Research and commentary

Making the implicit explicit: A framework for the active-passive decision

This Vanguard Group, Inc., research paper offers a quantitative framework for establishing allocation targets for a range of investors, focused on four key variables—gross alpha expectation, cost, level of active risk and active risk tolerance. The analysis shows both passive and active management can be appropriate.

Vanguard's framework for constructing globally diversified portfolios

This Vanguard Group, Inc., research paper reviews the investment decisions that individual investors face when building a globally diversified portfolio, explaining why broadly diversified, market-capitalization-weighted global index funds are a valuable starting point for all investors.