Morningstar Magazine - December 2017/January 2018 - 6

Contributors

Magazine

Damien Conover

Michael Holt

Hortense Bioy

Alessandro Gottardo

Damien Conover, director of healthcare
equity research for Morningstar Research Services,
teamed up with Michael Holt, who leads
the global equity research team, to investigate
expanding profit margins among the largest
U.S. firms in "More Moats, More Profits" (Page 29).
Some see elevated profits as a sign of monopolist
collusion, but Conover and Holt conclude
that the growing durability and defensibility of the
largest firms' competitive positions are driving
margin expansion. "Our analysis is significant,"
says Conover, "because we introduce the
concept of the growing importance of economic
moats driving corporate profit margins above
historical ranges. That holds important implications
for long-term stock valuations."

Hortense Bioy, Morningstar's director of passive
funds research, Europe, oversees research
on European-domiciled exchange-traded funds and
traditional index funds. In this issue's Spotlight,
Bioy challenges the conventional wisdom
that index-fund managers are indifferent
shareholders when it comes to corporate oversight
(Page 38). Bioy says, "I hope our research will
contribute to a better-informed debate about
the role of passive managers in corporate
governance." It shows that these asset managers
are increasingly taking an active stance to improve
the environmental, social, and governance
practices of the companies they invest in, through
both voting and engagement.

Cover illustrator Alessandro Gottardo (alias Shout)
lives and works in Milan. To visualize the concept
of outsized profits reaped by leading U.S.
companies, he landed on hay bales. "The hay bale
has the same shape as a pie chart," he says,
"and the image of the American cornfield in a wide
landscape came from this." Gottardo has
collaborated with a wide range of international
publications, including Newsweek, Le Monde,
Die Zeit, and El País, as well as corporate
clients such as American Express. His work has
received a number of awards, including four Gold
and three Silver medals from the Society
of Illustrators in New York, and he has had
exhibitions of his work in Los Angeles, London,
and several cities in Italy.

Editor-in-Chief Jerry Kerns
Managing Editor Laura Lallos
Editorial Board David Blanchett, Andrew Carter, Elizabeth Collins, Lee
Davidson, Adam Fleck, Sylvester Flood, Jon Hale, Michael Holt, Thomas
Idzorek, Ben Johnson, Paul D. Kaplan, Haywood Kelly, Dan Kemp,
Grant Kennaway, Laura Lutton, Alex Morozov, Daniel Needham, Don
Phillips, Jeffrey Ptak, Hal Ratner, Tricia Rothschild, Anthony Serhan,
Christopher Traulsen
Contributors Jackie Beard, Hortense Bioy, Jeffrey Bunce, Damien Conover,
Niels Faassen, Elizabeth Foos, Alina Lamy, Tom Lauricella, Vishnu Lekraj,
Ilana Polyak, John Rekenthaler, Carl Richards, Dan Rohr, Sheryl Rowling,
Katie Rushkewicz Reichart, Brad Schwer, Daniel Sotiroff, Aron Szapiro,
Lorraine Tan, Ralph Wanger, James X. Xiong
Art Director Alex Skoirchet
Designer Zach Sherwood
Illustrator Alessandro Gottardo
Photographers Christopher Lane, Mark Lobo, Matthew Lomannoo,
James Tweedie
Proofreader Mike Eiler
Publisher Leslie Marshall
Design Directors Jason Ackley, Renee Benz
Director of Advertising Sales Mary Uribe
Regional Sales Directors Dan Atkinson, Tony Lignelli, Stuart Roge
Morningstar, Inc.
CEO Kunal Kapoor
Managing Director, Design David Williams
Chief Marketing Officer Rob Pinkerton
Head of Brand Kristin Mateja
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