Two dynamic fixed income model portfolios that focus on specific client needs
Product News
|April 21, 2025
Two dynamic fixed income model portfolios that focus on specific client needs
As an advisor, you know that optimizing fixed income allocations to reflect client goals can make a meaningful impact on investing outcomes. Portfolio considerations must factor in the different investment needs and goals of your clients. Is a client looking for cushioning against risk assets? Or is the pursuit of greater returns the main objective? To help ensure portfolios are appropriately positioned, consider these two new dynamic Vanguard fixed income ETF model portfolios.
Dynamic portfolios seek to outperform a market-capitalization-weighted benchmark, and allocations are recalibrated throughout the year to align with our current 10-year forecasts.
Vanguard Fixed Income Risk Diversification model portfolio
This dynamic fixed income ETF model is designed for clients concerned about volatility and loss of principal. They’re comfortable with lower potential returns from their fixed income investments to hedge against equity market downturns and credit spread-widening events. Pair this model portfolio with traditional equities or separately managed accounts to cushion risk assets.
Talking to clients: The Vanguard Fixed Income Risk Diversification model portfolio can help you address client worries by emphasizing that high-quality fixed income investments often move in the opposite direction of equities when the stock market sells off, helping them prepare for equity market downturns.
Vanguard Fixed Income Total Return model portfolio
This fixed income model is designed for clients who are seeking wealth accumulation and risk diversification from the fixed income sleeve of their portfolio. The Vanguard Fixed Income Total Return Model Portfolio contains higher-quality bonds but adds lower-credit-quality high-yield bonds for potentially greater returns. Combine this portfolio with other asset classes for diversified returns.
Talking to clients: You can reassure clients that a well-diversified portfolio can give them exposure to whatever is performing well, which should offset any poorer-performing assets.
These model portfolios, with recommended allocations and funds, are available as portfolio construction guidance. Vanguard publishes this guidance each quarter with any changes to allocations. Advisors can subscribe here.
Why model portfolios? Models can help you:
Save time
You spend less time on investment selection, due diligence, and administrative tasks while you leverage the insights of some of the world’s leading portfolio construction and management experts.
Boost client value and retention
Use the time saved to deepen relationships by staying on top of your clients’ ever-changing financial goals.
Grow your business
Model portfolios make it easier to onboard new clients, either as a total-account solution for younger investors or a partial solution for more established clients in your practice.
Make your practice more valuable
Moving client assets into model portfolios with a more uniform investment process helps to boost the value of your practice.
Subscribe to models
Get performance, allocation, and attribution commentary for our tailored fixed income model portfolios.
For more information about Vanguard funds or Vanguard ETFs, visit vanguard.com to obtain a prospectus or, if available, a summary prospectus. Investment objectives, risks, charges, expenses, and other important information are contained in the prospectus; read and consider it carefully before investing.
Vanguard ETF Shares are not redeemable with the issuing Fund other than in very large aggregations worth millions of dollars. Instead, investors must buy and sell Vanguard ETF Shares in the secondary market and hold those shares in a brokerage account. In doing so, the investor may incur brokerage commissions and may pay more than net asset value when buying and receive less than net asset value when selling.
All investing is subject to risk, including possible loss of principal. Diversification does not ensure a profit or protect against a loss.
Bond funds are subject to the risk that an issuer will fail to make payments on time, and that bond prices will decline because of rising interest rates or negative perceptions of an issuer's ability to make payments. High-yield bonds generally have medium- and lower-range credit quality ratings and are therefore subject to a higher level of credit risk than bonds with higher credit quality ratings.
Be aware that fluctuations in the financial markets and other factors may cause declines in the value of your account. There is no guarantee that any particular asset allocation or mix of funds will meet your investment objectives or provide you with a given level of income.
Vanguard does not, and will not, make any representations about whether a model portfolio is in the best interest of any investor, is not, and will not be, responsible for the determination of whether a model portfolio is in the best interests of any investor; and is not acting as an investment advisor to any investor. It is the investment advisor's responsibility to determine the appropriateness of the model portfolios, or any of the securities included therein, for any client.
The Vanguard model portfolios are provided for illustrative and educational purposes only. The Vanguard model portfolios do not constitute research, are not personalized investment advice or an investment recommendation from Vanguard to any client of a third party financial professional and are intended for use only by a third party financial professional, with other information, as a resource to help build a portfolio or as an input in the development of investment advice for its own clients. Such financial professionals are responsible for making their own independent judgment as to how to use the Vanguard model portfolios.
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