Smart beta investing has changed the way people think by shaking up the customary categories of active and passive management.
And, while the underlying financial theory is sound, smart beta is not just another ivory tower breakthrough. The RAFI™ Fundamental Index™—an archetype of the smart beta approach—has a 10-year track record of actual investment performance across up-and-down equity markets.
Despite this decade long legacy many investors still find the concept of fundamentally weighted indices unfamiliar or unclear.
This five-minute video, produced by Research Affiliates, describes how the core RAFI Fundamental Index strategy differs from traditional index fund management and what the difference means for long-term investors.
The fundamental-weighting approach to long-term equity investing isn’t suitable for everyone. It requires patience, conviction, and a certain willingness to stand against the crowd.There’s a lot to learn and think about before you make a decision. “The Fundamentals of the Fundamental Index” may help you get started.
This video first appeared on www.researchaffiliates.com