What if the core way we’ve built index funds for the last 50 years is fundamentally flawed?
A Fundamentally Different Approach to Investing
When a stock doubles in price, traditional market-cap indices double down on it. This makes your portfolio more exposed to a stock after it becomes expensive. But what if you choose stocks based on the actual size of the business? By focusing on the company’s sales, profits, and economic footprint.
RAFI Fundamental Indexing Joins TMX VettaFi
That’s the core philosophy behind RAFI—the Fundamental Index approach founded by investment legend Rob Arnott. In the last two decades, the index provider RAFI has grown to nearly $200 billion. And now, in a massive industry move, Research Affiliates has sold its indices business to TMX. This will help TMX VettaFi achieve its objective of scaling its indexing business to $1 trillion.
I recently sat down with Rob Arnott in the TMX office.
