Financial markets traced a rocky path to solid gains over the first quarter of 2023. They rose sharply early on amid signs of moderating inflation, declining energy prices, and solid labor markets despite layoffs in the U.S. tech sector. Then strong economic data and slowing progress on the inflation front raised concerns that central banks would need to significantly raise interest rates—a shift in outlook that contributed to stocks’ giving back some ground. The sudden shuttering of two U.S. regional banks and turmoil in the European banking sector sparked another bout of volatility in early March, but sentiment turned more upbeat by the close of the period.
Stocks finished higher, with Europe and the United States showing more strength than Asia and emerging markets.
Overall, U.S. bonds saw their yields finish lower and prices higher. The broad U.S. investment-grade bond market returned about 3% (as measured by the Bloomberg U.S. Aggregate Float Adjusted Index).
U.S. bond market
- The broad bond market returned 3.01% for the quarter, as measured by the Bloomberg U.S. Aggregate Float Adjusted Index. In general, lower-quality bonds with longer maturities produced the best results. The Bloomberg U.S. Corporate Bond Index returned 3.50%, compared with 3.01% for the Bloomberg U.S. Treasury Index. Within the corporate sector, bonds of industrials (+4.12%) outperformed those of utilities (+3.78%) and financial institutions (+2.35%).
- The Federal Reserve approved interest rate hikes twice during the period: 0.25 percentage point in February and March. These increases brought the federal funds rate target to 4.75%–5.0%. The yield of the bellwether 10-year Treasury note finished the quarter at 3.47%, down from 3.87% three months earlier.
- For the 12 months, the broad U.S. bond market returned –4.72%.
U.S. stock market
- For the quarter, the broad-market Russell 3000 Index returned 7.18%. Large-capitalization stocks outpaced mid- and small-caps, and growth stocks outperformed value stocks.
- For the 12 months ended March 31, the Russell 3000 Index returned –8.58%, with consumer discretionary, technology, and financials the hardest-hit sectors.
Money Market
- Money market yields rose during the quarter. As of March 31, the yield on Vanguard Federal Money Market Fund stood at about 4.75%, with a weighted average life of 51 days. The fund maintained its high-quality portfolio and continued to benefit from broad diversification and low fees.
International stock market
- European stocks (+10.18%) outpaced stocks from the Pacific region (+4.90%) and emerging markets (+3.07%) for the quarter.
- For the 12 months, stocks outside the United States returned –5.13%, as measured by the FTSE All-World ex US Index. Financials, technology, and basic materials were the worst-performing sectors.
Footnotes
- Expense ratios are assessed by the Vanguard mutual funds/exchange-traded funds (ETFs) and vary based on allocation; Vanguard Charitable does not itself charge investment fees. While they may be invested in mutual funds or ETFs, the investment options are not themselves mutual funds, nor are they publicly traded. They are not available for investment by any individual or organization apart from Vanguard Charitable. As such, prospectuses only exist for the underlying mutual funds, and not for the Vanguard Charitable investment options.
- Account expense ratios utilize the Institutional Plus or Institutional Select share class of the underlying Vanguard mutual funds where applicable.
- Funds underlying Vanguard Charitable investment options may change without notice so long as the new underlying fund has similar characteristics and goals as the previous underlying fund.
- Income benchmark: 80% Spliced Bloomberg Barclays U.S. Aggregate Float Adjusted Index, 14% Spliced Total Stock Market Index, 6% Spliced Total International Stock Market Index. Spliced Bloomberg Barclays U.S. Aggregate Float Adjusted Index: Bloomberg Barclays U.S. Aggregate Bond Index through December 31, 2009; Bloomberg Barclays U.S. Aggregate Float Adjusted Index thereafter. Spliced Total Stock Market Index: Dow Jones Wilshire 5000 Index through April 22, 2005; MSCI US Broad Market Index through June 2, 2013; and CRSP US Total Market Index thereafter. Spliced Total International Stock Market Index: Total International Composite Index through August 31, 2006; MSCI EAFE + Emerging Markets Index through December 15, 2010; MSCI ACWI ex US IMI Index through June 2, 2013; and FTSE Global All Cap ex US Index thereafter.
- Conservative Growth benchmark: 60% Spliced Bloomberg Barclays U.S. Aggregate Float Adjusted Index, 30% Spliced Total Stock Market Index, and 10% Spliced Total International Stock Index. Spliced Bloomberg Barclays U.S. Aggregate Float Adjusted Index: Bloomberg Barclays U.S. Aggregate Bond Index through December 31, 2009; Bloomberg Barclays U.S. Aggregate Float Adjusted Index thereafter. Spliced Total Stock Market Index: Dow Jones Wilshire 5000 Index through April 22, 2005; MSCI US Broad Market Index through June 2, 2013; and CRSP US Total Market Index thereafter. Spliced Total International Stock Market Index:Total International Composite Index through August 31, 2006; MSCI EAFE + Emerging Markets Index through December 15, 2010; MSCI ACWI ex US IMI Index through June 2, 2013; and FTSE Global All Cap ex US Index thereafter.
- Moderate Growth benchmark: 60% Wilshire 5000 Index and 40% Lehman Aggregate Bond Index through December 31, 2009; 45% Balanced Composite Index, 45% Wellington Composite Index, and 10% Spliced Total International Stock Index thereafter. Balanced Composite Index: Made up of two unmanaged benchmarks, weighted 60% Dow Jones Wilshire 5000 Index and 40% Lehman Aggregate Bond Index through May 31, 2005; 60% MSCI US Broad Market Index and 40% Bloomberg Barclays Capital Aggregate Bond Index through January 14, 2013; and 60% CRSP US Total Market Index and 40% Bloomberg Barclays U.S. Aggregate Float Adjusted Index thereafter. Wellington Composite Index: 65% S&P 500 Index and 35% Lehman Long Credit AA or Better Index through February 29, 2000; 65% S&P 500 Index and 35% Bloomberg Barclays Capital Credit A or Better Index thereafter. Spliced Total International Stock Market Index: Total International Composite Index through August 31, 2006; MSCI EAFE + Emerging Markets Index through December 15, 2010; MSCI ACWI ex US IMI Index through June 2, 2013; and FTSE Global All Cap ex US Index thereafter. *On Thursday, April 13, 2023, the underlying funds of the Moderate Growth investment changed to 42% Vanguard Total Stock Market Index Fund (VSMPX), 40% Vanguard Total Bond Market Index Fund (VBMPX), and 18% Vanguard Total International Stock Index Fund (VTPSX). Previously, the composition had been 45% Vanguard Balanced Index Fund (VBAIX), 45% Vanguard WellingtonTM Fund (VWENX), and 10% Vanguard Total International Stock Index Fund (VTPSX). The investment performance report for the first quarter of 2023 reports the underlying funds as of 03/31/2023. The web page lists the current underlying funds as of 04/13/2023.*
- Growth benchmark: 80% Wilshire 5000 Index and 20% Lehman Aggregate Bond Index through December 31, 2009; 55% Spliced Total Stock Market Index, 20% Spliced Bloomberg Barclays U.S. Aggregate Float Adjusted Index, and 25% Spliced Total International Stock Market Index thereafter. Spliced Bloomberg Barclays U.S. Aggregate Float Adjusted Index: Bloomberg Barclays U.S. Aggregate Bond Index through December 31, 2009; Bloomberg Barclays U.S. Aggregate Float Adjusted Index thereafter. Spliced Total Stock Market Index: Dow Jones Wilshire 5000 Index through April 22, 2005; MSCI US Broad Market Index through June 2, 2013; and CRSP US Total Market Index thereafter. Spliced Total International Stock Market Index: Total International Composite Index through August 31, 2006; MSCI EAFE + Emerging Markets Index through December 15, 2010; MSCI ACWI ex US IMI Index through June 2, 2013; and FTSE Global All Cap ex US Index thereafter.
- The underlying fund for the Money Market investment pool has been updated to Vanguard’s Cash Reserves Federal Money Market Fund, reducing the expense ratio to 0.10% as of October 27, 2022. To learn more, read our investment lineup update.
- Short-Term Treasury Inflation-Protected Securities (Short-Term TIPS) benchmark: Bloomberg U.S. 0-5 YearTreasury Inflation Protected Securities Index.
- Total Bond benchmark: Spliced Bloomberg Barclays U.S. Aggregate Float Adjusted Index reflects the performance of the Bloomberg Barclays U.S. Aggregate Bond Index through December 31, 2009; Bloomberg Barclays U.S. Aggregate Float Adjusted Index thereafter.
- Total International Bond benchmark: Bloomberg Barclays Global Aggregate ex-USD Float Adjusted RIC Capped Index Hedged: Includes government, government agency, corporate, and securitized non-U.S. investment grade fixed-income investments, all issued in currencies other than the U.S. dollar and with maturities of more than one year.
- Total Equity benchmark: 55% S&P 500 Index, 15% S&P Completion Index, and 30% Spliced Total International Stock Market Index. Spliced Total International Stock Market Index: Total International Composite Index through August 31, 2006; MSCI EAFE + Emerging Markets Index through December 15, 2010; MSCI ACWI ex US IMI Index through June 2, 2013; and FTSE Global All Cap ex US Index thereafter.
- Total U.S. Stock benchmark: Total U.S. Stock benchmark: Spliced Total Stock Market Index reflects the performance of the Dow Jones Wilshire 5000 Index through April 22, 2005; MSCI US Broad Market Index through June 2, 2013; and CRSP US Total Market Index thereafter.
- S&P 500 benchmark: Standard & Poor’s 500 Index.
- Large-Cap Value benchmark: CRSP US Large Cap Value Index.
- Large-Cap Growth benchmark: CRSP US Large Cap Growth Index.
- Total International Stock benchmark: Spliced Total International Stock Market Index reflects the performance of the Total International Composite Index through August 31, 2006; MSCI EAFE + Emerging Markets Index through December 15, 2010; MSCI ACWI ex US IMI Index through June 2, 2013; and FTSE Global All Cap ex US Index thereafter.
- Extended Market benchmark: S&P Completion Index.
- Real Estate benchmark: MSCI U.S. Investable Market Real Estate 25/50 Index.
- Ultra-Short-Term Bond benchmark: Bloomberg U.S. Treasury Bellwethers: 1 Year Index.
- Core Bond benchmark: Bloomberg U.S. Aggregate Float Adjusted Index.
- Windsor II benchmark: Russell 1000 Value Index.
- U.S. Growth benchmark: Russell 1000 Growth Index.
- International Core Stock benchmark: MSCI All Country World Index ex USA Net.
- High-Yield Corporate benchmark: High-Yield Corporate Composite Index.
- Dividend Growth benchmark: S&P U.S. Dividend Growers Index Total Return.
- Explorer benchmark: Russell 2500 Growth Index.
- Commodity Strategy benchmark: Bloomberg Commodity Index Total Return.
- Balanced Index benchmark: Balanced Composite Index: Weighted 60% Dow Jones U.S. Total Stock Market Index (formerly known as the Dow Jones Wilshire 5000 Index) and 40% Lehman Brothers U.S. Aggregate Bond Index through May 31, 2005; 60% MSCI US Broad Market Index and 40% Bloomberg Barclays U.S. Aggregate Bond Index through December 31, 2009; 60% MSCI US Broad Market Index and 40% Bloomberg Barclays U.S. Aggregate Float Adjusted Index through January 14, 2013; and 60% CRSP US Total Market Index and 40% Bloomberg Barclays U.S. Aggregate Float Adjusted Index thereafter.
- Wellington benchmark: Wellington Composite Index: 65% S&P 500 Index and 35% Lehman U.S. Long Credit AA or Better Bond Index through February 29, 2000; 65% S&P 500 Index and 35% Bloomberg Barclays U.S. Credit A or Better Bond Index thereafter.
- TIFF MAP: An actively managed, globally diversified portfolio of traditional and alternative investments, MAP features an annualized expense ratio that is greater than that of passive portfolios or active/passive mixed portfolios. Performance is shown net of all fees and expenses. For the year-ended 12/31/2021, the annualized expense ratio was 1.51%. This fee includes 0.18% of performance fees paid to external managers and 0.35% of expenses for securities sold short. The Multi-Asset Pool is generally available to accounts with ongoing balances over $100,000. Refer to our Policies & Guidelines for more information.
- European Stock benchmark: Spliced European Stock Index reflects performance of the MSCI Europe Index through March 26, 2013; FTSE Developed Europe Index through September 30, 2015; and FTSE Developed Europe All Cap Index thereafter.
- Pacific Stock benchmark: Spliced Pacific Stock Index reflects performance of the MSCI Pacific Index through March 26, 2013; FTSE Developed Asia Pacific Index through September 30, 2015; and FTSE Developed Asia Pacific All Cap Index thereafter.
- Emerging Markets benchmark: Spliced Emerging Markets Index reflects performance of the Select Emerging Markets Index through August 23, 2006; the MSCI Emerging Markets Index through January 9, 2013; the FTSE Emerging Transition Index through June 27, 2013; the FTSE Emerging Index through November 1, 2015; the FTSE Emerging Markets All Cap China A Transition Index through September 18, 2016; and the FTSE Emerging Markets All Cap China A Inclusion Index thereafter.
- Underlying funds for the Values-Driven Investment options are Vanguard exchange-traded funds. However, all Vanguard Charitable investment options are traded once daily and pricing is based on the NAV.
- ESG U.S. Stock benchmark: FTSE U.S. All Cap Choice Index
- ESG International Stock benchmark: FTSE Global All Cap ex U.S. Choice Index
- ESG Global Stock Pool Benchmark: Weighted 70% FTSE U.S. All Cap Choice Index and 30% FTSE Global All Cap ex U.S. Choice Index.
- Baillie Gifford Global Positive Impact Stock Fund benchmark: MSCI All Country World Index Net.
- The potential for risk in Vanguard funds can be categorized in levels from 1 to 5. Learn more in our FAQs.
- Any Portfolio Solutions option can be combined with other Solutions, Portfolio Builders, and Values-Driven Investment options.

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