On the latest episode of the Investors First Podcast, co-hosts Steve Curley, CFA (Co-Managing Principal, 55 North Private Wealth) and Chris Cannon, CFA (CIO/Principal, FirsTrust) sat down with Joe Davis, Vanguard's Global Chief Economist and Global Head of the Investment Strategy Group.
Davis leads a team of roughly 700 within Vanguard's investment management group and holds a PhD in economics. He joined the firm early in his career and has been there through its rise to more than $10 trillion in global assets. Steve Curley joked that a number like that deserves a rolling ticker outside Vanguard's Valley Forge, Pennsylvania headquarters.
Fifty Years of Lowering the Cost of Investing
The conversation opened with a reflection on Vanguard's 50th anniversary. Davis credited the milestone to the trust investors have placed in the firm's mutual ownership structure, where the fund shareholders own the company itself.
That structure came up repeatedly as the hosts explored the origin of index investing. Davis was careful to note that while Vanguard launched the first retail index fund, the intellectual groundwork was laid by academics and practitioners across the industry. He also discussed Vanguard's patented ETF-as-a-share-class structure, which allows ETF and mutual fund investors to share the same underlying portfolio. The result is a set of tax efficiencies that competitors cannot easily replicate.
"The mutualization and the clients' and employees' interests are aligned," Davis said. "Strategy follows the structure."
How AI Is Changing the Work of Wealth Management
Davis recently published a book on AI's potential impact on the economy. The project grew out of research Vanguard began back in 2015. He said he spends roughly three hours a day working with AI tools, testing what they can do across investment research, data analysis, and workflow.
"I'm trying to automate my job away," he joked, before drawing a comparison to the early days of spreadsheet software. Just as Lotus 1-2-3 didn't eliminate finance jobs but fundamentally changed them, Davis expects AI to reshape advisory work rather than replace it.
When asked which platform he prefers, Davis said he bounces between several, including ChatGPT, Claude, and Gemini. He was candid about not being a technologist by nature. "If I get the remote to work at home, like, I'm pretty challenged," he said. But Vanguard's research team has engaged with leading technology companies and academic institutions, including Stanford, to stress-test what AI can and cannot do.
The team's data-driven analysis suggests that AI is more likely to transform jobs than eliminate them, with roughly 60% probability in their model. Historical patterns of technology adoption back that up. Automation tends to create new demand even as it changes existing roles.
Where Vanguard Sees Opportunity
Davis shared a high-level view of Vanguard's current thinking on the capital markets without getting into specific forecasts. He described Vanguard as "generally constructive" and emphasized that for investors with some discretion in their portfolios, the question isn't really about being in or out. It's about where to tilt.
He pointed to international diversification as an area worth attention after years of U.S. equity dominance. He also noted that fixed income is once again providing meaningful yield, something that wasn't the case for much of the past decade. And he walked through how Vanguard's proprietary capital markets model uses probability distributions rather than point estimates, helping advisors stress-test financial plans across a range of scenarios instead of relying on a single expected outcome.
Why Financial Advisors Still Matter
With low-cost index funds and AI-powered tools more accessible than ever, Davis still made a clear case for the value a qualified financial advisor provides. He pointed to Vanguard's well-known Advisor's Alpha research, which quantifies the behavioral coaching, tax planning, and withdrawal strategy benefits that advisors deliver. Those benefits tend to show up most in the moments when clients are tempted to make emotional decisions.
His take: as financial products and tax rules grow more complex, the need for human judgment and coordination only increases. AI enhances that work. It doesn't replace it.
Who Would Joe Davis Interview?
In the podcast's signature closing question, Davis chose Lord Horatio Nelson, the British naval commander whose flagship HMS Vanguard inspired Jack Bogle's naming of the firm. Davis has written about Nelson's Battle of the Nile strategy in his book, drawing parallels between naval tactics and investment discipline.
"That would be just a life lesson, not just a history lesson," he said.
About the Investors First Podcast
The Investors First Podcast is a service of CFA Society Orlando, recognized with the CFA Institute's 2020 Impact and Innovation Award. Co-hosts Steve Curley and Chris Cannon are both former presidents of CFA Society Orlando and currently serve on the advisory council.
Past guests include Howard Marks, Annie Duke, Morgan Housel, Federal Reserve Bank President Raphael Bostic, Cliff Asness, Aswath Damodaran, Jason Zweig, Rick Rieder, and Michael Mauboussin.
Listen to the Full Episode
Listen to the full interview with Joe Davis on the Investors First Podcast website. Also available on Apple Podcasts, Spotify, and other podcast platforms.