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My Top 4 Take-Aways From the Morningstar ETF Conference (Part 1)

Not quite euphoric; Fact, fiction, value, and momentum investing

Ben Johnson 13.10.2016

We held our seventh annual Morningstar ETF Conference on 7–9 September in Chicago. The three-day event brought together over 700 advisors, strategists, due-diligence analysts, exchange-traded fund providers, and a host of other industry participants. As is the case with all Morningstar conferences, this is not a pay-to-play affair chocka-block with product pitches. Our analysts craft each year’s agenda. We set out to put together a solid lineup of industry luminaries to spur good conversation about important issues facing investors, as well as to give them practical ideas about how to put ETFs to work in practice. I think this year’s conference was our best yet. I’d like to share with you my top four take-aways from the event.

Not Quite Euphoric

Charles Schwab’s chief investment strategist Liz Ann Sonders presented this year’s opening keynote address. She discussed the current state of the U.S. economy and gave her thoughts on its future direction, as well as the implications for global markets. Sonders began by sharing one of my favorite quotes on the nature of market cycles, from Sir John Templeton: “Bull markets are born on pessimism, grown on skepticism, mature on optimism and die on euphoria.”

Where are we in the current cycle? Sonders believes the U.S. market is somewhere in the optimism stage, oscillating between fits of panic and spells of relief, but she insisted that it’s still far from euphoric. Her team had a “neutral” rating on U.S. equities as of early September, meaning that it was maintaining current allocations with an eye toward adding to them in the event of any fear-induced selling.

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About Author

Ben Johnson  Ben Johnson, CFA is the Director of Passive Fund Research with Morningstar.

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