edition, Vanguard explores the economic implications of an unprecedented shift in the age of global populations toward a smaller young-age cohort and a larger old-age cohort.

In this article published in The Journal of Portfolio Management in 2018, Vanguard researchers describe an enhancement to a standard approach of forecasting U.S. stock market returns. Starting with the cyclically adjusted price-to-earnings (CAPE) ratio, they incorporate bond yields, inflation, and volatility into the calculations. The authors find that results from this “fair-value” CAPE forecasting model, while not perfect, are about 40%–50% more accurate than conventional methods for 10-year-ahead stock market forecasts since 1960.

Key components for efficient tax savings: threshold planning, capital gains, income exclusions, and deductions.

Our updated research examines saving and investing behavior in 1.9 million 529 plan education savings accounts.

Updates are provided on our 2023 outlook for growth, inflation, and central bank policies, plus 10-year asset class return forecasts.

In its 22nd edition, How America Saves provides an in-depth examination of the retirement plan data of nearly 5 million defined contribution plan participants.

Our research explores practical ways to build savings for an emergency while balancing long-term financial goals.

Selectively adding a credit tilt to the bond portion of a portfolio can enhance long-term expected returns.

This paper highlights some of the generational differences we have observed in our recordkeeping data over a 15-year period as a result of automatic solutions. We answer the question: How have generational patterns of saving and investing changed in DC plans?

Our research offers a framework to help maximize wealth by taking advantage of your investment options alongside repaying debt.

This paper compares the performance of cost averaging with lump-sum investing as strategies for investing cash.

Relocating to a cheaper housing market can help retirees bolster retirement readiness, Vanguard research finds.

Our research considers ways to measure inflation based on the specific circumstances of an individual and how to build portfolios that seek to minimize the risks of rising costs.

A small commodities position may improve an investor’s outcome while adding resilience to a portfolio.

Pension plan sponsors considering a risk transfer should look beyond immediate benefits and consider the impact on the management of the remainder of the plan, according to Vanguard experts.

The prospect of saving for long-term financial planning goals can be overwhelming at times given its enormity and uncertainty. Vanguard’s guide to financial wellness offers a blueprint for achieving financial flexibility to meet both short- and long-term goals.

Studies of ESG investment strategies have tried to identify an ESG-related factor to explain performance, but Vanguard research reveals that the performance of many ESG investment strategies is largely driven by well-known traditional sources of risk. We found quite a bit of variability in the exposure to and influence of the factors explored.

Our base case for 2023 includes a global recession brought about by policymakers’ efforts to control inflation. Unemployment is likely to rise and consumer demand weaken, but central banks may still miss their targets of 2% inflation in 2023.

Sustainable withdrawal rates can vary considerably, depending on the levels of desired bequests, portfolio depletion risk, and asset allocation, highlighting the need for customization rather than relying on a single rule of thumb. Learn more about the feasible ranges.

There’s no place like home, even when it comes to stock investing. Recent Vanguard research discusses investor local bias, what that disposition means for a portfolio, and how a few small tweaks can alleviate a portfolio’s concentration risk.

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

A new Vanguard research paper, Revisiting the conventional wisdom regarding asset location, takes a second look at best practices for asset location and whether they are appropriate for investors.

The Vanguard Life-Cycle Investing Model is a proprietary model for glide-path construction that can assist in the creation of custom investment portfolios for retirement and nonretirement goals. This paper describes the model, the benefits of a customizable, goals-based approach, and practical applications in product design and advice methodology. 

This paper presents a framework, developed by Vanguard and Mercer, to forecast health care costs for U.S. retirees. Vanguard researchers outline key health care cost factors and personal considerations and frame expenses as an annual cost rather than a lifetime lump sum, enabling retirees to plan accordingly during their retirement years.

Vanguard’s Megatrends series examines fundamental shifts in the global economic landscape that are likely to affect the financial services industry and broader society. In this edition, Vanguard analysis suggests a productivity increase of 1.2% annually over the next five years, resulting in higher wages, profits, and living standards.

A new research paper in Vanguard’s Megatrends series examines the possible economic effects of climate change. Our research considers the direct physical impact of higher temperatures, the effect of stricter policies aimed at curbing greenhouse gas emissions, and the economic boost from “green investment.”

Parents and students face distinct challenges when financing higher education expenses. This research paper discusses financial aid options, tax credits, and 529 savings plans and other savings vehicles, as well as the need to plan strategically and understand how college spending decisions affect one's broader financial situation.

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

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

Job changes often come with higher pay but a lower saving rate. Our research shows how 401(k) plan sponsors and policy makers can help workers keep their savings momentum.

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

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

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

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

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

A new 401(k) provision may allow for short-term liquidity without sacrificing participants’ retirement outlook. Plan design is the key.

Vanguard research on setting expectations and maximizing the probability of success when using a tax-loss-harvesting strategy.

This paper explores how investors can build additional wealth through tax savings by using a 529 plan for K–12 tuition.

In its 23rd edition, How America Saves provides an in-depth examination of the retirement plan data of nearly 5 million defined contribution plan participants across our recordkeeping business.

Vanguard researchers introduce a proprietary model for quantifying the likely economic effects of megatrends.

A look at hybrid annuity target-date funds as a potential solution for participants saving for retirement.

Vanguard research proposes a set of criteria to help employers evaluate their 401(k) match.

Vanguard experts explain the appeal of muni bonds, which extends well beyond any potential tax advantages.

While holding cash can provide a sense of security, it can come at a cost.

Our research into years of daily stock-level data suggests that U.S. equities are resilient to periods of volatility and that liquidity remains available under all market conditions.

A return to sound money, with interest rates above inflation, is the best financial market development in 20 years.

In this paper, Vanguard espouses four simple and enduring principles to help investors achieve long-term success. Goals: Create clear, appropriate investment goals. Balance: Keep a balanced and diversified mix of investments. Costs: Minimize costs. Discipline: Maintain perspective and long-term discipline.

Our research looks at the role factors can play in shaping a portfolio’s performance and risk profile.

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

We consider the “loss harvest profile” of direct indexing over time, focusing on volatility and cash contributions.

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

A Vanguard analysis assesses retirement readiness for a nationally representative sample of American workers.

The benefits of HSAs aren’t limited to just covering medical expenses, according to updated Vanguard research.

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