Morningstar - Q2 2024 - 72

Ten Questions
Wellington's Jean Hynes on generating
alpha in the age of passive investing.
Laura Lallos, managing editor of Morningstar
magazine, interviewed Hynes in February.
1. You've spent your career at Wellington. What made
you stay?
The culture: People aren't pegged into a square.
I started as an administrative assistant.
Opportunities await those who stretch for them.
2. Why did you keep managing Vanguard Health Care
after becoming CEO?
My being an investor attracts talent and helps us
evolve our investment platform. And I learn so
much from the CEOs that I interact with. There are
similarities in how you lead, whether at a biotech
company or an asset manager.
3. What drew you to asset management in the first place?
The industry wasn't as prominent in 1991, and
I came from an immigrant family that never talked
about stocks. I had an internship with a
stockbroker in college, and that's how I found
my way into the industry.
Jean Hynes is the chief executive officer
and a managing partner of Wellington
Management. She heads the healthcare team
and serves as the lead portfolio manager
of Vanguard Health Care VGHAX, which
has a Morningstar Medalist Rating of Silver.
Hynes joined Wellington in 1991. She
has a Bachelor of Arts degree in economics
from Wellesley College.
Photography by Matthew Lomanno.
5. What are the biggest industry changes since
you started?
In the 1990s, up to the global financial crisis,
there was a big shift from CDs to equities.
Then you saw enormous growth in fixed income.
In the past decade, it's been the big shift
to passive. Over the last five years or so, it's
a shift to alternatives.
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Morningstar Q2 2024
4. How can the industry attract more young women?
I have four daughters; one is in this field, and
another is interested in it. There are good
programs out there, such as Invest in Girls, which
we support. We don't talk enough about the
mission of the asset-management industry:
How do you help people retire? How do you help
governments around the world support their
countries? If we did a better job of conveying that,
more people would be attracted to it.
6. What does this mean for active management?
Here's an analogy with the pharmaceutical
industry: Around 2000, about 80% of the volume
was in branded drugs. Over the next 15 years,
the market shifted to generics. There may
not be the same volume of branded drugs now,
but they represent all the value of the
industry. Passive is like the generic drugs of
the asset-management industry.
7. How can Wellington continue to distinguish itself?
It's much more complex to be an investor than
it was 20 years ago. A firm of our size can invest in
technology, risk systems, and data. We have
a collaborative ecosystem of about 600 investors
across equity, fixed income, long/short equity,
macro, and now private equity and private credit.
That allows us to generate alpha.
8. What is the most exciting trend in healthcare today?
The revolution we'll go through in biology.
Everyone knows about mRNA: It could treat not
only covid but hundreds of viruses. Antibody-drug
conjugates could significantly reduce the use
of chemotherapy. There are major trends that are
going to change the standard of care.
9. What do you do when you aren't managing money
and your company?
In winter, I ski every weekend. I'm up in Vermont
right now. Five of my six siblings are here,
my nieces and nephews, and my mom. It's a good
way to spend quality time with my family.
I started as a terrible skier, and this season I can
actually do some black diamonds.
10. What are you reading?
I just finished Trust by Hernan Diaz, which won
the Pulitzer Prize in 2023. It was not what I thought
it was going to be. I love books like that.
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Morningstar - Q2 2024

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