Factor investing “has been the epicenter of ETF product development,” said Ben Johnson, director of global ETF research for Morningstar, and is one of the main themes of Morningstar’s annual ETF conference, which kicked off September 7 in Chicago.
Last year, 109 strategic beta ETFs launched, hitting a “record clip,” Johnson said. Sixty-four strategic beta ETFs, which he says is synonymous with factor-based investing, have launched so far this year.
Charles Schwab Chief Investment Strategist Liz Ann Sonders frames the conference topics in her opening keynote to the more than 650 people attending the conference Wednesday through Friday. Sonders will discuss “where she sees things headed” in the U.S. and global economy—“the engine underlying all our investments,” said Johnson.
Other hot topics include portfolio construction and ETF managed portfolios, and the conference will also feature “newer” sessions on sustainability and impact investing, Johnson said.
Morningstar earlier this year released sustainability ratings for funds, allowing investors to evaluate funds based on environmental, social and governance (ESG) factors, he noted.
The ratings, first announced in August, relate to ESG metrics for approximately 20,000 funds globally, and allow investors to evaluate mutual funds and ETFs based on how well the companies held in the funds are managing their ESG risks and opportunities.
Of the approximately 20,000 funds with Morningstar Sustainability Ratings, only 10% received a “high” rating.