This week, we speak with Vanguard’s chief investment officer Greg Davis. He is responsible for the oversight of approximately $7 trillion managed by Vanguard fixed income, equity index, and quantitative equity groups. Davis also serves as a member of the Treasury Borrowing Advisory Committee of the US Treasury Department. He has more than 25 years of investment management experience.
We discuss how his career took a series of unexpected turns, including beginning by studying insurance and working as the CIO / director of Vanguard Australia and Asia-Pacific, before taking over all of fixed income worldwide. Tim Buckley, who became CEO of Vanguard Group in 2018, eventually elevated Davis to CIO.
Davis explains why Vanguard doesn’t play the forecasting game, noting the “forecasting game is really hard and even harder for the short-term.” Instead, the Vanguard capital markets model “runs large simulations that show a probabilistic set of results, and so we tend to aim at the median, the midpoint of the distribution of those observations.” As to the tail, both positively and negatively, that is going to happen on occasion, but most of the time you are in the middle of the distribution.
Davis adds “Instead of forecasting events you have no control over, you can control your diversification and costs.”
You can stream and download our full conversation, including any podcast extras, on Apple Podcasts, Spotify, Stitcher, Google, YouTube, and Bloomberg. All of our earlier podcasts on your favorite pod hosts can be found here.
Be sure to check out our Masters in Business next week with Jonathan Miller, CEO of Miller Samuel, a real estate appraisal and consulting firm he co-founded in 1986. He is a state-certified real estate appraiser in New York and Connecticut who performs court testimony as an expert witness, and holds the Counselor of Real Estate (CRE) and Certified Relocation Professional (CRP) designations. His weekly email Housing Notes is widely read in both the appariasal and real estate brokerage industries. Miller Samuel’s research and data analytics drive much of the national real estate brokerage publications and strategic plans.
Greg Davis’ Current Reading
Plunder: Private Equity’s Plan to Pillage America by Brendan Ballou
From Here to Equality, Second Edition: Reparations for Black Americans in the Twenty-First Century by William A. Darity Jr. and A. Kirsten Mullen