The core-satellite approach to portfolio construction is a methodology used to combine actively managed funds with index funds in a single portfolio. The appeal of this approach is that it seeks to establish a risk-controlled portfolio while also securing some prospects of outperformance. The conventional view of the core-satellite methodology suggests it is [...]
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Posted on October 21st, 2010
Posted on October 12th, 2010
When investors buy global equities, they also acquire exposure to foreign currency and should decide whether and how to manage that exposure. Many real-world factors—including risk tolerance, costs, time horizon, and investor expertise—play a role in the currency hedging decision. Before choosing a currency-management strategy, it is very important for investors to define their primary [...] Posted on August 24th, 2010
Tactical asset allocation (TAA) is a dynamic strategy that actively adjusts a portfolio’s strategic asset allocation (SAA) based on short-term market forecasts. Its objective is to systematically exploit inefficiencies or temporary imbalances in equilibrium values among different asset or subasset classes. Over time, strategic long-term target allocations are the most important determinant of [...] Posted on August 23rd, 2010
Many investors view the bond market as abnormally risky since present yields are at historic lows. Indeed, the preponderance of thought is that, if and when interest rates rise, the fixed income portion of an investor’s aggregate portfolio may face volatility and loss. Coincidentally, the phrase “bond bubble” is gaining currency. Given many [...] Posted on July 28th, 2010
In this new annual publication, Vanguard presents its secular outlook for inflation, interest rates, and the returns on stocks, bonds, and other asset classes. This publication is intended to assist investment committees, financial advisors, plan sponsors, and other investors when making strategic asset allocation decisions. In this issue, the global outlook is discussed [...] 2 pages
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