Morningstar - Q2 2021 - 80

Ten Questions

Mawer's Paul Moroz manages risk with
diversification and due diligence.
Ruth Saldanha, editorial manager for Morningstar
Canada, interviewed Moroz in January.
1. What are the top three things you look for when

5. How do you find opportunities in this environment?

you pick stocks?

Opportunities are found one company at
a time. A common theme: securities that require
greater work (understanding long-term
business prospects, coupled with reclassifying
accounting to represent the economic
reality) or greater patience (a long-term
time horizon).

Wealth-creating companies, able and honest
managers, and reasonable valuations.
2. What is the biggest risk for international investors
right now?

Central banks have kept interest rates low in
response to the impact of COVID-19 on the
economy. The result has been higher asset prices.
How this normalizes-in combination with
the growth of the global economy-will impact
all asset classes. Easy monetary policy
has resulted in dear valuations at the expense
of future investment returns. In some cases,
there is severe market froth that could lead to
poor capital allocation and impairments.

Paul Moroz is chief investment officer and
a director at Mawer Investment Management,
based in Calgary, Canada, and comanager
of the Mawer Global Equity Fund. Moroz
was named Morningstar Foreign Equity Fund
Manager of the Year at the Morningstar
Canadian Investment Awards in 2013 for his
record at Mawer Global Small Cap, which
he comanaged from 2007 to 2020. Before
joining Mawer in 2004, Moroz was employed
by Alberta Investment Management
and Merrill Lynch Canada. He has a Bachelor
of Commerce from the Haskayne School
of Business at the University of Calgary.
Photography by Katherine Calnan.

80

Morningstar Q2 2021

managing such risks requires the right
combination of diversification and due diligence.

6. What's the best investment advice you've received?

You can buy well or sell well. But the real money
is made when you hold well.
7. What advice do you like to give?

On investing, our firm motto: " Be boring. Make
money. " On life: Think about how you
will measure your life and live purposefully.

3. Is the worst over when it comes to COVID-19?

8. When did you first become interested in investing?

The development of vaccines, particularly the
mRNA technology, means there is a clear
pathway to get back to normal. What is unknown
is whether there will be permanent changes in
human behavior and how that will impact
supply and demand in certain segments of
the economy. Markets will also have to transition
to a normalization of government support,
both fiscal and monetary.

I invested in a mutual fund when I was
15 with the cash I earned working in a kitchen
washing dishes. I wanted to start an Italian
restaurant, too-think about a Subway
mass-customization model for pastas. Business
and investing have been intertwined for
me ever since.

4. Is there a market you'd single out as a value today?

Likely at a startup-breaking, re-creating,
or innovating some business/customer process.

9. Where would you be working now if not

in financial services?
Any to avoid?

Canada's stock market has a high proportion
of financial and energy companies that
fall into the value camp. Many securities in Japan
also have traditional value characteristics.
Each market is idiosyncratic and has trade-offs.
For example, there are risks associated with
SPACs [special-purpose acquisition companies]
in the U.S., corruption in Indonesia, and
property rights in China. As with all investing,

10. What do you enjoy doing when you

aren't investing?

Sports or physical activity that gets me
to a meditative state. Fat-tire biking during the
winter in the Rocky Mountains has fit the
bill during COVID-19.
Morningstar - Q2 2021

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