There are only a few things you can control in markets. Vanguard is obsessed with them

Please note, this interview was recorded Thursday 23 July, 2026

At Berkshire Hathaway's annual meeting in May, Warren Buffett commented that the stockmarket is like "a church with a casino attached" and that he'd "never seen people in a more gambling mood than now".

In a similar vein, Macquarie's Viktor Shvets has long discussed "hyperfinancialisation", in which the growth of financial assets (derivatives, options, etc.) far outstrips that of real assets.

It's not hard to see these things around us. Leveraged products are fashionable again and, let's face it, many of us were tempted by the SpaceX IPO. What is harder, and increasingly important, is to refrain from such adventures and remind ourselves of what we can control.

When it comes to investing, there are only two things we can control: how much risk we take, and how much we pay to take that risk. To believe anything else is to kid oneself.

Against that backdrop, it was refreshing to sit down with Vanguard Chief Investment Officer for APAC, Duncan Burns. Deeply embedded in Vanguard's DNA, thanks to founder Jack Bogle, is a focus on low cost, diversification, balance and discipline. But perhaps that philosophy is best captured in the following observation from Burns:

"Every investor needs a quality investment framework or philosophy to ground themselves. That is how you make decisions, particularly when markets become difficult."

In this interview, Burns explains why strategic asset allocation remains the most important decision investors make, how Vanguard's partnership with Lonsec blends active and passive investing into a scalable solution, why preparing for markets is more effective than trying to predict them, and what continues to set Vanguard apart in an increasingly crowded investment landscape.

Interview summary

Asset allocation comes first

Burns argues that better outcomes begin with matching a portfolio to an investor's goals rather than trying to predict markets. He says Vanguard's four investment principles all stem from that starting point.

"Job one is figure out what your goals are and match that to your asset allocation."

From there, he explains why diversification, low cost, low turnover and tax efficiency remain the biggest drivers of long-term returns, before introducing the core-satellite framework as a practical way to combine broad market exposure with higher-conviction active ideas.

Why advisers matter more than ever

One of the more interesting observations from Burns relates to the role of advisers.

Drawing on Vanguard's Advisors' Alpha research, he says around 80% of the value advisers create comes from planning, behavioural coaching and tax advice, while only around 20% comes from investment decisions.

Initially, Burns admits he found that conclusion confronting.

"As a CIO and someone who's dedicated my life's work to investments, I was kind of insulted by the seeming lack of importance there at the 20%."

However, he says the industry has evolved to the point where strong investment implementation is now expected, allowing advisers to spend more time on the areas where clients receive the greatest benefit.

A partnership designed to free up advisers

That philosophy sits behind Vanguard's recently launched Core Satellite Model Portfolios, developed in partnership with Lonsec Investment Solutions (LIS).

Rather than asking advisers to research, monitor and rebalance portfolios themselves, Burns says the new offering combines Vanguard's expertise in strategic asset allocation, portfolio construction and indexing with Lonsec's active manager research.

"What I really think advisers are going to love about this is it's a complete portfolio. The parts complement each other really well. No duplicates, no gaps."

The objective, he says, is to provide a scalable solution that lets advisers outsource portfolio management while spending more time with clients.

Prepare, don't predict

Perhaps the strongest message throughout the interview is Burns' belief that investors should resist the temptation to forecast markets.

He argues that many investors believe successful investing requires accurately predicting economic outcomes, sector rotations or individual stock winners. Decades of academic research, he says, suggest otherwise.

"The key is distinguishing between adapting and reacting."

Instead, Burns encourages investors to focus on the decisions they can control.

"Long-term success is about capturing market returns. You cannot predict the markets, but you can prepare."

For investors concerned about elevated technology valuations or the excitement surrounding artificial intelligence, he says the answer is not to guess when markets might turn, but to revisit their strategic asset allocation and ensure it still matches their risk tolerance.

Trust over trends

Burns concludes by returning to Vanguard's founding principles.

As financial markets become increasingly crowded with leveraged products, prediction markets, cryptocurrencies and social media-driven investing, he believes the distinction between investing, speculation and gambling is becoming increasingly blurred.

Against that backdrop, Vanguard remains focused on solving genuine investor problems rather than chasing the latest investment trend.

"It is not about what is hot and exciting. It is about solving real investor problems and driving great outcomes for them."

For Burns, that philosophy ultimately comes back to the structure Jack Bogle established more than 50 years ago. 

As a client-owned organisation, he says Vanguard exists to improve investor outcomes, not maximise shareholder profits, a distinction he believes continues to shape every investment decision the firm makes.