Vanguard’s Ryan Barksdale, head of advisor portfolio analytics and consulting, sat down with Judy Shaw, communications and media relations for the New York Stock Exchange, to discuss the challenges in markets this year and how advisors can best manage their risk.
This year has been one of the most challenging years for advisors and investors, and it’s something that Vanguard has daily conversations about with clients, explained Barksdale. Vanguard went into the year expecting challenges, but the added pressures of rising interest rates, high inflation, supply chain issues, and the Russia/Ukraine war have all impacted markets.
“If anything, it feels like the year has become more difficult, with obvious crises across the globe, what to do in fixed income,” Barksdale said. “There’s a number of risks that we’re talking to advisors about each and every day; it’s a real challenge.”
Conversations that Vanguard has been having with its clients have been in both fixed income and equities, and Barksdale discussed the established trend of the outperformance of growth stocks and the pivot that has been happening to a more value focus than before.
“It’s for a variety of reasons, and we’re seeing advisors respond in a few different ways,” Barksdale said.
The most common methods of response that Vanguard has seen to market performance by advisors has included advisors simply rebalancing their portfolios, shifting to be more focused in the short-term with tactical positioning, as well as longer-term value plays that see value as an important allocation over a 5-10 year time horizon.
"Information, Perspectives, and Insights" in 2022
Looking ahead for the rest of the year, Vanguard is remaining focused on its clients and offering support through discussions and portfolio analysis.
“We’re focused on continuing to do what we do best, I think, which is having discussions with advisors each and every day, helping them sort through their portfolio construction problems,” Barksdale explained.
This includes helping advisors to identify issues within their portfolios that they might otherwise have missed, such as intended bets or unintended bets in a market of continued volatility.
In 2022, Vanguard aims to “be a source of information, perspectives, and insights,” said Barksdale.
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