WEEKLY BRIEF | Not Fully Fixed

Hello, and welcome to the IVA Weekly Brief for Wednesday, July 29.

There are no changes recommended for any of our Portfolios.

Was that the top?

April and May were Information Technology ETF’s (VGT) two best months since its 2004 inception—up a total 38.8%. Since then, the fund dropped 1.2% in June and another 7.2% so far in July.

A pullback after back-to-back double-digit months isn't a surprise; tech stocks were due for a breather. What's unknowable is whether this is a pause before the rally resumes, or whether April and May marked the final sprint of the artificial intelligence-driven run.

Coming into the year, I said I thought AI and tech stocks were in a bubble. My approach was to keep some exposure to the sector while holding a diversified portfolio that could hold up reasonably well if and when that bubble burst. This approach has led to market-beating returns this year—I’m sticking with the plan.

A New Chairman, A Younger Board

Last week, Vanguard announced that longtime board member and its first nonexecutive Chairman, Mark Loughridge, is retiring at the end of the year. Kenneth Jacobs, who served as Chairman and CEO of Lazard, Inc (a New York-based financial advisory and asset management firm with around $285 million in assets) from 2009 to 2023, will succeed Loughridge as nonexecutive Chairman, while John Murphy will step in as Lead Independent Director.

Given Loughridge’s tenure—he's been a trustee on the board since 2012—his retirement isn’t a surprise. Combined with Andre Perold’s retirement in June, Loughridge’s departure leaves Peter Volanakis and Scott Malpass as the longest-tenured trustees, having joined in 2009 and 2012, respectively. Sarah Bloom Raskin, who joined in 2018, is the next on the list.

In other words, 11 of the 14 trustees (not counting Loughridge) joined the board after the COVID pandemic in 2020.

Not only is the board relatively new, but Jacobs himself only joined in February. That timing suggests he was brought on with Loughridge's retirement already in mind. 

Frustratingly, his recent hire also means we have no idea how much Jacobs has invested alongside us, his fellow Vanguard shareholders. Given his background running Lazard, he probably owns plenty of Lazard funds. Vanguard funds? We’ll have to wait and see.

John Murphy’s ownership of Vanguard funds isn’t particularly encouraging. As of my last update (and yes, I’ll refresh the numbers again this year), he owned just two funds—over $100,000 invested in Extended Market Index (VEXAX) and $10,000–$50,000 in Mortgage-Backed Securities Index (VMBSX). That’s a head-scratcher of a combo—oddly narrow for a trustee who’s now the Lead Independent Director.

Jacobs and Murphy are certainly capable and talented. But what stands out to me is that, come 2027, we’ll have alums of BlackRock (Ramji) and Lazard (Jacobs) sitting in the CEO and Chairman seats. 

Fresh leadership can push a firm in new directions. The risk is that its culture and identity start to change along with it. Vanguard's culture is strong, and people like CIO Greg Davis can act as guardians—but it's something all investors and shareholders need to keep an eye on.

The Job Is Not Done

Speaking of keeping my eye on Malvern, I’m still not ready to say Vanguard has solved its tech issues.

Last week, an IVA reader shared an email from Vanguard warning that he hadn’t yet satisfied his required minimum distribution (RMD). The problem? He’d already taken his RMD in full in January.

Vanguard's fix didn’t fare much better. Another IVA reader said his wife received the following “clarifying” follow-up email (below). However, her only retirement account is a Roth IRA, which doesn’t require an RMD. In other words, she shouldn’t have received any RMD-related emails.

Vanguard is spending real money on its tech, and the trend line looks right. But until I stop hearing stories like this one, the job isn't done—and neither is yours. As I’ve said before, no one is going to care as much about your money as you are. Keep track of your RMDs and don’t rely on Vanguard to remind you.

WVB Funds Arrive

Well, that only took a year. In April 2025, Wellington, Vanguard and Blackstone announced they were teaming up to develop new funds blending public and private assets. After a long delay, the two resulting funds—WVB All Markets Fund and WVB Blackstone All Privates Fund—have finally launched.

One catch: they are only available to Merrill and Bank of America Private Bank clients for now. The fact that Vanguard’s Personal Advisors aren’t lining up at the top of the queue to use these alternative funds may tell you all you need to know about them—it’s going to be a very hard sell.

Another unsavory detail is that gross expense ratios range from 1.74% to 4.15%, depending on the share class—not exactly Vanguard-level cheap.

Premium Members can read my full take—including how these interval funds actually work and why I’m watching from the sideline—here.

Our Portfolios

Our Portfolios are showing solid returns for the year through Tuesday. The Aggressive Portfolio is up 12.4%, the Aggressive ETF Portfolio is up 10.1%, the Growth Portfolio is up 10.9%, the Moderate Portfolio is up 11.3% and the Conservative Portfolio is up 6.9%.

This compares to a 9.8% return for Total Stock Market Index (VTSAX), a 10.7% gain for Total International Stock Index (VTIAX), and a fractional 0.02% gain for Total Bond Market Index (VBTLX). Vanguard’s most aggressive multi-index fund, Target Retirement 2070 (VSNVX), is up 9.2% for the year, and its most conservative, LifeStrategy 20/80 (VASIX), is up 2.2%.

IVA Research

Yesterday, in Nearly Back in the Black—But That's Not the Point, I looked at Total Bond Market Index's (VBTLX) climb back toward its pre-2022 high. I explained why the bond fund's yield matters much more than its price recovery. That's for Premium Members.

 Until my next IVA Weekly Brief, have a safe, sound and prosperous investment future.