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.
There's been a lot to reckon with so far in 2020. It has made us all a bit more aware of the impact our choices have on others, and the world at large, and helped drive a new wave of interest in ESG as an investment category.
Since the first index fund was launched some 45 years ago, millions of investors across the world have taken advantage of this easy-to-implement investment vehicle that offers transparency, diversification, low-costs and tax efficiency.
This research paper presents a methodology for estimating the trading volume on US exchanges attributable to the portfolio management activity of index funds, index ETFs and other indexing strategies. We estimate that index funds and index ETFs currently account for approximately 1% of US trading volume.
This Vanguard research paper explores how tightening financial conditions and greater policy uncertainty influence the likelihood of recession. The paper also looks at the effects on US Federal Reserve interest rate policy.
Cycle-based factor-timing strategies require moving in and out of factors based on knowledge of which factors have performed best under various economic conditions. Investors must gauge their ability to identify the key inflection points in advance. Vanguardâ€™s new Global Macro Matters paper studies the success of basing such strategies on historical returns.