I’m at the 25th annual Morningstar Investment Conference in windy Chicago where the best minds in the fund industry have swapped mutual fund and exchange traded fund strategies in the ever changing financial environment.
One of the big topics at the conference was saving toward retirement. Ronald O’Hanley, an executive at Fidelity Investments, sees an ongoing problem in America’s retirement outlook. Specifically, he points out that once the 72 million baby boomers generation hits retirement age, the 82 million millenials are next, reports Abram Brown for Forbes.
Consequently, O’Hanley is advising investors to look at low-cost passively managed stock index funds as a way to help optimize investment returns.
“In a macro, top-down environment, where what Ben Bernanke says is more important than what Peter Lynch thinks, you’ll see flows much more driven by passive,” O’Hanley said. “I think if you see the market you’ll see a bit of a return to active managers, but passive is here to stay and not just as way to get exposure, but as a way at to put together larger and better and more durable portfolios.”
Additionally, income-oriented investments will never go out of style. [Multi-Asset ETFs Yielding Over 5%]
“If you want to find opportunities look for a fund, stock or bond yielding a little lower than its peers,” Russ Kinnel, director of mutual fund research at Morningstar, said in an InvestmentNews reports. We’re so focused on higher yielding income we’re creating opportunities outside of them.”