Vanguard’s Investment Strategy Group
Our Investment Strategy Group serves as our lead in-house think tank. This team of economists, investment strategists and quantitative investment analysts produces relevant and rigorous insights on economics, markets, portfolio strategies and investor behaviour to improve investor outcomes and decision-making. The group also develops and oversees our proprietary modelling and forecasting tools.
Key credentials
A global team across disciplines
35 economists across 6 locations, including 7 CFAs and 13 PhDs.
Actionable insights and analysis
An in-house partner to our investment management teams, businesses and senior leadership team.
Rigorous primary research
In-depth primary research on a broad range of topics important to both investors and the industry.
Our latest asset-class return outlook
The Vanguard Capital Markets Model® (VCMM) is a sophisticated financial simulation engine that powers our investment outlook and asset allocation decisions. You can find the latest forecasts for equity and bond markets below.
A global, dynamic model that forecasts the drivers of long-term asset returns such as yield curves and equity market valuations.
Attribution models that attribute asset returns to the drivers.
A simulation engine to model the probability distribution of outcomes.
AI, oil and a changing global economy
Joe Davis, Vanguard’s Global Chief Economist, explains how AI continues to shape our outlook for 2026 and beyond.
Key points
AI is accelerating faster than expected
Artificial intelligence is no longer just a long-term theme. AI-related investment is exceeding our original expectations and appears to be tracking more like a major technological revolution than a typical business cycle.
We see stronger US growth ahead
We now expect the US economy to grow by 3% in 2027, driven by a structural transformation underpinned by AI investment, productivity gains and continued corporate spending.
The oil shock is creating winners and losers
Conflict-driven energy price increases are weighing on global growth and inflation, but the impact is uneven. Energy-importing regions, such as Europe, are feeling the strain more acutely than the US, where AI-driven growth is helping offset the drag.
Inflation remains a policy challenge
AI investment and higher energy prices are contributing to inflation pressures, which could keep central banks cautious. While longer-term productivity gains should help ease inflation, policymakers are likely to remain vigilant in the near term.
Long-term opportunities remain despite volatility
Markets may experience periods of volatility as investors balance elevated valuations against the transformative potential of AI. Vanguard believes the longer-term outlook remains supported by productivity gains as AI adoption spreads across the global economy.
Outlook resources
Vanguard 2026 economic and market outlook
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Important information
This article is designed for use by, and is directed only at persons resident in the UK.
The information contained in this article is not to be regarded as an offer to buy or sell or the solicitation of any offer to buy or sell securities in any jurisdiction where such an offer or solicitation is against the law, or to anyone to whom it is unlawful to make such an offer or solicitation, or if the person making the offer or solicitation is not qualified to do so. The information in this document does not constitute legal, tax, or investment advice. You must not, therefore, rely on the content of this article when making any investment decisions.
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