The Research Affiliates Cap-Weighted Index strategy offers investors a thoughtful cap-weighted index construction.
The Research Affiliates Cap-Weighted Index strategy selects companies using the Fundamental Index™ approach and weights them by market capitalization. The strategy takes a contrarian tilt by avoiding overpriced companies with small fundamentals and large market capitalization.
Evidence suggests that anchoring the selection of companies by fundamental measures of firm size and weighting them by market capitalization should consistently outperform a cap-weighted benchmark. This strategy aims to deliver excess returns in a manner that results in minimal tracking error while retaining benefits associated with the Fundamental Index approach, such as transparency and low cost.
Thoughtfully designed to deliver for investors
The Research Affiliates Cap-Weighted Index Series (RACWI)
- Selects stocks by fundamental size measures.
The index strategy anchors the selection of companies to fundamental measures of firm size, namely, adjusted sales, adjusted cash flow, dividends plus buybacks, and book value plus intangibles. - Displays minimal tracking error.
The strategy seeks to deliver consistent outperformance in a way that results in minimal tracking-error levels. - Includes thoughtful design and implementation.
The index strategy is transparent and low cost and offers a slight reduction in turnover compared to a cap-weighted index. Each of these characteristics is designed to benefit investors.
The Research Affiliates Cap-Weighted Index strategy offers investors a thoughtful cap-weighted index construction.
The Research Affiliates Cap-Weighted Index strategy selects companies using the Fundamental Index™ approach and weights them by market capitalization. The strategy takes a contrarian tilt by avoiding overpriced companies with small fundamentals and large market capitalization.
Evidence suggests that anchoring the selection of companies by fundamental measures of firm size and weighting them by market capitalization should consistently outperform a cap-weighted benchmark. This strategy aims to deliver excess returns in a manner that results in minimal tracking error while retaining benefits associated with the Fundamental Index approach, such as transparency and low cost.
Thoughtfully designed to deliver for investors
The Research Affiliates Cap-Weighted Index Series (RACWI)
- Selects stocks by fundamental size measures.
The index strategy anchors the selection of companies to fundamental measures of firm size, namely, adjusted sales, adjusted cash flow, dividends plus buybacks, and book value plus intangibles. - Displays minimal tracking error.
The strategy seeks to deliver consistent outperformance in a way that results in minimal tracking-error levels. - Includes thoughtful design and implementation.
The index strategy is transparent and low cost and offers a slight reduction in turnover compared to a cap-weighted index. Each of these characteristics is designed to benefit investors.
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