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The Index Company of Research Affiliates
Partners with the largest asset owners, consultants, and asset managers globally
Providing investors information to realize the full benefits
of smart beta
Award-winning, academic-quality research informs RAFI Indices and solutions.
Effectiveness, transparency, and low transaction costs are built into all RAFI strategies.
Our research team regularly shares the major insights gained in the analysis underpinning our strategies. Their research frequently challenges the conventional wisdom of investing and is informed through collaboration with the broader investment and academic community.
As smart beta and factor investing has grown in popularity so has the number of smart beta and factor indices. Each claims to be supported by a strong backtest, but be cautious of data mining and the lack of a solid economic foundation to the index strategy. The strategy may not perform as well in the real world as in the backtest! RAFI Indices are built on the award-winning, academic-quality research of Research Affiliates that has been published in the top practitioner journals of the investment industry.
Investors can easily fall victim to groupthink and this is often reflected in research. We aim to avoid this by continually seeking feedback and partnering with both academia and the broader investment industry. Campbell Harvey, professor of finance at Duke University, is head of research at Research Affiliates. Cam's innovative approach and rigorous attention to detail builds on our firm's well-established reputation for robust and cutting-edge research.
Our goal is to encourage humility, to recognize
that we can easily deceive ourselves into thinking
we have found the “holy grail.” Hubris is our enemy.
Professor Juhani Linnainmaa, PhD
From our earliest research into the benefits of a fundamentally weighted index approach through ongoing research today, our goal is to put forth investing strategies and insights that can positively influence investors’ long-term outcomes.
In developing and building our index strategies, we emphasize systematic and transparent processes, low-cost implementation, and high investment capacity. Our intent is to improve governance and increase conviction and understanding of the investment philosophy underpinning our index strategies.
As factor investing has grown in popularity, so has the complexity of factor indices. At RAFI Indices, we believe that
Poor product design can result in high transaction costs that cannibalize returns driven by factor premiums. This is why we aim to
The market impact of poorly engineered funds can have a large toll on realized returns. This is why we aim to
The purported benefits of smart beta too often fall prey to transaction costs and clients' poor timing decisions. We emphasize three main areas of investor support:
A distinct service philosophy
The promise of smart beta can be dramatically eroded by poor investor timing. Our support effort is centered on clients maximizing the long-term investor impact of our strategies. That’s our commitment.
A comprehensive suite of materials to weather the journey
Quarterly factsheets and conference calls are no longer enough.
Delivered by an experienced team of practitioners
Since 2005, the Client Strategies and Product Management teams of our sister company Research Affiliates have provided in-person support and engaged in conversations to help make our smart beta research and strategies work more fully for investors. Our experienced team has previously worked at investment consultants, hedge funds, index providers, asset owners, and asset managers.
*As of June 30, 2022
"The client service model for smart beta strategies needs to be radically different
from other types of strategies to produce better investor outcomes."
"If we extrapolate the investor returns gap to smart beta strategies,
poor client timing will completely negate the potential for positive excess returns."
JOHN WEST, JASON HSU
"The Biggest Failure in Investment Management:
How Smart Beta Can Make It Better or Worse"