As globalization gives way to reshoring and resurgent resource nationalism, emerging markets may offer fresh alpha opportunities through their ability to supply the raw materials required to fuel the AI boom.
Investing is an exercise in decision making under uncertainty. No single signal—no matter how intuitive or well supported by history—captures the full complexity of markets.
Whether these diversified firms can maintain their positions indefinitely is an open question, but market history suggests the competition always catches up.
In their latest article, Why Hold Expensive Slow-Growing Stocks? An Alternative Framework for Value and Growth Indices, Chris Brightman, Campbell Harvey, Que Nguyen, and Omid Shakernia, argue that traditional style-box construction forces investors to hold stocks that are neither true “value” nor true “growth”—notably, expensive, slow-growing companies that have historically underperformed.
Standard value and growth style indexes categorize stocks based on a composite signal that combines valuation (cheap vs. expensive) and growth (fast vs. slow) metrics.
The RAFI™ Fundamental Index has a value tilt, but to characterize it as a value index would be an oversimplification that misses the important advantages that the fundamental index offers above standard “value” index approaches.
Smart beta strategies have endured a prolonged stretch of disappointing results, falling short of investor expectations. This article explores the underlying causes of that performance and outlines why the conditions ahead could be more favorable.
Deregulation is among President Donald Trump’s most enduring policy themes. In his 2016 campaign, he called for widespread deregulation and made it a central plank in both his economic and energy platforms.
These are only some of the exciting new applications on everyone’s lips at business gatherings these days, where the conversation often veers to artificial intelligence, which has become the latest “new new thing.”
After a decade in the wilderness, value investing roared back to life in 2022, led by long-forsaken sectors such as energy, industrials and even certain retailers. Many portfolios had either intentionally or unintentionally migrated heavily towards “growth at any price” exposures and were caught wrong-footed that year.
Trench warfare in the early 20th century has been described as long periods of boredom punctuated by moments of terror.
With negligible incremental risk, a RAFI Global Index hypothetically outperformed a Cap-Weighted Global Index by 40 bps per annum and a Cap-Weighted Global Value Index by 2.2% from 2007 to 2022—a 16-year period covering the long value rout and its aftermath.
