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Nearly two thousand fund managers are gathering in Chicago to talk strategy in a tough market — and an industry-wide rift.
The pros here at the Morningstar Investment Conference are mostly active managers who aim to beat the market. As a group, they have seen $172.3 billion leave their accounts, while $47 billion has gone into passive funds (which simply match a market index) over the past year, according to Morningstar data .
What's more, a recent report from S&P Indices research shows the majority of active equity and bond managers have lagged behind the benchmark indices they're paid to beat for five years running.
But Michael Hasenstab, senior vice president of Franklin Templeton's Fixed Income Group, is not your average active manager. He's arguably one of the best in the business, and kicked off the conference Wednesday as keynote with very careful optimism.
"Should we panic? You should if you think the euro is about to split apart, expect an Italian credit event, or that China will have a hard landing. If you think that will all happen, go buy some shotguns," says Hasenstab. Though his tone is tongue-in-cheek, he lists the reasons why he doubts that any of these scenarios will happen.
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