Vanguard believes material environmental, social, and governance (ESG) risks can impact long-term value creation in portfolio companies. As a result, ESG considerations are integrated into product design and investment processes across our funds.
Kunal Mehta, senior investment specialist, fixed income, and Loubna Moudanib, credit analyst in Vanguard's Fixed Income Group, explore the opportunities and risks in the growing universe of green bonds.
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.
The continued development of strategies to harvest factor returns in a low-cost manner has effectively raised the bar for many fundamental active managers who need to generate outperformance to justify their higher fees.