Vanguard has launched its first dynamic asset-allocation fixed income model portfolios for financial advisors and their clients: the Vanguard Fixed Income Risk Diversification and Vanguard Fixed Income Total Return.
“Model portfolios empower financial advisors with streamlined investment manager research and ongoing portfolio construction and monitoring, so they can spend time on the things that really matter to their clients — like ensuring they’re meeting their investment goals,” Brent Beardsley, Vanguard's head of advisor solutions, said.
Built to serve a variety of investment time horizons and risk profiles, Vanguard’s model portfolios support advisors’ portfolio construction needs, the asset manager noted.
The Vanguard Fixed Income Risk Diversification and Vanguard Fixed Income Total Return model portfolios seek to outperform market-capitalization-weighted benchmarks — the Bloomberg U.S. Aggregate Index and Bloomberg U.S. Universal Index, respectively. Allocations are recalibrated throughout the year to align with the Vanguard Capital Markets Model 10-year forecasts.
Vanguard’s Investment Strategy Group oversees the asset allocations for the models, and Vanguard’s Fixed Income Group manages the fixed income funds included in each portfolio.
The Vanguard Fixed Income Risk Diversification model portfolio has a weighted average expense ratio of 0.05% and is built for advisors and their clients in search of a highly diversified fixed income portfolio with exposure to global investment grade bonds; it's intended to provide ballast against equity market volatility.
The Vanguard Fixed Income Total Return model portfolio is designed for those seeking wealth accumulation and risk diversification from the fixed income sleeve of their portfolio. This model portfolio contains exposure to global investment grade and high -yield bonds at a weighted average expense ratio of 0.08%.
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