U.S. equities outperformed their international counterparts by 8 percentage points per year on average over the 10 years ended December 31, 2019. However, our proprietary Vanguard Capital Markets Model (VCMM) suggests that this outperformance is unlikely to persist over the next 10 years.
Based on promising signs that COVID-19 vaccines currently in trail are effectiveand production capacity allows for doses to be delivered early-to-mid-2021, Vanguardsees an increased likelihood of the U.S. economy reaching pre-COVID-19 output levelsbefore the end of 2021.
Beyond the uncertainty surrounding the ongoing global Covid-19 pandemic, we see room for market volatility to increase heading into year-end. The US election, a stalled US fiscal relief package and complications around Brexit all have the potential to weigh on investor sentiment and move market prices.
U.S. presidential elections typically don't have a long-term effect on market performance. So how should investors position their portfolios ahead of the 2020 election? This video shares Vanguard's views.
With initial credit market adjustments to the pandemic behind us, Vanguard's credit analysts outline further opportunities for active management to add value, including within some of the more COVID-affected sectors.