As inflation rises, so do the correlations of stock and bond returns. How much inflation would create an environment for positive correlations and diminished diversification in balanced portfolios? More than we expect to see.
For most investors, fixed income should be the part of their portfolio they can rely on – the solid bedrock that delivers stability, in good times and bad. The importance of consistency applies as much to active fixed income as it does to bond index exposures, but how can active bond fund managers generate alpha from asset classes like global credit or emerging market bonds that investors can rely on?
Vanguard researchers use a retirement planning framework to demonstrate that the addition of a second postretirement asset allocation to a TDF lineup can support a broader range of common retirement goals.
New Vanguard research considers the question of patience in active fixed income investing. Outperforming active fixed income funds have periods of underperformance, with differences seen across investment strategies.
Roger Aliaga-Díaz, Vanguard’s chief economist, Americas, and head of portfolio construction, explains why investors should maintain their bond positions even in an environment of rising interest rates.
A comprehensive analysis reviewing the portfolioâ€™s key exposures, performing scenario analysis and a forward-looking assessment is critical to evaluate a portfolioâ€™s quality relative to its benchmark and/or an investment alternative.