Aug 29, 2025

I recently learned that Vanguard is defending a controversial strategy that suggests a 70% bond and 30% stock split, diverging from the traditional 60/40 split. This shift is part of Vanguard’s long-term time-varying asset allocation portfolio, aiming to identify risk tolerance in different market conditions. By overweighting bonds and focusing on value stocks, Vanguard expects a 10-year annualized return of 5.5% with lower volatility compared to the benchmark 60/40 strategy.

In other news, Walgreens Boots Alliance has gone private in a $23.7 billion takeover by Sycamore Partners, marking the largest retail leveraged buyout ever. The pharmacy chain is now under the leadership of new CEO Mike Motz, and Sycamore may sell off certain assets like the specialty pharmacy business Shields to reduce debt. This move reflects the increasing private equity involvement in the retail sector and potential impacts on the company’s operations and future strategies.

Additionally, the U.S. government is adopting a private equity-like approach to decision-making, emphasizing potential financial gain alongside national security. Recent actions include considering stakes in defense contractors and negotiating equity in companies providing COVID vaccines. This focus on profit as a component of public health signals a broader trend towards financial considerations in policy and decision-making.

On another note, hedge funds are increasingly taking over the manufacturing of derivatives, once dominated by investment banks. From offsetting futures to merger arbitrage, hedge funds are now more involved in these activities, resembling the banks of the past. MicroStrategy Inc.’s Bitcoin treasury trade, IPO pops phenomenon, and a concerning incident at ANZ bank in Australia were also highlighted in recent financial news, showcasing the diverse and evolving landscape of financial strategies and market dynamics.

Stay Well!