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Ones to Watch in the 2010 Morningstar Conference

Christine Benz

Christine Benz: Hi. I'm Christine Benz for Berkshire Hathaway's Annual Meeting is often called "Woodstock for Capitalists," but you could also called Morningstar's Investment Conference, kicking off in Chicago this week, "Woodstock for Financial Advisors."

Here to discuss what to expect from this year's conference are two of its organizers, Russ Kinnel, Morningstar's Director of Fund Research, and Karen Dolan, Morningstar's Director of Fund Analysis. Thanks for joining me, guys.

Karen Dolan: Thanks, Christine.

Russel Kinnel: Good to be here.

Benz: So you've got a great assemblage of managers for this year's conference. I'd like to hear who you are most excited to hear from. Russ, let's start with you.

Kinnel: Well, at the top of my list is Jeffrey Gundlach who is doing the first keynote. As you know, he had remarkable performance last year and got fired from TCW in these incredible fights. I think, one, we want to hear what's his view on the market. You may remember he had a great prediction about subprime and the disaster that was coming a few years back, but I also think people just want to hear what's his organization like and really at core, is this someone we can trust with our money after all the nasty fighting that went on with TCW. So I think people are really going to be focused in on him.

I'll also be interested in hearing on at the very end of the conference Bill Miller of Legg Mason and Richie Freeman of ClearBridge are two managers we haven't heard from in a long time at the conference. So I think it will be really interesting to hear. These are both long-term buy and hold investors, but they're kind of in the blend-growth space. So it'll be really interesting to hear their views on what's attractive and really just to hear their philosophy.

Benz: Karen, how about you? Who you are looking forward to hearing from?

Dolan: It's hard to pick a favorite, but I am also looking forward to hearing from Gundlach and from the Monsters of Stock. That's the name of that panel with Bill Miller, Freeman, and Staley Cates from Longleaf.

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But one panel I'm excited about is a little bit more under the radar. It's three managers who have left big shops that they had established their careers in and have started off their own investment boutiques. It's Charles de Vaulx who left First Eagle several years ago and has recently launched IVA Funds, which have actually done great and they've collected a lot of assets and have a lot of interest out in the marketplace.

And then, the other two managers is Hassan Elmasry who was a part of the Morgan Stanley franchise portfolios for many, many years. He broke off last year, started his own firm, took his team with him. So it will be interesting to see what he is doing, what he is doing similarly, what he is doing differently, great investor, it will just be nice to get an update.

And the last one is David Corkins who built his career at Janus. Right before he left Janus, he was on the Janus Fund, which is a flagship for the firm. He running a lot of money, doing a very good job, and he has also broken off and started his own firm.

So I think it will be interesting to hear what are they doing differently, what are they doing the same, where are they finding opportunities in the market? And it's just going to be a nice way to get back in touch with these investors we've all known and followed for many, many years.

Benz: So, when you think about the themes that you'll hear discussed heavily at the conference, what are some of the key themes that you think fund managers and the advisors and attendants will be coming back to?

Kinnel: Well, let's say, obviously what does Greece mean for the wide world, what does that mean for the U.S.?

Benz: And you've got a lot of global panels scheduled.

Kinnel: Right, right. We have a number of foreign managers. I have a global stock panel I'll be moderating. So I think we want to hear about that, and I think also just with all the disruptions in the market, what does it mean, what is the meaning of the Flash Crash, and I think also just broad topics of where are the bargains out there?

Benz: Now one question Karen that is top of mind for a lot of advisors is the strategic versus tactical asset allocation question. Do you think that will come up? I expect it will at the conference.

Dolan: It will. I think that's something we're all wrestling with. Buy and hold, you know, there are lots of arguments out there that it's dead, and you want to be a lot more tactical with your money, but there's really not a lot of evidence that that works, and so we're going to have both sides represent it. We have a panel with Rob Arnott. He is going to be leading a discussion about tactical asset allocation. He's been doing it for many, many years, long before it became fashionable in 2008.

Benz: He's actually done a pretty good job.

Dolan: And he's done a nice job. So I think we'll be able to hear that side from him. Then we have another panel. It's focused on target-date funds, and target-date funds have become a retirement solution for a lot of people. So I'd like to hear what those managers are doing. Today, a lot of them have been very strategic in their asset allocations, really sticking with a glide path that does change over time, but it changes and gets more conservative. It's not really trying to make those – they're not trying to make those market tactical calls. So it will be interesting to hear from them, what they are doing and how they are approaching it.

Benz: So another theme that I think a lot of investors and advisors are thinking about is retirement income and the fixed income landscape and it looks like you've got some pretty good panels set up to address those questions.

Kinnel: That's right. We've got a panel with three bond managers, Christine McConnell, Fidelity's muni head; Curtis Arledge of BlackRock, and Michael Hasenstab of Franklin Templeton, and I think they cover really wide range of bonds, and I think really just about any bond subject right now is really a hot topic. You think about munis all of a sudden with the continued stress that are on cities and states, but also worldwide--not just the Greek issues, but really a lot of issues around "Is it okay to go into high yield? Are we threatened by a double-dip?" So I feel like it's really a hot subject across the world in fixed income.

Dolan: In your panel, Christine, income strategies for retirees is going to hit that point home. I think it's going to be a nice spring in the practitioner's view and the asset allocator's view and really try to think through some practical applications of how to go about this retirement income conundrum that a lot of people are facing.

Benz: Right. And you guys also have a good convertible session and it looks like maybe there are some opportunities in convertibles after kind of a fallow period for that market segment.

Dolan: Right. And our dividend panel as well. I think that that's another good income discussion that we will be having. So it's going to come up in a lot of different sessions.

Benz: Well, it sounds like a great line up. I look forward to hearing from both of you and from all of the great panelist that you've assembled. So look forward to seeing the conference. Thanks.

Dolan: Thank you.

Kinnel: Thank you.

Benz: Thanks for watching. I'm Christine Benz for