Morningstar's third annual ETF-focused event, Oct. 3-5, will help both strategic and tactical investors better harness these vehicles in today's uncertain marketplace.
Note to readers: Stay tuned to Morningstar.com Oct. 4-5 for on-the-spot blog posts on ETF Invest conference panels as well as video interviews with panelists and presenters.
Mike Rawson: Hi there. I’m Mike Rawson, an exchange-traded fund analyst with Morningstar. I'm here today to talk about the upcoming ETF Invest Conference, and joining me today is [Morningstar director of passive fund research] Paul Justice. Paul, thanks for joining me.
Paul Justice: Thanks, Mike.
Rawson: Paul,the ETF Conference is coming up this October, October 3-5, at the Radisson Blu Hotel in Chicago. Tell me a little bit about the conference and who it is geared toward.
Justice: This is our third annual ETF Invest Conference. It's a wonderful event for people to really learn about the ETF structure, how to apply it in their portfolios, and to also get some of the tidbits about investing that you can find in some of the tools in Morningstar, but to also get some insight from a lot of the experts. So we focus on some of the overlying macroeconomic trends within the economy, some insights into new developing strategies, ways you can put ETFs to works so you can really harness some of the low-cost and tax-efficient ways of investing.
Rawson: Now the timing of the conference is going to be right before the Presidential election in November, so I'm sure that the election will be fresh in everyone’s mind. Is there anyone that's going to address politics and economics and what the landscape might look like around the time of the election?
Justice: Sure. Every time we have an election cycle, you walk into a lot of uncertainty. We're going to hear from some very qualified people. Russ Koesterich from iShares [will speak]. Liz Ann Sonders is going to talk about the economy and just really the shape of things to come, giving us the bimodal outcomes depending on which path the election takes. So people can expect a lot of insight there.
Rawson: Great. I know Russ Koesterich was the author of the book The Ten Trillion Dollar Gamble, and he laid out the headwinds that we might face if we go through that fiscal cliff that people are talking about. Do you anticipate that he is going to address these types of issues?
Justice: Certainly. He is a prolific writer, and a great speaker. He provides insights all the time in the economy, so it's really good to get him face-to-face with investors to talk about current events.
Rawson: Now Paul, I know one of the breakout panels that I'm really looking forward to is a panel that's going to discuss this tendency lately for investors to look at low-volatility stocks and at the same time look at high-dividend-paying stocks. We've seen over the last couple of years strong flows out of equity, people going into bonds. People are a little bit risk-averse and not wanting to go back into the equity markets. But at same time, kind of counter to that trend, there has been a trend toward dividend-paying stocks and a trend toward lower volatility. This panel is really going to try to dissect both strategies. Can you talk a little bit about that?
Justice: Sure. Everybody who I talk to wants something that just gives them a nice return with no risk. So what we've seen is a lot of interest in these two strategies, among other factors that are out there like momentum and value. So I think getting some insight as to what these funds can and cannot do for your portfolio is going to be wonderful. Certainly the flows have justified our panel here. There's a lot of interest in these strategies, and I think well beyond that. We will also talk a lot about commodities and as you had mentioned some fixed-income investing ideas. So I think that we are really going to hit all parts of the portfolio and give people some unique insights into some of these, I guess, more complex strategies.
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Rawson: This is going to be our third annual ETF Conference. I know last year was pretty big; this year we are anticipating it to be even bigger. But something new we're adding this year is a third track, a breakout session geared toward these ETF-managed portfolios. This is kind of a new phenomenon. What are these ETF-managed portfolios, and why have they become so popular lately?
Justice: This is a track that's really geared toward financial advisors to allow them to focus on their core competencies. A lot of advisors are very good at gathering assets but outsource a lot of the asset management to other folks. That's where these managed portfolio RIAs, the Registered Investment Advisors come in. They help you build portfolios, using mainly ETFs, that are going to really optimize the client experience, so you can focus on what you're good at and outsource what you’re not so good at.
Rawson: So this is a track that's mainly geared toward financial advisors. Could individual investors take anything away from these panels?
Justice: Certainly, a lot of these folks are professional, sophisticated investors. They've got a lot of ideas backed by sound academic thought to give you some perspective of what their strategies are, why they're employing them, and what the intended outcomes are.
Rawson: So this is more than just the ETF industry talking to itself. The audience is in large part going to be financial advisors and high-net-worth individual investors. Is that correct?
Justice: Yes, nothing irritates me more than going to an event that's really focused on a crowd that's not for you. If you’re a financial advisor or an individual investor who is really focused on managing your own money, this is an event for you.
Rawson: Great. Well, Paul, thanks for joining me.
Justice: Thank you.
Rawson: I'mMike Rawson with Morningstar. We look forward to seeing you at the Morningstar ETF Invest Conference.
