Latest news with #Schlanger
CNBC
03-06-2025
- Business
- CNBC
The 40/60 portfolio has 'paid off' this year and should boost future returns, says Vanguard
It's been a good year so far for Vanguard's so-called 40/60 strategy. The model portfolio is overweight on fixed income, with the idea that higher bond yields can offer some cushion against moderate price increases. Yields, which move inversely to prices, have remained elevated this year. The 10-year Treasury yield once again topped 4.5% last month and is now around 4.46%. The strategy uses a method called time-varying asset allocation, which is based on Vanguard's 10-year forecasts for returns. The exact portfolio breakdown is 38% in equities and 62% in fixed income. "So far this year the positioning of the portfolio has paid off for us," said Vanguard senior investment strategist Todd Schlanger. Equities have run up in recent years and have become rich, especially large-cap growth stocks, he said. Vanguard estimates that the U.S. stock market is trading 37% above the top end of its fair-value range. That makes it more volatile, he said. "When you have high valuations, that can create a vulnerability that makes them more susceptible to experiencing declines when there is uncertainty," Schlanger explained. The stock portion of the 40/60 steers away from large-cap growth and tilts towards value and developed markets outside of the U.S. While growth stocks, particularly tech, had a banner 2024, they had a rough start to 2025 — and took a big hit during April's tariff-induced sell off. European stocks have also outperformed U.S. stocks. In April, the U.S. market returned -0.7%, while developed markets outside the U.S. rallied 4.7%, Vanguard noted. The fixed-income portion has a bit of a tilt towards longer-duration bonds, Schlanger said. The assets "performed better in periods of uncertainty and volatility," he said. In March, the firm moved away from U.S. intermediate credit bonds, which had been its heaviest fixed-income allocation, and into U.S. aggregate bonds. The latter provides diversification benefits, Schlanger said. The Bloomberg U.S. Aggregate Index includes investment-grade bonds such as Treasurys, corporates, and agency mortgage-backed securities. The aggregate bond index is also a bit longer in duration than the credit index, he said. "Our expectation is in the years ahead we will start to see a gradual fall in interest rates that will impact shorter-term bonds," Schlanger noted. Less volatility While Vanguard is predicting an increase in expected returns for its 40/60, the other big draw is its decrease in volatility, Schlanger said. When assessing its performance, the firm compared it to a 60/40 benchmark made up of 21% international and 39% U.S. in its stock bucket and 28% U.S. and 12% international in bonds. "Relative to the static broad-market benchmark, it is only expected to increase expected returns around 10 basis points, which isn't much, but we are seeing expectations of a decline in volatility of more than 200 basis points, which leads to a much better risk-adjusted return," Schlanger said. The predicted drawdown in the 40/60 portfolio is -4.2%, versus -8.3% for the benchmark, he added. Don't count out the 60/40 The bond-heavy portfolio isn't necessarily better or worse for someone who wants to be in a traditional 60/40 portfolio , Schlanger said. Those investors may just want to maintain a static exposure to the markets, he noted. "There is a lot of research that says that is a great way to invest," he said. The 40/60 is "for that investor who wants to be a little bit more active and more conscious of the markets and current conditions — how can I better position my portfolio to take risks and take advantage of opportunities that are out there," Schlanger added.
CBS News
06-05-2025
- Politics
- CBS News
Northwestern University students head to D.C., plan to speak about antisemitism on campus
Northwestern University has been under the microscope of the Trump administration as the subject of an investigation for how it handled reports of antisemitism on campus in recent years. Now, some students are in Washington to speak to lawmakers and to visit the White House. The investigation is into of what the Department of Education calls "explosions of antisemitism" on college campuses in the wake of the Israel-Hamas war. An initial report cited Title VI of the Civil Rights Act, which protects individuals from discrimination based on national origin and applies to schools and institutions of higher learning that receive federal funding. A total of 60 institutions of higher education were warned in March that they were under investigation by the U.S. Department of Education for possibly violating Title VI by allowing alleged antisemitic harassment and discrimination on their campuses. Meanwhile last month, red antisemitic graffiti was found sprayed on Northwestern buildings. In a letter to university community members, Northwestern President Michael Schill wrote that a group of people vandalized several buildings on the university's Evanston campus — spray-painting "antisemitic slogans and hate-filled language." Among the spray-painted messages was "Death to Israel" on the front of Kresge Hall. Students Max Schlanger and Or Yahalom said such acts leave them feeling unsafe. "You would not feel safe on campus," Schlanger said. Schlanger and Yahalom are both now in Washington, D.C. They plan to talk with lawmakers and advocate for change, along with more than a dozen other Northwestern students. "Being on this trip, we are facing social costs from our peers," said Yahalom. This also comes after an Arab dance group performed in a university dining hall, in a display by which Northwestern now says it is "shocked and appalled." The problem some students have is not with the dance, but with the shirts the group wore. The back of the shirts had the word "Palestine" in Arabic with a map and a keffiyeh over it. "To ignorantly hire a dance group which effectively has 'death to Israel' on the back of their shirts, two weeks after students or someone spray paints 'death to Israel' on the building which houses the Holocaust Education Center, is appalling," Schlanger said. Ahmad Awad is a member of the dance group, and said the dance was for Arab Heritage Month. "There was no need to bring politics into it," Awad said. He added that the group has worn the shirt for hundreds of events. Northwestern issued this statement about the performance: "The University is shocked and appalled by the performance of an outside entertainment company Tuesday night at Sargent Dining Hall, at which members of the dance company wore camouflage pants, t-shirts that superimposed a keffiyeh over the state of Israel, and waved a Palestinian flag as part of an Arab American Heritage observance. The company was hired by the University's independent dining vendor, Compass, which did not share details of the proposed performance with the University in advance. "Northwestern unequivocally disapproves of Compass' poor judgment in allowing this performance to occur while our students were eating dinner. Dinner should be a time of relaxation, sustenance, and community, not a time for unwelcome and inappropriate political expression. "At the University's request, Compass has removed its team members who led their Northwestern operations and their campus marketing function. In addition, the University has placed an administrator who oversees the residential dining program on leave. "Northwestern is examining all of its legal remedies under its contract with Compass. "The University apologizes to any student who encountered the performance and was made to feel uncomfortable." Awad said he does not believe such actions were warranted. "It really is unfortunate that she was removed from the position because she doesn't deserve that," he said. As for the students in D.C., they are headed to the White House on Tuesday for a national news conference. Michael Kaminsky, a DePaul University student, will also speak at the news conference — he was injured in an antisemitic attack. "It's just going to do more to remedy the situation," Schlanger said.
