Research Affiliates launches RAUS ETF with fundamentals-first approach to cap-weighted indexing. The new fund tracks the Research Affiliates Cap-Weighted Index, selecting companies based on economic footprint metrics including adjusted sales, cash flow, dividends, buybacks, and book value. Since its 2021 live launch, RACWI has outperformed the S&P 500 by approximately 81 basis points annually while maintaining tracking error under 60 basis points. With over 95 percent overlap in S&P 500 holdings, the strategy aims to deliver traditional market exposure while addressing structural inefficiencies in conventional benchmarks. Rob Arnott, founder of Research Affiliates, also highlighted how government stimulus may lead to slower long-term growth and higher volatility, while value stocks could provide margin of safety during market uncertainty.
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