The eighth annual Morningstar ETF Conference was held on 6-8 September in Chicago. The three-day event brought together more than 800 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 chock a 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 three take-aways from the event.
The Changing Nature of Work
Joe Davis, Vanguard’s global chief economist, delivered this year’s keynote. Davis shared three paradoxes that define the current state of the global economy and markets. Specifically, he stated we are living through a period marked by low inflation, but full employment; low growth, but high valuations; and low volatility, but high uncertainty. While low growth, in particular, would typically be indicative of a stagnating economy, Davis argues that under the surface the economy is being propelled forward by major technological advances.
Davis believes the effects of ongoing technological innovation won’t be adequately captured by traditional statistics like gross domestic product growth, and their direction and pace certainly won’t be influenced by the factors most investors are fretting over, such as Fed policy. Rather, they will manifest in perceptible changes in productivity and prosperity. He shared an anecdote from his own family’s experience, saying his grandmother could measure advances in her family’s well-being in increments of the things they could afford (the number of times they could serve meat at dinner in a week) and the opportunities available to them (for example, the fact that they could afford post-secondary education for their children).
