YouSaid · the spoken record

Marta Norton

lines on the record: 69
first: 2022-10-21
most recent: 2022-10-21
sittings or episodes: 1
sources: podcast

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“Yeah, so there's a few things. I mentioned at the beginning of our conversation that during the global financial crisis, I learned that a lot of very credible, experienced people could be very, very wrong. And the thing that I would tell myself is that it's okay to ask the dumb question. The dumb question is probably something that a lot of people don't fully understand. And you need to have the confidence and the willingness to put yourself out there and be like, I don't get this subprime thing. I don't get these tranches. Or, you know, I don't understand why we should be trading off of CPI prints every month. Ask those questions. I think those questions are way more profound than people think.”
2022-10-21 · Masters in Business · Marta Norton on Direct Indexing and Investments · IDENTIFIED FROM THE TRANSCRIPT · source
“You know, one thing that I was not good at in college, I'm a present-oriented person, and I wasn't good at visioning a career. And so I had just very general careers. So I could go into medicine or I could be a lawyer. It didn't really think about the wide array of careers that are out there. And so I don't, you don't want someone to become a little professional at age of 19 and have some sort of envision of their future in mind. But you do want people to know of the enormous amounts of variety that there is in professional life. And so I would suggest that people really pursue that, really get a sense for the variety, whether that's taking random internships or whether that's going to networking events in random things just so that you get a sampling. You kind of date the investment market or the broader career market and get a sense for what's actually a fit for you.”
2022-10-21 · Masters in Business · Marta Norton on Direct Indexing and Investments · IDENTIFIED FROM THE TRANSCRIPT · source
“Yes, well, that's the kind of thing. That's the kind of thing she talks about. She talks about just kind of the behavioral elements that come into play. So as a prioritization standpoint, planning your day ahead of time, knowing what those key things are that you need to do and not the other things, she talks about making focus, putting your activities into blocks. So this is my email block. This is my deep think block. So some really common sense. And it's just one practical piece of advice after another. And then the last book that I just finished recently was called Bowling Alone. It's by Robert Putnam. It was written in 2000 and it's about the rise and then decline of social capital. So social capital being kind of the trust that we have in our community, in our neighbors, in our peers. And it's tracing that arc. And it was fascinating because obviously of COVID and lockdowns and the way we were so separate from one another and now we're coming back together. And it just got me thinking about the value of social.”
2022-10-21 · Masters in Business · Marta Norton on Direct Indexing and Investments · IDENTIFIED FROM THE TRANSCRIPT · source
“Other books. Okay, so I'm reading right now I'm reading The Bon King. I'm reading a book called How to Have a Good Day, which is about how to prioritize and organize your day so you get that satisfaction out of it that you long for. It's by a woman named Carolyn Webb.”
2022-10-21 · Masters in Business · Marta Norton on Direct Indexing and Investments · IDENTIFIED FROM THE TRANSCRIPT · source
“Clarifying the fact that a lot of the things that we build narratives out of are just noise. And I think that's a really important and the kind of truth that we should hold on to, especially as active investors and we look for those stories.”
2022-10-21 · Masters in Business · Marta Norton on Direct Indexing and Investments · IDENTIFIED FROM THE TRANSCRIPT · source
“Outcomes Talk about books. Okay, so favorite books, and I'm thinking explicitly, I'm a big reader, but I'm thinking explicitly from an investment standpoint. I think one of the books that I really loved was Nissin Talib's Fooled by Randomness. I love that book partly because not, I read it, I don't know, maybe five, six, seven years ago. And at the time, I'd been writing a lot of commentary where I'd say what happened in the markets that month or that quarter. And then I would think, I'm reading everyone else's commentary. And they said, and this is because of X, Y, and Z. And I would think it is. I mean, those things both happen. The market did that and that happened. But did one cause that? And they seem to such a brilliant job of”
2022-10-21 · Masters in Business · Marta Norton on Direct Indexing and Investments · IDENTIFIED FROM THE TRANSCRIPT · source
“There was momentum. There's certainly momentum. And, you know, it's not a thing on its own, but we do want to make sure that we're getting the very best from the whole cross-section of populations.”
2022-10-21 · Masters in Business · Marta Norton on Direct Indexing and Investments · IDENTIFIED FROM THE TRANSCRIPT · source
“That's right. So I don't have that commanding kind of leader of a clan look to me. And I think that might not be an issue for other people, but it certainly can get in my head from time to time. And I think what was so, what has been powerful about Morningstar is there have been a lot of women at Morningstar who have had a lot of influence, who don't necessarily fit a profile. And I think actually, as I think back to my days in research, there were a number of women who were really substantive, thoughtful people who, you know, looked like me or had features that I had. And I think that was a real source of encouragement. Now, as you move into the investing world, there tend to be fewer women. And that's something that, of course, everyone's wrestling with. How do we kind of make people feel like they are welcome to climb any invisible barrier that they might see because their voice is valued?”
2022-10-21 · Masters in Business · Marta Norton on Direct Indexing and Investments · IDENTIFIED FROM THE TRANSCRIPT · source
“I think one of the things people look at, and maybe this is broadly in business and maybe it's specific to finance, I don't know, I'd imagine it's broader, but a very commanding presence. I think the visualization and the audio of a commanding presence is what captures attention. And as a woman, I have a softer voice, I'm a smaller person.”
2022-10-21 · Masters in Business · Marta Norton on Direct Indexing and Investments · IDENTIFIED FROM THE TRANSCRIPT · source
“Robust and helpful. I would get pages of edits, which of course doesn't sound like a good thing, but it was a really good thing because it helps me understand things so much better. And she had a number of standing slots on TV shows. And when she wouldn't be able to make it, she would ask if I would want to do it in her place. And it was just the kind of endorsement and encouragement that I needed. And I think that's kind of a special thing about Morningstar, this idea that nobody's too big to help someone else grow in their career.”
2022-10-21 · Masters in Business · Marta Norton on Direct Indexing and Investments · IDENTIFIED FROM THE TRANSCRIPT · source
“Okay, so I say this knowing that she will hate that I'm raising her name. And I don't even know if she knows that this was the case for me. But when I joined the research group, I was, of course, new to finance. I was new to investing. And I was, you know, I'm a very, very deliberate, diligent person. So I'm working nights and weekends trying to discover the Morningstar voice, which is where you explain complex things and very simple and accessible ways. And also just learning how to tell a good fun from a bad fund. And Christine Benz, who is a big name at Morningstar, was on that team, a senior team member. And the edits that she would give me were so...”
2022-10-21 · Masters in Business · Marta Norton on Direct Indexing and Investments · IDENTIFIED FROM THE TRANSCRIPT · source
“Do you have to pay attention? And that's a good thing. The thing with all this streaming is I'll have it on in the background. And 10 minutes later, I'll not know what offensive.”
2022-10-21 · Masters in Business · Marta Norton on Direct Indexing and Investments · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah. So, you know, this is the thing with all the content, Barry. I have become really hard to please. So I'll be watching a show. Imagine Ozarks or imagine recently House of Dragons. As soon as it starts to lag, I'm gone. I have no patience for shows and content the way I used to, but I am watching and I haven't yet turned on it is a show called Endeavor. It's a British detective show. It's not quite as grisly. I don't think anything's grisly with a British accent. So I enjoy myself. It keeps me on my toes. So that's what I'm watching.”
2022-10-21 · Masters in Business · Marta Norton on Direct Indexing and Investments · IDENTIFIED FROM THE TRANSCRIPT · source
“I mean, I love it. And I think about a market environment like this, and I know you're interested in behavioral finance. We are it as well. And one of the things that I think can really engender good behavior is if you have dual mandates. So your focus isn't just myopically total return. But in direct indexing world, it's, yeah, I want this exposure, but I'm also getting all these tax benefits when the market sells off. So you have this little pick-me-up when things are going in the wrong direction. Listen.”
2022-10-21 · Masters in Business · Marta Norton on Direct Indexing and Investments · IDENTIFIED FROM THE TRANSCRIPT · source
“That makes a giant difference. It makes a giant difference. I mean, think about the obsession we have expense ratios. It's 10 basis points cheaper. Sign me up. 300. And what's also really interesting about the spaces to the point that you raise, a lot of folks will have these bizarre portfolios where I have this company stock. I inherited this thing. I don't know what to do with it, but I know it's not a good portfolio. Direct indexing allows you to smartly, you know, from a tax perspective transition that into a more well-rounded portfolio. So I think it's really powerful. It's not for everyone. It's not for every dollar size, but it's much more available to the mass market than it is than it has been.”
2022-10-21 · Masters in Business · Marta Norton on Direct Indexing and Investments · IDENTIFIED FROM THE TRANSCRIPT · source
“Substantially, or I guess maybe to say to quantitatively, tangibly, improve outcomes for investors. When we run our own tax alpha study,”
2022-10-21 · Masters in Business · Marta Norton on Direct Indexing and Investments · IDENTIFIED FROM THE TRANSCRIPT · source
“In That's right. And so for the folks who are a little slow on the uptake like I am and have their head down in their own work, let me offer a definition of direct indexing because I certainly needed it. Direct indexing is something that's been around for a long time. It's been around in the kind of high net worth area of the world. And what it is is you have your index, you have your ETF. But instead of buying an index fund or an ETF, instead you buy a basket of securities optimized to track that particular market. And when you own the underlying securities, you can, as to your point, embed your preferences. And you can also do tax management and improve your outcomes after tax. And as you think about, we were talking about the development, the rise of passive investing. And I was talking about a piece of the action and these markers in time where we've seen middle class get a big win. I think direct indexing is another mile marker on that journey because it's another way to”
2022-10-21 · Masters in Business · Marta Norton on Direct Indexing and Investments · IDENTIFIED FROM THE TRANSCRIPT · source
“Right. But the reality is it's not going to matter, even if I was right, which I wouldn't be. What do I do about it in a portfolio? And so what we're really focusing on is that range of outcomes for our investors and thinking about if this, then that, or is this priced in, or is it close enough to being priced in? What's the margin of safety? And I think not getting wedded to a worldview, and I think that can be the danger with a laser focus on the Fed and on this macro data, it can be a real distraction. But that being said, of course, we're watching how inflation develops. Of course, we're watching how rates develop and how companies, how their fundamentals respond and getting a sense for how pervasive is this environment going to be.”
2022-10-21 · Masters in Business · Marta Norton on Direct Indexing and Investments · IDENTIFIED FROM THE TRANSCRIPT · source
“You know, I think the one takeaway that you can have from this type of environment is that it certainly creating a ton of opportunities, right? I mean, this type of volatility is where you can start to make money in markets if you are careful and if you're a thoughtful investor, of course I have opinions on the Fed. I think everybody has opinions on the Fed. Everybody has opinions on the macro environment. And it's so tempting to want to just blast them all out there. But the reality that's what”
2022-10-21 · Masters in Business · Marta Norton on Direct Indexing and Investments · IDENTIFIED FROM THE TRANSCRIPT · source
“I think both strategies have value. It's just a matter of whether you're doing fundamental work around the price that you're paying or whether you're not. And I don't think that belongs to one or the other.”
2022-10-21 · Masters in Business · Marta Norton on Direct Indexing and Investments · IDENTIFIED FROM THE TRANSCRIPT · source
“So if you're looking for the opposite of And I also think, and this is something we've talked about a lot, the value growth fight or narrative value versus growth, I think is a bit of a false narrative. I think you can be a growth investor or you can be a value investor and care about the price that you're paying for your asset. Hey, isn't that?”
2022-10-21 · Masters in Business · Marta Norton on Direct Indexing and Investments · IDENTIFIED FROM THE TRANSCRIPT · source
“And research. I'm going to make a note of that. That's right. And so since then, growth has been dominant. And I think it's caused a lot of value investors to do a lot of introspection. And I think one of the takeaways that value investors have had is that valuation itself is not a timing indicator. We've had our own LTECM moment, I guess, as value investors. But I think the very fact that we're talking about value investing being dead in the water is really reminiscent of the period when value investors were saying growth was dead in the water. I think these things run in cycles. And I think paying attention to the price that you're paying is a valuable strategy, whether you're buying a growth company or a value company.”
2022-10-21 · Masters in Business · Marta Norton on Direct Indexing and Investments · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah. So, you know, when I was in research, there were a lot of articles at that time that wrote how superior value investing was to growth investing and how it always wins out if you look at over history value always dominates. And that should have been a flag that maybe values time is done. And certainly it has been. Wait, chest pounding is not a good look from.”
2022-10-21 · Masters in Business · Marta Norton on Direct Indexing and Investments · IDENTIFIED FROM THE TRANSCRIPT · source
“A year ago, it looked dirt cheap, and so it's paid off handsomely. And we are slowly edging out of it because we're thinking about this range of outcomes, these different environments, and what can protect in these different environments.”
2022-10-21 · Masters in Business · Marta Norton on Direct Indexing and Investments · IDENTIFIED FROM THE TRANSCRIPT · source
“For example, and when we look at this, we're obviously looking at that 1970s, 1980s period. There were few places to hide in that environment, commodities, energy related being one of them. And tips weren't around back then, but you can kind of simulate the experience of stagflation. Those held up. So those are the types of assets. Energy has been a long time holding for us. It's no longer attractive from our valuation perspective.”
2022-10-21 · Masters in Business · Marta Norton on Direct Indexing and Investments · IDENTIFIED FROM THE TRANSCRIPT · source
“thinking about this is the big struggle and so we've been working on that analysis in fact we originally started analyzing our portfolios for inflation what we do we have our research platform which is basically defining the opportunity set for us based on kind of our viewpoints and then as portfolio managers we get together and we think how do we size this what do we do with this information in a portfolio and so back in April of 2021 we started to think about what would inflation if inflation isn't transitory what would that mean for our portfolios and we started running a lot of scenario tests and we found that with as value lean that we have the energy exposure that we had on a relative basis our portfolios should hold up you know to the the 60 40s of the world and now what we're thinking about is what's going to happen to financial assets if inflation persists what's going to happen in a stag inflationary environment how do you think about these things and how do you size them and you know in a stag inflationary environment”
2022-10-21 · Masters in Business · Marta Norton on Direct Indexing and Investments · IDENTIFIED FROM THE TRANSCRIPT · source
“That's right. Yeah, and they're really showing kind of their sensitivity to real rates. But because they've lost ground and because inflation expectations have come back down, it's not a bad time to be thinking about tips for a portfolio”
2022-10-21 · Masters in Business · Marta Norton on Direct Indexing and Investments · IDENTIFIED FROM THE TRANSCRIPT · source
“So as we look at the fixed income landscape, I think what you're seeing, you're getting paid at the shorter end of the curve much more attractively than you had. You're not taking on enormous amounts of risk in that area, either from a credit or a rate perspective. We are looking at high yield. We are looking at areas like emerging market debt. The yields are much more attractive. But we haven't seen a whole big pickup in defaults and emerging market debt has its own concerns in this type of environment. So we're interested. But I think if we're looking at where is the net dollar going today, I think it's going to some of those higher quality segments of the fixed income market and tips, of course. TIPs have been a disappointment, I think, if people...”
2022-10-21 · Masters in Business · Marta Norton on Direct Indexing and Investments · IDENTIFIED FROM THE TRANSCRIPT · source
“Okay, there's Tina. There is Tara. There are reasonable alternatives. And then there is Cindy. Credit is now delivering yield to the three sisters.”
2022-10-21 · Masters in Business · Marta Norton on Direct Indexing and Investments · IDENTIFIED FROM THE TRANSCRIPT · source
“That's right. I mean, as a fundamental investor, we're never going to call the bottom. I know a few people who can do that consistently, but what we can do is have the right impulse as markets are moving, as they're selling off in general, the right impulse should be to add. We know that as markets are rising, the impulse should be maybe to hold tight or maybe not be adding. And so we're trying to find that behavioral discipline.”
2022-10-21 · Masters in Business · Marta Norton on Direct Indexing and Investments · IDENTIFIED FROM THE TRANSCRIPT · source
“Something went wrong. So, what we're weighing is how much is priced in, what else could go wrong? And so we're sizing very carefully in these opportunities, but we can't deny that there's a valuation opportunity in them.”
2022-10-21 · Masters in Business · Marta Norton on Direct Indexing and Investments · IDENTIFIED FROM THE TRANSCRIPT · source
“China and all the concerns that are around it and the sell off that it's had. I'm talking about Germany and its close and epicenter nature to the European energy crisis and the impact that the war has had on it. I'm talking about UK. And the troubles that it has. These are markets that are under pressure, and I so wish that markets could be absolutely cheap and not be in trouble. But oftentimes it's the fact that that doesn't overreact. Right. Yes”
2022-10-21 · Masters in Business · Marta Norton on Direct Indexing and Investments · IDENTIFIED FROM THE TRANSCRIPT · source
“Right. So we are still somewhat cautious. We're adding back to US equities. It depends on the portfolio, of course, but we're adding back to U.S. equities, especially where we were severely underweight, that area. We are interested in fixed income, but I think a lot of times when people talk about valuations, they act almost as if someone is in cash and equities. But if you're in a multi-asset portfolio and your fixed income is also getting a lot cheaper, that makes the calculus a little bit trickier. So maybe you want to be adding to your fixed income as well. And that's something that we're weighing a bit too. Where is the better opportunity versus equities versus fixed income? And I wanted to follow up on the point that you made about international because those are meaningful positions for us. They've been relatively cheap for a long time, but now through our models they are looking absolutely cheap. And that means that they're cheap relative to the fair value that we've identified for them. And so I'm talking about really the nasty stuff here. I'm talking about.”
2022-10-21 · Masters in Business · Marta Norton on Direct Indexing and Investments · IDENTIFIED FROM THE TRANSCRIPT · source
“So there is a lot of nuance to today's market. If we have proprietary models that we update with our insight to give us a sense what valuations are around the world, here at home, and when we look at the broad US bond market, the broad U.S. stock market, they're as attractive as they've been since we've been running this program since about 2015, 2016 time frame. So that's good. But it's not great. It's not as though they're pricing in Armageddon or anything along those lines. It's more.”
2022-10-21 · Masters in Business · Marta Norton on Direct Indexing and Investments · IDENTIFIED FROM THE TRANSCRIPT · source
“My impulse all else held equal should be to add back to exposures in the portfolio, whether that's dollar cost averaging new money or whether that's looking at areas that have held up or been quite defensive, which it's hard to find those areas, but they are out there, and adding back to more of the risky areas. But the caveat there is that I think that at least from our vantage point, markets are closer to fairly value than extremely cheap. So it feels more like a dollar cost average market to us than anything else.”
2022-10-21 · Masters in Business · Marta Norton on Direct Indexing and Investments · IDENTIFIED FROM THE TRANSCRIPT · source
“So, you know, as I think about a long term investor, when I'm thinking about a long term investor, I'm thinking of anyone who doesn't have a need for their assets in the next few years. So maybe we're talking about five years and out. And you look at this investment climate that we've been in, and when we were looking at the markets at the end of 2021, both US equities and US fixed income struck us as extremely expensive. I mentioned that we'd put more assets and alternatives than we typically had. At this point, markets are a lot more attractively priced. I mean, there's a lot of nuance to that, but they are more attractively priced. So if I'm a long-term investor and I'm thinking about what opportunities is the market,”
2022-10-21 · Masters in Business · Marta Norton on Direct Indexing and Investments · IDENTIFIED FROM THE TRANSCRIPT · source
“When you're wrong and you weren't close to the benchmark, it's incredibly costly. I think Jeremy Grantham calls it career risk or, you know, that kind of thing. So I think it's always going to be part of human nature. I wonder, and I haven't done any research on this, but I wonder if it's been harder over the past few years to be a closet indexer successfully, you know, pretending to be active, but mimicking the benchmark because of how big the big six companies in the US have been. It's been very hard to own them without becoming a non-diversified mutual fund at index weight. So I wonder if it's been harder to play that game lately.”
2022-10-21 · Masters in Business · Marta Norton on Direct Indexing and Investments · IDENTIFIED FROM THE TRANSCRIPT · source
“Within Morningstar investment management, we are very much high conviction investors. Meaning concentrated, concentrated portfolios are willing to stick our necks out and look different than a benchmark. And we've learned some hard lessons that way, as you can imagine. We're not going to get every call right and that at times can be costly. And so we've put more thought on how you size into positions or not. But I think closet indexing was a big topic when I was in research and there was a lot of work around active share and the like. And I think it's still, it's always, I think, going to be embedded in the community because”
2022-10-21 · Masters in Business · Marta Norton on Direct Indexing and Investments · IDENTIFIED FROM THE TRANSCRIPT · source
“Right, big difference from just returns and relative to category peers star rating launched very early on around 1985, and it's gone through a lot of methodology updates over time. And it's a really elegant measure of performance and a great starting point, but I don't think there's an analyst on the research side of the house who would say, look, you have the star rating and you're all done. I mean, there's so many of them who are spending so much of their time analyzing the people and the process and how the performance relates to that and the price. There's a lot more that goes into picking a mutual fund or a strategy than just taking a look at its historical track record.”
2022-10-21 · Masters in Business · Marta Norton on Direct Indexing and Investments · IDENTIFIED FROM THE TRANSCRIPT · source
“So Morningstar has been Morningstar Inc. I'll clarify the research side of Morningstar has been very clear on that expense case. So there's Russ's piece and there's many other pieces throughout time that have said as we look at what we think predicts future outcomes those expenses are key. It's interesting on the star writing side. Now, just for background, at a very high level, the star rating is looking at risk adjusted returns. Big difference than just.”
2022-10-21 · Masters in Business · Marta Norton on Direct Indexing and Investments · IDENTIFIED FROM THE TRANSCRIPT · source
“So Morningstar Inc. research has shown time and time again that fees are one of the few very reliable predictors of future performance. And I think that's just a mathematical reality, right? That you just have more if you didn't take out a lot at the beginning. So I think there's a real benefit to the path of investing, the ETF trend. In terms of kind of what this means for active and passive, I think there's a lot to that. I don't know if it's a one-for-one question. But as an active investor, I can say I'm a big fan of passive investing.”
2022-10-21 · Masters in Business · Marta Norton on Direct Indexing and Investments · IDENTIFIED FROM THE TRANSCRIPT · source
“And he talks about how the middle class became part of the investing class and he outlines credit cards and he outlines mutual funds and money market funds and retirement accounts. And the book I read, its version was in the 1990s. I think if he had continued it or if the book were written today or if I were writing the book I would add past of investing in ETFs onto those milestones or mile markers where we're really seeing great improvement for the average investor. And that's largely because of the huge impact that passive investing has had on fees, just giving people a much better”
2022-10-21 · Masters in Business · Marta Norton on Direct Indexing and Investments · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, so I guess to kick things off, I listened to the conversation you had with Eric Betunis, The Vanguard Effect, and I hadn't read the book. I enjoyed that conversation. I resonated with a lot of the insights. And as I think about it from my perspective, I think back to a book I read when I started Morningstar called A Peace of the Action by Joe Nosira.”
2022-10-21 · Masters in Business · Marta Norton on Direct Indexing and Investments · IDENTIFIED FROM THE TRANSCRIPT · source
“And the technology has now advanced to the point where a lot of those capabilities can be available to a lot of different advisors so they can personalize and create customized experiences for clients. And that customized experience can be through client profiling where the profiling was far more iterative and behaviorally infused with behavioral finance insights. Or it could be the actual portfolio where you're taking two standard portfolios, matching them together, or you're doing direct indexing. So there's a whole range of products and developments that are maybe changing the way financial advisors can interact with their clients and improving it.”
2022-10-21 · Masters in Business · Marta Norton on Direct Indexing and Investments · IDENTIFIED FROM THE TRANSCRIPT · source
“Yes, and it's algorithmically chosen just for you. Or if you have the privilege of driving a Tesla, you don't have the indignity of your husband messing with your mirror and your seat. You can just create a driver profile and it recognizes you. So personalization is not just a marketing message where it's dear Marta, you know, whatever. It's actually products that are built and adjusted for you. It began outside of financial services. Now, when I start to think about financial advisory work, I can't think of a place where personalization isn't”
2022-10-21 · Masters in Business · Marta Norton on Direct Indexing and Investments · IDENTIFIED FROM THE TRANSCRIPT · source
“That's right. That's right. That's a huge Yeah. So personalization is portfolio managers, and I was a portfolio manager for a long time. You really have your head down. You're focused on your strategies. So I pop my head up as a CIO. I get a vision of the broader picture and I start hearing a lot about personalization. And I don't know what people are talking about, frankly. And I ended up presenting on this at the Morningstar Conference this spring. And so I spent a lot of time trying to understand it. And if you don't mind, let me give you my understanding how I came about to how I see it. If you were like me and you spent your high school wandering blockbuster looking for something that you wanted to see that was in stock, you found yourself in a much different situation in the pandemic where you're sprawled on your couch and you're just streaming content through Netflix that is”
2022-10-21 · Masters in Business · Marta Norton on Direct Indexing and Investments · IDENTIFIED FROM THE TRANSCRIPT · source
“It. And actually, that suite, that collection of strategies, which is in the Morningsar Alternatives Fund, is where a lot of our portfolio managers were turning to at the end of last year when fixed income is so poor on a prospective basis. Equity valuations are really high. And so alternatives haven't been positive, but they have lost a lot less than even short data bonds. So it's been a good ballast for us in this environment.”
2022-10-21 · Masters in Business · Marta Norton on Direct Indexing and Investments · IDENTIFIED FROM THE TRANSCRIPT · source
“Within alternatives, we actually have a pretty rich history there. We've been managing an absolute return portfolio for a long time. But our focus and alternatives, we spend a lot of time thinking about what do we want to do with this space? What's different that we could get with alternatives from stocks and from bonds? And what we landed on was a focus on identifying strategies that are not driven by the same factors that drive equity returns or bond markets and focusing on strategies that have had limited drawdown. So our focus has been selecting these third party strategies that we think are somewhat predictable so that we can use them, have a role in portfolio. And also an alternative to what we have within fixed income and equities. So we have a merger arbitrage strategy. We have a convertible arbitrage strategy. We have a strategy, I wouldn't necessarily classify it as global macro. It's kind of a fun to funds approach with different models embedded in.”
2022-10-21 · Masters in Business · Marta Norton on Direct Indexing and Investments · IDENTIFIED FROM THE TRANSCRIPT · source
“So, a big part of who we are is our global research platform, where we're covering equities any which way you can slice them globally in the same thing on the fixed income side. So what are capital markets IP really is looking at what are the fundamental drivers of these asset classes and how do we think about them from a valuation perspective? What do we think of them on a prospective basis? And so you can think of that maybe, I guess, as thematic. We're sometimes focused on very narrow areas like a country or a sector. We also have the ability within our mutual funds to create equity sleeves, so individual stocks that represent the opportunity. And we would do that when we think the ETF is too expensive, or we think the ETF isn't actually capturing what we think is the opportunity. So we have that embedded in our mutual funds as well.”
2022-10-21 · Masters in Business · Marta Norton on Direct Indexing and Investments · IDENTIFIED FROM THE TRANSCRIPT · source
“What we're actually focused on is these model portfolios that we're managing these multi asset financial solutions. And this is an area of expertise, something that we've been doing for more than 20 years. And what we're doing now is thinking about how do we want to power those model portfolios. And so that's where the mutual funds come in. In fact, for a long time, we used third-party mutual funds. That's an area of expertise for Morningstar selecting those mutual funds. And when we found that we just wanted to try to reduce the layers of cost when you're owning a bunch of mutual funds, you have all the ancillary expenses built into those expense ratios. So if we could take what we thought were best to breed thinkers and put them within our mutual funds, we could cut down on the layers of costs. And that's in fact what we did.”
2022-10-21 · Masters in Business · Marta Norton on Direct Indexing and Investments · IDENTIFIED FROM THE TRANSCRIPT · source