Vanguard recommends investors increase non-U.S. holdings to 40%

Global stock markets are likely to outperform the U.S., and fees on international funds have fallen, executives say

Jan 11, 2019 @ 10:24 am

By Bloomberg News

Investors should put about 40% of their portfolios in non-U.S. stocks and bonds to diversify their holdings, according to top executives at Vanguard Group, the fund giant that manages $4.9 trillion.

Global stock markets are likely to outperform the U.S., which the firm expects to return roughly 4% to 6% annually over the coming decade, CEO Tim Buckley and chief investment officer Greg Davis said Thursday during a webcast.

Vanguard formerly recommended allocating about 30% of portfolios to non-U.S. assets, the executives said. One reason for the increase: Fees have fallen on international funds, improving net returns.

Other comments from the Valley Forge, Pa.-based firm:

• Expect volatility to continue in 2019. Last year was normal, while the low volatility of 2017 was an aberration.

• Stay invested. "Going all cash is way too risky," Mr. Buckley said.

• Long-term U.S. Treasury yields are likely to rise as supply grows with an expanding deficit and foreign buyers diminish.

• The government shutdown is likely to slow U.S. growth by 0.1% or more per week.

• Competitors cut fees to zero on some funds as a marketing tactic, but Vanguard won't go that low. "We'll continue to do what we're doing," Mr. Buckley said.

(More: Gundlach criticizes buy-the-dip mentality)

0
Comments

What do you think?

View comments

Recommended for you

Featured video

INTV

Regulators' gloves are coming off with cybersecurity. Put up your dukes with these tips

Updated guidelines and some of the first-ever rule enforcements signal that regulators are getting serious about holding firms accountable for data breaches, according to special projects editor Liz Skinner and technology reporter Ryan Neal.

Video Spotlight

We started as a boutique firm with huge ambitions. Schwab was a perfect fit.

Sponsored by Schwab: Advisor Services

Recommended Video

Keys to a successful deal

Latest news & opinion

Here's how advisory firms compensate their employees

Schwab’s report on RIA pay details median compensation for a range of positions

Raymond James buys Silver Lane Advisors, an investment bank for RIA mergers

Expanding unit taps into M&A trends in the wealth management space.

Final pass-through rules deliver good and bad news for advisers

The final regs are a boon to rental-property owners and some mutual fund shareholders, but some clients' deduction may be diluted.

Finra focuses exam priorities on investor-protection threats

Online distribution of private placements pops up; exchange-traded products cause suitability worries.

10 public companies that boosted their ESG ratings in 2018

These 10 companies increased their environmental, social and governance scores last year.

X

Hi! Glad you're here and we hope you like all the great work we do here at InvestmentNews. But what we do is expensive and is funded in part by our sponsors. So won't you show our sponsors a little love by whitelisting investmentnews.com? It'll help us continue to serve you.

Yes, show me how to whitelist investmentnews.com

Ad blocker detected. Please whitelist us or give premium a try.

X

Subscribe and Save 60%

Premium Access
Print + Digital

Learn more
Subscribe to Print