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How our investment partners stay prepared

Watch Tim Buckley, Vanguard’s CEO and Kaitlyn Caughlin, head of portfolio review, explain how Vanguard monitors its active management partners and their preparedness for black swan events like the Covid-19 pandemic.

Tim Buckley: So Kaitlyn, you mentioned risk. A lot of our clients have been wondering about our business continuity. We've talked to them about what we're doing here at Vanguard; what we're doing with our investment teams and with our service teams. We can talk about what we’re doing with your team and everyone is distributed and teams not missing a beat. How about our external advisers? I know you've worked with them a lot on their business continuity.

Kaitlyn Caughlin: Our external managers are affected just like everyone has been in this environment. But the good news is that their trading capabilities are operating smoothly. They’re operating smoothly and they're able to focus on their day-to-day responsibilities of managing their Vanguard mandates. And actually, it's one of the things that we like seeing in action: their business continuity plans.

So one of the responsibilities of the Portfolio Review Department is to regularly conduct risk assessments of our external partners. That includes operational risk. We have dedicated teams that conduct on-site assessments of a variety of different risk topics, one of which does include business continuity. And so over the last couple of weeks, we've been in almost daily contact with our external partners.

Tim: Which we appreciate.

Kaitlyn: They're taking it very seriously and what we see is a variety of different levels of business continuity plans that have been implemented. Some of our managers are fully work-from-home at this point. Others have implemented a split working arrangement. But the great news is that when we look across the board at our external partners, their business continuity measures are working. And because they're working, they're able to focus on doing what they do best as active managers, which is figure out how to deliver long-term value and outcomes for Vanguard clients.

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