2023 Morningstar Investment Conference Highlights

The annual Morningstar Investment Conference in Chicago delivers our signature research and analysis and features insights from thought leaders across the industry. Among this year’s prominent guest speakers: New York University’s Aswath Damodaran, Pimco chief investment strategist Dan Ivascyn, Charles Schwab chief investment strategist Liz Ann Sonders, and former U.S. Secretary of the Treasury Lawrence Summers.

As always, some of the best fund managers in the industry shared their expertise. Their ranks included Sonali Pier, manager of Pimco Diversified Income PDIIX, which has a Morningstar Analyst Rating of Gold; Steve Romick, who has led Gold-rated FPA Crescent FPACX for nearly 30 years; and Rick Rieder, winner of the 2023 Outstanding Portfolio Manager award for his work on strategies including BlackRock Strategic Income Opportunities BSIIX and BlackRock Total Return MAHQX.

The key takeaways? Morningstar manager research director Russ Kinnel and Morningstar chief markets editor Tom Lauricella share themes, tips, and trends from the MIC in this special edition of Investing Insights.

Below are highlights of the panel topics, links to suggested reads, and interviews with some of the in-house and outside experts who spoke at the conference.

Join the conversation on Twitter by following @MorningstarInc and use the hashtag #MICUS. Subscribe to Morningstar’s YouTube channel to find related content.

Tuesday, April 25

The conference kicked off with a slate of sessions digging into Morningstar’s ratings and research. In “Best Ideas From the Morningstar Wide Moat Focus Index,” Andrew Lane, director of equity research, index strategies, explained the interplay between Morningstar Economic Moat Ratings and Morningstar fair value estimates that lands companies on our Wide Moat Focus Index of top-rated companies. Stock-pickers, take note: The benchmark is a good starting point for long-term investment opportunities.

Chief ratings officer Jeffrey Ptak presented the methodology for the Morningstar Rating and the updated Morningstar Medalist Rating in “Understanding Morningstar’s Fund Ratings.” He also joined portfolio strategist Amy Arnott to explain “How to Use Morningstar’s New Role In Portfolio Framework,” which provides practical guidance on using funds in portfolios that can help investors keep it simple.

Session Overview: Investing in Climate Tech. Companies in the climate tech industry are ramping up their investments in projects that can combat climate change, and Morningstar is evaluating the opportunities ahead. Morningstar editorial director Leslie Norton moderated a session with roundtable of experts from Morningstar Research Services, Morningstar Sustainalytics, and PitchBook.

Session Overview: Investing in the BEV Supply Chain. Sales of electric vehicles have exceeded expectations, with battery electric vehicles, or BEVs, accounting for 10% of global auto sales in 2022 and Morningstar strategist Seth Goldstein and fellow analysts Brett Castelli and William Kerwin discussed how investors can benefit from the transition away from internal combustion vehicles. Here, Goldstein reveals some good values among EV supply chain stocks. He explored related issues in his recent coverage of Tesla TSLA.

MIC Keynote: New Imperatives to Meet the Moment for Today’s Evolving Investor. Morningstar CEO Kunal Kapoor delivered a keynote address on how investors’ behaviors and attitudes have changed—and how technology can help advisors meet evolving needs.

MIC Keynote: A Conversation on Valuation with Aswath Damodaran. While 2022 saw severe damage inflicted on investors’ portfolios, Damodaran, professor of finance at New York University, said that it may have served as a much-needed course correction for how investors and company managements view the world.

MIC Report: Best Ideas From the Morningstar Wide Moat Focus Index. Morningstar’s Lane singled out handmade and vintage e-commerce platform Etsy ETSY and customer relationship management software provider Salesforce CRM.

Wednesday, April 26

The day opened with a keynote session with Larry Summers, who has had a long and storied career as a policymaker and academic. As markets soared and optimism reigned in the spring of 2021, Summers was warning about impending inflation and exhorting the Fed to raise interest rates. Summers brought his multifaceted perspective to a conversation with Daniel Needham, president of Morningstar Wealth. (Is it time for the Fed to reverse course? Morningstar senior U.S. economist Preston Caldwell recently offered his take on when the Fed will start cutting interest rates.)

Later that morning, asset-allocation experts from BlackRock, GMO, and Vanguard joined Morningstar senior manager research analyst Megan Pacholok to discuss the viability of the classic 60/40 portfolio after 2022′s double downturn. As the name of the session puts it, “The 60/40 Portfolio Is Dead. Long Live the 60/40 Portfolio.” Our columnist John Rekenthaler recently examined “Why the 60/40 Portfolio Continues to Outlast Its Critics,” and earlier this year data journalist Lauren Solberg spoke with experts at BlackRock, Capital Group, Fidelity Investments, T. Rowe Price, and Vanguard to explain why we shouldn’t lose faith in the 60/40 portfolio.

Also due for a re-evaluation: thematic funds. Fund managers have tried to harness secular growth themes ranging from artificial intelligence to Generation Z. Some have delivered phenomenal performance, but others have been duds, and 2022′s challenging market conditions poured cold water on many of these strategies. (As Morningstar’s Don Phillips has counseled, a cautious approach is the best bet.) Still, demand remains robust. Morningstar researchers discussed their framework to help investors evaluate these options.

Session Overview: Don’t Fight the Fed. In this video, Morningstar Manager Research analyst Saraja Samant and Pimco managing director and economist Tiffany Wilding discuss interest rates, the banking sector, and the bond market. Samant and Wilding joined TCW’s Bryan T. Whalen and Capital Group’s Ritchie Tuazon at the MIC to explore the nuances of Fed-watching.

Another Wednesday morning session drew a lot of interest: “Morningstar’s View on Vanguard and iShares.” These are two of the biggest names in the rapidly growing exchange-traded fund market and key players in the ongoing active/passive debate.

Session Overview: Morningstar’s View on Vanguard. Morningstar’s Vanguard specialist Alec Lucas talks about the firm’s funds and ETFs, costs, and new initiatives investors should know about. Read more about the best Vanguard funds.

Session Overview: Morningstar’s View on BlackRock and iShares. Morningstar’s director of passive strategies Bryan Armour on what investors need to know about the world’s largest asset manager. Get Morningstar’s take on the best iShares ETFs and BlackRock funds.

MIC Keynote: Lawrence Summers, Former United States Secretary of the Treasury. Reaching 2% inflation will likely take a recession, Summers said. Still, he is bullish on the United States and the prospects for U.S. companies.

MIC Report: Is It (Ever) Time for International Equities? Three top fund managers said international stocks look exceptionally cheap relative to U.S. stocks right now.

Thursday, April 27

The final day of the conference tackled retirement issues. Keynote speaker Laura Carstensen, professor of psychology at Stanford University, spoke to an increasing average life expectancy and what it means for retirement in “Drawing a New Map of Life for Century-Long Lives.” Carstensen explained why we need to change the way we work in an interview with Morningstar magazine and a conversation on The Long View with Morningstar’s Ptak and Christine Benz, our director of personal finance.

Session Overview: How to Make the Most of Social Security. Morningstar’s Benz, Social Security guru Mary Beth Franklin, and retirement expert Mark Miller addressed rules and claiming strategies with implications for many of us, including married couples, divorced spouses, survivors, and families with dependent children. Before the conference, Benz and Franklin discussed claiming strategies for married couples and whether we should be worried about the health of Social Security. To the latter point, Morningstar’s Rekenthaler shed light on the myths, feasibility, and politics of Social Security reform in a popular series of columns earlier this year.

The closing keynote broached “The ‘A’ Word”: annuities. Wade Pfau, professor of retirement income at The American College, and Spencer Look, associate director, retirement studies at Morningstar Investment Management LLC, demystified some preconceived notions about these strategies, which are designed to deliver guaranteed lifetime income. Listen to Pfau on The Long View, and learn more about Morningstar’s latest research on safe withdrawal rates.

View the full conference agenda here.