The Long View
The Long View
Oct 16, 2019
Ben Johnson: Index Funds Are Not 'Zombie Investors'
Play • 58 min

Our guest on this week’s episode of The Long View podcast is Ben Johnson. Ben is Morningstar's director of global passive research. In that role, Ben leads a team of analysts who conduct research on index mutual funds and exchange-traded funds and publish research on the global passive investing industry.

Before assuming his current role, Ben was director of ETF research for Europe and Asia and served as the editor of the Morningstar ETFInvestor newsletter. Prior to that, Ben served as a senior equity analyst at Morningstar covering the agriculture and chemicals industry. Before joining Morningstar in 2006, Ben worked as a financial advisor for Morgan Stanley. He holds a bachelor's degree in economics from the University of Wisconsin, as well as the Chartered Financial Analyst designation. In 2015, Fund Directions and Fund Action named Ben among the 2015 Rising Stars of Mutual Funds.

Background
Ben Johnson articles and videos on Morningstar.com

Growth of Indexing
Investors Still Pouring Money Into Passive Funds,” by Christine Benz and Kevin McDevitt, Morningstar.com, July 29, 2019.

Have Fee-Based Models Won the Battle ... or the War?,” by Ginger Szala, ThinkAdvisor, Feb. 21, 2019.

End of Era: Passive Equity Funds Surpass Active in Epic Shift,” by John Gittelsohn, Bloomberg.com, Sept. 11, 2019.

Retail Distribution Review: Effects on Fund Fees in the UK,” by Jackie Beard, Morningstar blog, Nov. 9, 2018.

Passive Investing Hasn’t Taken Over the World,” by Barry Ritholtz, Investment News, Oct. 1, 2019.

Risks in the Growth of Indexing
The Big Short’s Michael Burry Explains Why Index Funds Are Like CDOs,” by Reed Stevenson, Bloomberg.com, Sept. 4, 2019.

Market-Cap-Weighted Index Funds Not Broken,” by Ben Johnson and Jeremy Glaser, Morningstar.com, Oct. 3, 2018.

Bogle Sounds a Warning on Index Funds,” by John C. Bogle, The Wall Street Journal, Nov. 29, 2018.

Passive Fund Providers Take an Active Approach to Fund Stewardship,” by Hortense Bioy, Morningstar.com, Dec. 6, 2017.

Indexing Impact Fears Overblown,” by Ben Johnson and Jeremy Glaser, Morningstar.com, Sept. 8. 2016.

Retirement Plans
Use of Index Funds in 401(k)s Increasing,” by Rebecca Moore, PlanSponsor, June 21, 2019.

Here’s the Real Reason Why Your 401(k) Fees Are Falling,” by Darla Mercado, CNBC.com, May 9, 2018.

Using ETFs in a Retirement Plan,” by Susan Dziubinski, Morningstar.com, Sept. 9, 2016.

Commissions and Fees
Fidelity’s Free Funds and the Changing Brokerage Business,” by John Rekenthaler, Morningstar.com, Aug. 8, 2018.

Looking Past the Fidelity Zero Headlines,” Christine Benz and Ben Johnson, Morningstar.com, Aug. 9, 2018.

"Schwab to Drop Commissions on U.S. Stock, ETF and Options Trades, Slamming Online Broker Stocks," by Ciara Linnane, Marketwatch, Oct. 1, 2019.

"E-Trade Drops Commissions on Trades, Joining Schwab, TD Ameritrade in Brokerage Fee War," by Maggie Fitzgerald, CNBC.com, Oct. 2, 2019.

Are No-Commission Trades Good for Investors?” by Christine Benz and Ben Johnson, Morningstar.com, Oct. 2, 2019, Morningstar.com.

Indexing Market Segments
Everything You Need to Know About Strategic-Beta ETFs,” by Ben Johnson, Morningstar.com, April 8, 2016.

Are High-Yield ETFs Junk?” by Alex Bryan, Morningstar.com, April 26, 2017.

Indexing in Less-Efficient Markets,” by Alex Bryan, Morningstar.com, Oct. 5, 2016.

An Overview of the Passive Bond Funds Landscape,” by Christine Benz and Alex Bryan, Morningstar.com, March 22, 2018.

Better Bond ETFs?” by Alex Bryan, Morningstar.com, Aug. 3, 2016.

Are There Viable Alternatives to Traditional Bond ETFs?” by Christine Benz and Alex Bryan, Morningstar.com, June 29, 2016.

Introducing Two New Morningstar Bond Categories,” by Sarah Bush, Morningstar.com, May 2, 2019.

Morningstar Analyst Report for iShares 20+ Year Treasury Fund TLT
Morningstar Analyst Report for iShares iBoxx $ High Yield Corporate Bond ETF HYG
Morningstar Analyst Report for SPDR Bloomberg Barclays High Yield Bond ETF JNK

6 Questions about Low-Vol Investing,” by Susan Dziubinski, Morningstar.com, Sept. 8, 2017.

Morningstar Analyst Report for iShares Edge MSCI Min Vol USA ETF USMV

A Checklist for Assessing Dividend ETFs,” by Ben Johnson, Morningstar.com, June 29, 2016.

Not All Dividend ETFs Are Created Equal,” by Ben Johnson, Morningstar.com, Aug. 25, 2017.

Morningstar Analyst Report for Schwab U.S. Dividend Equity ETF SCHD
Morningstar Analyst Report for Vanguard Dividend Appreciation VIG

Bogleheads On Investing Podcast
Bogleheads On Investing Podcast
bogleheads
Episode 030: Sarah Newcomb, host Rick Ferri
Sarah Newcomb, Ph.D., is a behavioral economist for Morningstar. In this role, she works to integrate the findings of her research into Morningstar's financial management applications and tools. Sarah has expertise in consumer psychology, economic decision-making, personal money management, and cognitive and social psychology. Before joining Morningstar in 2015, Sarah earned her doctorate in behavioral economics from the University of Maine, where her work focused on the psychological barriers to sound personal money management. She is the author of LOADED: Money, Psychology, and How to Get Ahead without Leaving Your Values Behind (Wiley, 2016). This podcast is hosted by Rick Ferri, CFA, a long-time Boglehead and investment adviser. The Bogleheads are a group of like-minded individual investors who follow the general investment and business beliefs of John C. Bogle, founder and former CEO of the Vanguard Group. It is a conflict-free community where individual investors reach out and provide education, assistance, and relevant information to other investors of all experience levels at no cost. The organization supports a free website at Bogleheads.org, and the wiki site is Bogleheads® wiki. Since 2000, the Bogleheads' have held national conferences in major cities around the country. There are also many Local Chapters in the US and even a few Foreign Chapters that meet regularly. New Chapters are being added on a regular basis. All Bogleheads activities are coordinated by volunteers who contribute their time and talent. This podcast is supported by the John C. Bogle Center for Financial Literacy, a non-profit organization approved by the IRS as a 501(c)(3) public charity on February 6, 2012. Your tax-deductible donation to the Bogle Center is appreciated.
55 min
Financial Decoder
Financial Decoder
Charles Schwab
Are You Rationalizing an Investing Mistake?
If you save money and invest it consistently, your path toward meeting your goals may seem simple. But most investors quickly discover that there are hurdles in the way—including our own brains. There are many cognitive and emotional biases that can trap us, and investors sometimes rationalize falling prey to these biases in familiar ways. In this episode, Mark is joined by Brad Bartick, branch manager of the downtown Denver Schwab branch, and financial consultant Joanna Heckman to discuss four different biases that investors have faced recently and what they sound like in action. Subscribe to _Financial Decoder_ for free on Apple Podcasts or wherever you listen. _Financial Decoder_ is an original podcast from Charles Schwab. If you enjoy the show, please leave a ★★★★★ rating or review on Apple Podcasts. Important Disclosures: Investors should consider carefully information contained in the prospectus or, if available, the summary prospectus, including investment objectives, risks, charges, and expenses. Please read it carefully before investing. The information provided here is for general informational purposes only and should not be considered an individualized recommendation or personalized investment advice. The investment strategies mentioned here may not be suitable for everyone. Each investor needs to review an investment strategy for his or her own particular situation before making any investment decision. All expressions of opinion are subject to change without notice in reaction to shifting market conditions. Data contained herein from third-party providers is obtained from what are considered reliable sources. However, its accuracy, completeness or reliability cannot be guaranteed. Supporting documentation for any claims or statistical information is available upon request. Examples provided are for illustrative purposes only and not intended to be reflective of results you can expect to achieve. Investing involves risk including loss of principal. Indexes are unmanaged, do not incur management fees, costs and expenses and cannot be invested in directly. For more information on indexes please see www.schwab.com/indexdefinitions. Past performance is no guarantee of future results and the opinions presented cannot be viewed as an indicator of future performance. This information does not constitute and is not intended to be a substitute for specific individualized tax, legal, or investment planning advice. Where specific advice is necessary or appropriate, Schwab recommends consultation with a qualified tax advisor, CPA, financial planner, or investment manager. Apple Podcasts and the Apple logo are trademarks of Apple Inc., registered in the U.S. and other countries. Google Podcasts and the Google Podcasts logo are trademarks of Google LLC. Spotify and the Spotify logo are registered trademarks of Spotify AB.Important Disclosures: The information provided here is for general informational purposes only and should not be considered an individualized recommendation or personalized investment advice. The investment strategies mentioned here may not be suitable for everyone. Each investor needs to review an investment strategy for his or her own particular situation before making any investment decision. All expressions of opinion are subject to change without notice in reaction to shifting market conditions. Data contained herein from third-party providers is obtained from what are considered reliable sources. However, its accuracy, completeness or reliability cannot be guaranteed. Supporting documentation for any claims or statistical information is available upon request. Examples provided are for illustrative purposes only and not intended to be reflective of results you can expect to achieve. Investing involves risk including loss of principal. Indexes are unmanaged, do not incur management fees, costs and expenses and cannot be invested in directly. For more information on indexes please see www.schwab.com/indexdefinitions. Past performance is no guarantee of future results and the opinions presented cannot be viewed as an indicator of future performance. Diversification strategies do not ensure a profit and do not protect against losses in declining markets. The policy analysis provided by the Charles Schwab & Co., Inc., does not constitute and should not be interpreted as an endorsement of any political party. Apple Podcasts and the Apple logo are trademarks of Apple Inc., registered in the U.S. and other countries. Google Podcasts and the Google Podcasts logo are trademarks of Google LLC. Spotify and the Spotify logo are registered trademarks of Spotify AB. (0221-1EPK)
29 min
Sound Investing
Sound Investing
Paul Merriman
The Ultimate Buy and Hold Strategy: 2021 Update
Paul Merriman discusses the 2021 updated Ultimate Buy and Hold Strategy, designed to show why the 10 equity asset classes should be part of a diversified portfolio. This new study uses an expanded base of returns so that all 10 equity asset classes are reflected in the 1970 to 2020 period. While the expansion of returns makes the returns more dependable, the results are virtually the same as with the previously limited data base. Every year since 2012, The Merriman Financial Education Foundation updates this UB&H Strategy as among its most important work. The 2021 study makes reference to two tables that listeners will want to review. They are the Worldwide Equity Portfolio Tables 50% US/50% Int’l and the Worldwide Equity Portfolio Tables 70% US/30% Int’l. This podcast is part of the educational offerings from The Merriman Financial Education Foundation, a registered 501(c)3.  If you found value in this podcast, here are five ways to support the podcast and our foundation: 1)     Leave a podcast review on your player of choice. 2)    Sign up for our biweekly newsletter at PaulMerriman.com 3)    Use our M1 Finance affiliate link to set up a brokerage account and use our portfolio suggestions. If you fund your account with a minimum of $1,000, our foundation will receive a one-time fee at no cost to you, which helps support our financial education projects.. 4)    Buy our latest book, We’re Talking Millions! 12 Simple Ways To Supercharge Your Retirement available at Amazon and other online outlets. 5)  Consider making a tax-deductible donation to the Foundation to support our mission to provide financial education to investors.  Thank you!
46 min
WashingtonWise Investor
WashingtonWise Investor
Charles Schwab
Will the Markets Get What They Want From Washington?
Minus the daily tweets that drove the news cycle for four years, Washington has settled into a different rhythm. In this episode of _WashingtonWise Investor_, Mike Townsend is joined by Liz Ann Sonders, Schwab’s chief investment strategist, to consider what’s driving the markets and what it will take to meet expectations. They also discuss what investors have learned from recent hyper-speculative trading, the impact on the markets should corporate tax rates rise, and how the building and bursting of micro-bubbles can impact the entire market. Mike also considers how the next round of economic stimulus is shaping up and moving through Congress, how regulators and lawmakers are investigating the need for more regulations in the wake of recent market volatility, and how recent departures in the House bring new pressure on Speaker Pelosi’s ability to hold her party together. _WashingtonWise Investor_ is an original podcast from Charles Schwab. For more on the series, visit Schwab.com/WashingtonWise. If you enjoy the show, please leave a ★★★★★ rating or review on Apple Podcasts. Important Disclosures The policy analysis provided by the Charles Schwab & Co., Inc., does not constitute and should not be interpreted as an endorsement of any political party. The information provided here is for general informational purposes only and should not be considered an individualized recommendation or personalized investment advice. The investment strategies mentioned here may not be suitable for everyone. Each investor needs to review an investment strategy for his or her own particular situation before making any investment decision. All expressions of opinion are subject to change without notice in reaction to shifting market conditions. Data contained herein from third-party providers is obtained from what are considered reliable sources. However, its accuracy, completeness or reliability cannot be guaranteed. This content was created as of the specific date indicated and reflects the author’s views as of that date. Past performance is no guarantee of future results and the opinions presented cannot be viewed as an indicator of future performance. Investing involves risk including loss of principal. Indexes are unmanaged, do not incur management fees, costs and expenses and cannot be invested in directly. For more information on indexes please see www.schwab.com/indexdefinitions. All corporate names are for illustrative purposes only and are not a recommendation, offer to sell, or a solicitation of an offer to buy any security. Supporting documentation for any claims or statistical information is available upon request. Short selling is an advanced trading strategy involving potentially unlimited risks, and must be done in a margin account. Margin trading increases your level of market risk. (0221-1C4M)
33 min
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