2025 year-end Risk Speedometers: What are allocators buying and selling?

Strong equity returns continued a multi-year trend, yet allocators have largely stayed the course of disciplined rebalancing into fixed income.

The Vanguard Investment Advisory Research Center’s latest Risk Speedometers offers new insights by analyzing cash flows into and out of asset categories for the six- and 12-month periods ended December 31, 2025. The speedometers gauge the difference in net cash flow between higher-risk and lower-risk asset classes, providing a way to measure fund allocators’ risk appetite.

• We find it encouraging that, despite the strong relative outperformance of equities over bonds in the past six months and year, cash flows and risk appetite continue to be balanced.
• As we’ve observed before, this behavior is notably different from historical trends and it aligns with our Advisor's Alpha^® research.
• We maintain that, even with the strong rebalancing efforts by advisors over the past 5 to 10 years, additional rebalancing from equities into fixed income may be needed.

Being aware of the categories that are in or out of favor can help you when preparing for client conversations and providing context into what is selling well versus what is being sold in the marketplace. Read the full PDF for our complete analysis.

Notes

• All investing is subject to risk, including the possible loss of the money you invest.
• Past performance is no guarantee of future results.