Since our first ETF Invest conference in 2010, the exchange-traded fund industry has gone from less than $1 trillion in assets to $1.5 trillion, and a slew of new products has expanded the space from plain-vanilla index funds into more exotic areas. But how can investors navigate this increasingly complex landscape to build better portfolios and position themselves in today's uncertain market?
This year's conference, held Oct. 2-4 in Chicago, shed some light on ETF investors' best practices today, including panel discussions about new strategies for finding income, investing in emerging-markets funds, practical implications from the current macroeconomic landscape, the outlook for gold, and the basics behind factor investing.
Keynote speakers included the University of Chicago's Austan Goolsbee, Vanguard's Joe Davis, Research Affiliates' Rob Arnott, and PIMCO's Douglas Hodge.
For those who couldn't attend this year's event, Morningstar.com offered on-the-spot coverage and commentary, including analyst blogs on conference sessions and video interviews with the keynote presenters:
5 Takeaways From the ETF Invest Conference
Panelists assess the government shutdown, the Fed's next move, prospects for emerging markets, the odds for inflation, and the future for U.S. growth.
Key Themes for the 2013 Morningstar ETF Invest Conference
Emerging-markets exposure, actively managed portfolios, and the search for income, particularly with bank-loan funds, all will be hot topics at this year's conference, says Morningstar's Ben Johnson.
Morningstar Announces 2013 Awards for Best U.S. ETFs and ETF Providers
The Morningstar Awards recognize ETFs offering superior investor experiences.
PIMCO's Hodge: Debt Ceiling Doesn't Have to Mean Default
Even if the U.S. government hits the debt ceiling later this month, it doesn't mean automatic default, said PIMCO chief operating officer Douglas Hodge during Q&A for his opening keynote address.
Work Cut Out for the American Saver
PIMCO chief operating office Douglas Hodge kicked off the 2013 Morningstar ETF Invest Conference with a sobering look at the challenges facing American savers today on four key fronts: demographics, personal savings, inflation, and diversification.
Richardson: Likely to See More Volatility
Fiscal uncertainty, a new Fed chair, and the upcoming taper are likely to introduce more volatility in equity and fixed-income markets, says BlackRock's Heidi Richardson.
Vanguard's Davis: 'Cautious Optimism' That Innovation Will Drive Long-Term Growth
Ongoing technological innovations are positioning the U.S. for healthy economic growth in the coming decade, says Vanguard's chief economist.
Vanguard's Davis: Equity Valuations Not Alarming Yet
Stock prices have begun to outpace earnings growth, but investors should still see high-single-digit returns from stocks during the next decade, says Vanguard chief economist Joe Davis.
Keynote: U.S. Economy--Standing Still or Standing Up?
The next 12 to 18 months will be slow and painful, but America's fundamentals support longer-term optimism, says University of Chicago economist Austan Goolsbee.
Goolsbee: We Need More Investment
The basic engine of U.S. economic prosperity has been the economy's tendency to innovate, which has not changed, and investors need to continue working past fears of the financial crisis, says economics professor Austan Goolsbee.
Good News and Bad News From Goolsbee
University of Chicago economics professor Austan Goolsbee served up a little something for both the pessimists and the optimists during his keynote presentation.
U.S. Leading Macro Game, but Europe Closing In
The U.S. is seeing a resurgence in some sectors, but we could be in the beginning days of a European financial renaissance.
Arnott: Challenges of the 'New Abnormal'
Investors who don't realign their expectations and savings plan for changing U.S. demographics and slower growth are in for a jarring experience, says Research Affiliates' Rob Arnott.
Arnott: Why Cap-Weighted Indexing Is Flawed
A capitalization-weighted index explicitly links the weight of a holding to its price, so the more expensive a stock gets, the bigger its weight in your portfolio, says Research Affiliates' Rob Arnott.
Arnott on the Key to Smart Beta
Breaking the link between price and portfolio weighting is why smart beta strategies outperform cap-weighted methods, says Research Affiliates' Rob Arnott.
Arnott: Smart Beta Works
The Research Affiliates CEO demonstrated how smart beta strategies have beaten market-cap-weighted indexes during long time spans, and investors were rewarded for the extra risk.
Intelligence of 'Smart' Strategies Open to Question
Due diligence is required when examining the potential value of smart beta strategies, but there is room for innovation, particularly with fixed-income indexes, says Morningstar's Ben Johnson.
ETF Trade Winds Changing in Emerging Markets
Although passive market-cap-weighted ETF strategies remain popular in developing markets, they do have their drawbacks, but actively managed low-volatility and value strategies are gaining momentum, says Morningstar's Patty Oey.
More Than One Path to Emerging Markets
Low-volatility strategies, dividends, and style weightings are just some of the methods for emerging-market exposure, but the best approach is up for debate.
Volpert: Less Risk in Intermediate-Term Bonds Than Perceived
Vanguard's Ken Volpert cautions investors about a rise in short-term rates, and also offers his thoughts on the U.S. debt ceiling as well as Vanguard's TIPS, international-bond, and total bond market funds.
Panelists: Many Investors Reaching for Yield, Adding Risk
Investors looking for income-oriented investment vehicles aside from traditional bonds and dividend-paying stocks may be taking on more risk than they can afford.
Credit Check: Bonds Looking Healthier Than a Year Ago
Investors are hanging on to every word from the Fed in anticipation that the central bank may take away the punch bowl and interest rates will rise.
Factor Investing: The Devil Is in the Details
'Factor investing' is one of the buzzwords in the industry right now, but judging from a panel on the topic at the Morningstar ETF Invest conference, experts vary widely on implementation.
'Smart Beta' Indexes? Index Panelists Prefer 'Factor' Indexes
Although the concept is all the rage these days, the term 'smart beta' indexes is a decided turn-off for three noted index experts.
Gold: Demand and Rates at the Forefront
Panelists touch on the surprising sources of demand for gold, the shiny metal's role in a portfolio, and the connection between gold and interest rates.
Balance Requires Flexibility
Tactical plays should carry a heavier weighting in the coming years as investors are up against more challenges than in the past.
Quant Leaping: How ETFs Are Expanding Horizons for Quantitative Investment Managers
The expansion of the ETF universe has given quant managers historically unparalleled access to new markets and asset classes at a low cost.
What's Cooking in the ETF Industry?
The final session of the Morningstar ETF Invest Conference was a roundtable discussion about industry trends, including the very slow development of active ETFs, the explosion of smart beta strategies, proliferation of ETF managed portfolios, and more.